On the East end of the San Francisco Oakland Bay Bridge is Oakland California, the home to over 400,000 citizens It has long been in the shadow of its glitzy neighbor across the bay. In the last few years the city has changed and it is rapidly becoming the place to be in the Bay Area. Downtown Oakland once a ghost town is a midst of a Renaissance, i’ts nearly century old movie palaces, the Grand Lake, The Fox and the Paramount are popular venues for concerts. Oakland had more jazz venues then any city in bay, The Sound Room, Yoshi’s and The Piedmont Piano Company are just some of the Jazz venues in city. The neighborhoods like Temescal and Rockridge are filled with original shops and art. Then there is the Gem of Lake Merritt located downtown
In 1960, the Oakland Raiders was founded. They played their first games at Kezar Stadium in San Francisco, they shared the field with the San Francisco 49ers.
The Oakland Raiders is synonymous with this blue collar city. After early years of playing on small fields and in Stadiums on both sides of the bay, they finally had a home. In 1966 ,the Oakland Alameda County Coliseum complex opened. The team shared the Stadium with the Oakland A’s
In the late seventies, many Stadiums at taxpayers expense began adding luxury boxes to their venues. National Football league,teams must share a portion of their ticket revenue the funds help teams in the smaller markets. Luxury boxes are exempt from this agreement and is very profitable.
Oakland wanted to be apart of this movement, however taxpayer expense. In addition to the luxury boxes, the team wanted additional seats.
See Ya Oakland, Los Angeles is the place to B!
In 1982, the Raider moved into the Los Angeles Memorial Coliseum. Opened in 1923 the stadium was much older and larger than the Oakland Coliseum. For a game to be shown in the local market requires the stadium to be sold. The Memorial Coliseum with a capacity of nearly ninety thousand meant many of the games weren’t televised in Los Angeles, the nation’s second largest market.
The Raiders wanted a new venue in Los Angeles.
In 1995, Raiders majority owner Al Davis agreed to build a new stadium at Hollywood Park in Inglewood. The agreement was sealed with an handshake between the Chairman of Hollywood Park and Davis. As the agreement was being finalized, Davis shocked the Chairman and the City of Inglewood by asking for 10 million dollars. City officials initially thought Davis was joking, after all he was able to get 10 million dollars from the small city of Irwindale back in 87 and Sacramento was prepared to give him 50 million in 1990. Everyone was laughing in Inglewood at the council meeting except Al Davis.
Los Angeles, has been indifferent to football. For many in LA, there are two teams. The LA Dodgers and the Lakers. Public money wasn’t forthcoming so Davis looked north.
The Oakland Coliseum and PSL Magic
By 1995, Oakland gave Al Davis everything he wanted. Luxury boxes, 10,000 additional seats and built the team a training facility and paid for the teams moving cost. The cost to the citizens of the City of Oakland and Alameda County was over 220 million dollars in addition to the current loan.
The Raiders and the NFL believed the 220 million would be recouped through the sales of Personal Seat Licences (PSL)
A personal seat license, or PSL, is a paid license that entitles the holder to the right to buy season tickets for a certain seat in a stadium. This holder can sell the seat license to someone else if they no longer wish to purchase season tickets. However, if the seat license holder chooses not to sell the seat licenses and does not renew the season tickets, the holder forfeits the license back to the team. Most seat licenses are valid for as long as the team plays in the current venue. (1)In Oakland, the cost for the PSL ranged from $250 to $4000.
The first year was a disaster, the cost of tickets and parking was much higher than before. Many of the early games weren’t blacked out because the Raiders were unable to sell out in the enlarged stadium . The PSL strategy was a dismal failure.
Because games rarely sold out, fans who bought leftover tickets on game day wound up sitting next to other fans who had paid a premium for a right to sit there. The Raiders sued the Oakland Coliseum Authority. The team claimed in its lawsuit that it was misled by the Coliseum authority with the false promise that the stadium would sell out. A Jury awarded the team $34.2 million dollars. By 2005 both sides ended the PSL program. (2)
Adding insult to injury ,the Raiders received a substantial discount on the deal they paid the county. The top section of the expanded stadium known as Mount Davis was later covered in tarp, and not used.
Raiders majority owner Al Davis, died in 2011 and his son Mark Davis took the helm.
Oakland Coliseum Old and Dingy
With the lease expiring in 2013, the Raiders wanted a new state of the art stadium in Oakland, funded largely with public dollars. The cost of building football stadiums have skyrocketed.
In 1975, 79,000 seat Louisana Superdome opened at a cost of $150 million dollars (nearly 600 million dollars in 2017). The 80,000 AT&T Stadium in Texas, home to the Dallas Cowboys cost 1.3 billion dollars. With Football Stadiums costing a billion dollars, the NFL has encouraged teams in the same market to share a facility. The New York Giants and the New York Jets share the Met Life Stadium in East Rutherford, New Jersey.
The 1.2 billion dollar Levi Stadium, home of the San Francisco 49ers was built with two NFL teams in mind. The stadium has an extra set of locker rooms. Mark Davis, was never open to the idea. He didn’t like the location in Santa Clara, 30 miles west of the Coliseum. Didn’t liked the layout.
Davis shopped the team to San Antonio, San Diego and Las Vegas.
Good Bye Oakland, Vegas is Mortgaging The Farm and Grandma’s Teeth
Las Vegas a metro area of 2.3 million, long wanted professional sports. The area has been a form of kryptonite to professional sports due to gambling.
Last year, the National Hockey League announced Las Vegas won the expansion franchise and the Vegas Knights Golden Knights owned by Bill Foley and the Maloof Family (former owners of the Sacramento Kings) will play their first season this fall at the New T-Moblie Arena.
Too Much Greed for a Billionaire
Sheldon Adelson Billionaire and CEO of the Las Vegas Sands Corporation was the reported architect in bringing the Raiders to Las Vegas. Adelson who’s wealth is estimated at 32 billion dollars agreed to invest 650 million towards the Stadium. The Raiders would in invest 500 million and $950 million dollars in public money the largest taxpayer subsidized stadium deal in history. Adelson reportedly persuaded Goldman Sachs to finance the stadium.
With the exception of approval from NFL owners, every thing was in place for the Las Vegas Raiders.
The new stadium would be shared by the University of Nevada, Las Vegas football team and would host other events in the city.
Adelson, with holdings worldwide learned the Raiders were negotiating without him. In the lease the Raiders would pay one dollar a year and annual rent. The could restrict scheduling for UNLV footballs games. Other proposals and revenue streams benefiting the Raiders caused Adelson to pull out.
In a Statement Adelson said “In addition to being discouraged by the surprise submission, I was deeply disappointed for the disregard the Raiders showed our community partners, particularly UNLV, through the proposed agreement,”
The Raiders eventually received the funding they needed to build the stadium
Las Vegas Raiders
Football is a business, Mark Davis, made a tidy profit, a billion dollars, Oakland didn’t have a chance. The Citizens of Las Vegas are on the hook for $950 dollars. The money will come from the hotel tax, any shortfalls will come directly from taxpayers.
The Raiders will play in Oakland until the new stadium is completed in 2020. Fans are not likely to make the five hundred and fifty mile drive on Sundays to Las Vegas.
The Vegas Market is considerably smaller(40th) and less affluent than Oakland’s (6th) The question becomes will Las Vegas Tourist help fill the stadium, will the Vegas fans support the team as Oakland did?
Mark Davis, has little to concern himself with for now. He has a billion dollars, its not likely that he would received that amount of public money from any medium or large city. Few cities are willing to take the risk Las Vegas has.
Worst stadium business deal in the world ?
The Business Insider (4/2/17) says Las Vegas made the worst stadium business deal in the world . Clark County taxpayers will contribute $750 million to the new arena, a record for a sports facility—about $354 per resident, taken from an increased tax on hotel rooms. That tax currently pays for schools and transportation, in addition to tourism-related expenditures.
Some cities forgo future property tax revenue for a pro stadium, or issue tax-free bonds paid off by the teams themselves, or contribute complimentary infrastructure like utility work or a nearby train station. But Las Vegas will pay for the thing itself—and with a tax on hotel rooms, something it already has. (Bonds will be repaid over 30 years with the tax revenue.)
Half the room tax goes to support state schools and county transportation. So if the new tax on hotel rooms directed to the stadium does drive room prices down, the money comes out of schools and buses. In fiscal year 2015, a quarter of the tax paid for Nevada education, another 14 percent for the Clark County School District, and 9 percent for Clark County Transportation.
“So much of this action was premature and rushed through,” Chris Giunchigliani, the lone dissenting official on the Clark County Commission, told the Las Vegas Review-Journal after the measure was approved in November. “It’s bad public policy to take public tax dollars, especially the largest subsidy (for a stadium project) in the United States, and claim it’s going to benefit economic development.”
A Billion Tears
Oakland is unique, no other city in recent memory has lost the same professional team twice.
I am a life long Raiders fan, the team in my blood. I went to my first game in the seventies. My older brother worked for General Motors and would give me game tickets and I would often go alone to games. Like many Raider fans, I am passionate about the team, win or lose. When they moved to Los Angeles, my heart was broken.
Today I have a greater understanding of the business of sports. Fan loyalty ranks a distance second to the all mighty dollar.
Many cities enter into fragile financing schemes that leave the local budget vulnerable to shortfalls. Forcing many cities, to make cuts in police, fire ,schools and other services to make up for the shortfall. Taxpayers obligated to pay for these buildings, after the teams leave. One City, St Louis, Missouri is fighting back, they are suing the NLF, they believe the NFL defrauded the city.