Publish Date: 03/28/2017
Fact checked by: Mike Goodpaster
Yesterday it was reported that the recent vote to move the Raiders from their home in Oakland to a new stadium in Las Vegas passed with an overwhelming 31-1 vote. Raider Nation is up in arms about the vote and those of us who have been fans for a good chunk of their almost six decades in existence wonder how this could happen. More importantly, Mark Davis, what the hell are you thinking? The financial aspect of this move is entirely unsound for all parties involved, save Vegas and possibly the players because Nevada doesn’t have a state income tax. Other than that, it’s a whole bunch of losing.
Following a historical pattern plaguing NFL teams throughout the history of the league makes it clear how nobody wins in this situation. The organization and even the NFL will lose support from Oakland-based fans, the team loses the patronage of the season ticket holders, which is all but guaranteed revenue year after year, and Mark Davis is going to lose his shirt. The amount of debt he’s about to take on is overwhelming, even for the owner of a multi-million dollar franchise. Unless he’s looking at a portfolio that none of us can craft on our best day, all signs point to a loss. And without the die-hard fans spending their time and money to support their hometown boys, there’s no telling what kind of attendance and revenue the team will see after the relocation. What’s that saying, Insanity is doing the same thing over and over again and expecting a different outcome?
In the history of the NFL, there have been several relocations of a significant portion of the teams in the NFL. The Las Vegas move bookends the nine franchise shifts since the Raiders first moved in 1982. 1995 was an ugly year for the NFL, with several controversial relocations. Cleveland owner Art Modell sold the Browns to Baltimore, which was reinvented as the Ravens. The NFL eventually allowed the Browns franchise to return to Cleveland after three seasons, leaving the Ravens in Baltimore as an expansion team. Los Angeles lost the Rams to St. Louis the same year. Not even the greatest show on turf can save a team from certain death. And death is what they got in St. Louis. The team is still in debt for $100 million for the stadium. This year, the San Diego Chargers will move to Los Angeles, which carries a price tag of $1.2 billion for a new stadium, $600 Million for relocation costs, and another $12 million in early termination fees for their existing lease. Irrespective of the financial burden on their existing markets and the emotional toll on the fans, these clubs made their moves and found themselves in huge financial holes. This is the Raiders future.
Las Vegas will be the sixth swap in the Raiders’ illustrious history. Most people are probably unaware of all of the previous places the Raiders have called home, including Kezar Stadium and Candlestick Park, both in San Francisco, Frank Youell Field, Los Angeles Memorial Coliseum, and Oakland-Alameda County Coliseum twice. The most notable relocations were to Los Angeles in 1982 and back to Oakland in 1995. That second move from Los Angeles back to Oakland quashed a plan already in progress to build a new $200 million stadium in Los Angeles. Al Davis had to take an $81 million loan from the NFL, including $31.9 million just for relocation expenses, plus he signed a lease with Oakland Coliseum for a full 16 years. With the loan, $500,000 annual rent, city bonds and surcharges, and the cost of a new stadium built by the City of Oakland/Alameda County for over $220 million, the final price tag was over $500 million.
Fast forward to 2017 and that relocation expense has increased 10-fold, estimated to be between $325 and $375 million. The NFL’s stadium finance committee has worked out a $750 million pledge in Las Vegas public funds to the project. With the financial backing of Bank of America, the money is almost solidified, or rather the DEBT is. The stadium is estimated to cost around $2 billion, and the Raiders will still owe for their defaulted rent to Oakland Coliseum for the remaining years of their lease unless they play through the 2020 season or Oakland decides to forgive that amount. Not likely on either facet. Barring Davis negotiating the lowest APR in lending history or generating annual revenue in the billions, the team will be in the red for decades.
I’m not an accountant so the best estimate I can come up with, give-or-take and based on amortization tables for an average 30-year loan at a modest 4% APR, calculates out to a possible $40,000,000 in interest alone. Simply put, the Raiders building the most expensive stadium in NFL history will force them to pull out all the stops just to make a profit. (Apologies to any accountants out there who may be cringing at the rudimentary math.) They’re not exactly starting in the black as it is, as Al Davis spent the better part of his tenure as the Raiders’ owner embroiled in legal battles, costing the team well over a billion dollars in legal fees, fines and settlements until his death in 2011.
There have been several proposals to the NFL to keep the Raiders home. Oakland Mayor Libby Schaaf sent a Hail Mary to the league on Friday afternoon for reconsideration of a proposal to build a new stadium. It’s unclear why she waited until the very last minute to send something instead of making this a part of her regular schedule. If you care that much about your team, Libby, make time for it. Send a request once a month, once a week or every day. After all, the squeaky wheel gets the grease. But she waited until Friday afternoon to ask for a stay. You read that correctly: Friday afternoon. Roger Goodell took time out of his busy Saturday to send her a kiss-off letter, practically nailing the coffin shut. Not a huge surprise given the history. The proposals that were presented thus far have not been unreasonable and certainly a lot cheaper than the move to Vegas, but Goodell is clearly motivated to expand to a new market and the league, in all its wisdom, shot down every effort to keep the Raiders in the Bay. Maybe Roger Goodell thinks that spreading teams all over the country will widen the fan base. That may end up biting him in an uncomfortable place.
Many of us don’t live in the Oakland area and have never had the joy of attending a game, but feel like residents by proxy. My grandmother was born and raised in Santa Ana, CA, and when she left home and moved to Alaska, the Last Frontier, the Oakland Raiders were one of the few things that she could hold onto from home. She is likely rolling in her grave right now at the choices the junior Davis has made, including forcing the team to abandon their longtime residence and a fanbase that’s as loyal as any other in the league, and arguably moreso. Most fans in Oakland share that strong urge to roll over in a grave.
The move hits hard and trying to be positive and supportive is difficult at best. It’s like a punch in the gut. The Las Vegas stadium will undoubtedly be spectacular, but it will lack the greatness that is the Oakland Coliseum. If you’ve never been to a place that has decades of history, imagine feeling a physical presence as you walk through the halls, down the tunnel, through the stands. Players and fans alike describe the same feeling of something familiar and comforting. Home. There’s an electricity that radiates from the Black Hole. I’m told there’s just nothing like sitting in that coliseum, feeling the love of the fans and the explosion when the team scores, even during a 3-13 season when they’re down by 25 points with 1:00 left. I have been verbally jousting on this issue for the last several months and heard both sides of it. Oakland residents are angry, and they feel like they’ve been betrayed by the club’s relatively new owner, and what does he know? Fans have been doing this for almost 60 years; he’s had the reigns for about 5. Non-resident fans try to be as supportive as possible. However, there’s still a sour taste in their mouths about demolishing the Black Hole. The Raiders are an institution in California and in the NFL. Could you move Harvard? Could you relocate the White House? This decision is tantamount to something that drastic for Raider Nation. The Raiders brand is recognized worldwide. Everyone knows the Silver and Black. How many professional sports team had a song written just for them by a multi-platinum recording artist?
Perhaps as an olive branch, Mark Davis has publicly vowed to refund the money that ticket holders have shelled out already. That may be an empty promise, but for a man who seems so eager to get rid of his burdensome inheritance, it’s probably a small price to pay. For now, we’ll grin and bear it, support our team through gritted teeth and forced smiles, and be a strong nation for the men who give their blood, sweat, and tears for you each and every week. They still need all the support they can get. You wouldn’t abandon your kids just because you got a divorce and they were forced to move out of State with your ex-spouse, right? Loving a team means loving them no matter where they are, and that’s part of the responsibility we have as die-hard fans. So before it’s too late, if you haven’t already done so, plan your trip to O.Co now, take your friends, family, and loved ones and experience that Commitment to Excellence one last time.