Nothing Is Simple…

In the last 36 hours, the Oakland Raiders’ move to Las Vegas hit a washboard surface on the highway.  Sheldon Adelson and his family took their reported $650M out of the deal but the Raiders’ stance at that point was nonchalance because Goldman-Sachs had assured them of financing.  Indeed, Goldman-Sachs would not be “strapped for cash” if they did this deal but there was one little thing that still had to be taken into consideration:

  • Sheldon Adelson has a reported net worth of something near $30B and – not surprisingly – he does a lot of business in the world of financing projects here in the US and abroad.  When he could not reach a deal with Mark Davis, Goldman-Sachs saw this deal in a different light and they backed out too.

I said earlier this week that this story still had plenty of moving parts and actors who had not yet delivered their lines in the saga.  Well, at this point, you can call it a flat-out goat rodeo.  This report from espn.com announced the unraveling of the deal.

Later reporting on espn.com suggested that the Raiders had three options at this point:

“The Raiders could find another investment bank to replace Goldman Sachs in the deal or take on another partner to replace Adelson, in advance of the late-March owners meeting where their relocation to Las Vegas was to be considered. They could also return to Oakland.”

That sounds simple and straightforward – – except that the same report also says that the mayor of San Diego has inserted himself into this situation by telling the NFL that the Raiders could move to San Diego.  The NFL is supposed to vote on the Raiders’ application to move to Las Vegas in March of this year so keep your eyes and ears open here; it is going to be a wild ride.

NFL Commish, Roger Goodell held his regularly scheduled news conference the other day – the one they often call “The State of the League Address” – and there is one question that I wish someone had asked him related to this whole Raiders’ relocation situation.

 

Mr. Commish, the Raiders’ application to move to Las Vegas is in the hands of the league for consideration at your March meeting.  That application calls for construction of a new stadium that will be ready for the start of the 2020 season and that the Raiders would remain in Oakland from 2017 thru 2019.  Last year the Raiders had the lowest average home attendance and the lowest total attendance in the NFL by a significant margin.  How can the NFL expect the fans in Oakland to continue to pay major league prices to a team that has a countdown clock running?

 

The fact is that the Raiders played to an average attendance in Oakland of 54,584 last year; the team that ranked 31st in the NFL on that metric was the San Diego Chargers who drew an average of 57,024 at home.  The median average home attendance in the NFL last year was Seattle at 69,073.

Meanwhile, as we approach Sunday’s Super Bowl, it is time for another annual story.  It is illegal in the United States to wager on the Super Bowl except in the State of Nevada; that prohibition extends beyond casinos where legal gambling of other types is ongoing; that box pool where you pick squares to match with the score at the end of each quarter of the game is also illegal as is the $10 wager you make with your co-worker on the outcome of the game.  We all know that sort of thing happens and most folks shrug it off as “no big deal”.  However, when you add that sort of wagering to the amount estimated to pass through the hands of your local bookmaker and offshore Internet sportsbooks, the total handle for the Super Bowl is in the neighborhood of $4.5B.  The Nevada sportsbooks will probably handle between $100-150M on the game.

The reason almost all of the betting on the game is illegal is something known as PASPA – the Professional and Amateur Sports Protection Act of 1992.  Yes, PASPA has been around for 25 years now and even if that $4.5B estimate is inflated by 25%, there is a ton of illegal gambling going on that PASPA has yet to find a way to curtail.  If gambling on sports in general – and the Super Bowl in specific – is a danger to sports and thereby puts them in need of PASPA’s “protection”, then the law has been a dismal failure.

I am sure you have read/heard about the challenge that the State of New Jersey has made to PASPA.  As things stand right now, several other states have joined New Jersey in that challenge and the case is under consideration by the US Supreme Court.  There is no chance of an imminent ruling because the Supreme Court has said it will wait until there is a new Solicitor General of the US who has had time to file his/her brief on this matter.  The Solicitor General is the person/office in the Department of Justice that represents the United States in matters before the Supreme Court.  At the moment, there is no Solicitor General because the tradition is that the incumbent resigns when a new Administration takes over in Washington.

It cannot be a mystery to anyone who has read these rants for even a short while as to what I would prefer as a decision from the US Supreme Court…

Finally, as the Super Bowl game approaches and people get in the mood to watch and rank the Super bowl advertisements, let me give you a definition from The Official Dictionary of Sarcasm:

Advertisement:  A medium through which people who truly care about your welfare (and not at all about money) provide you with helpful, extremely subtle reminders that your bad breath, body odor, cell phone provider and make of car all have to go.”

But don’t get me wrong, I love sports………

 

 

16 thoughts on “Nothing Is Simple…”

  1. There are lies, damn lies–and the Sports Curmudgeon.

    It is common Raider knowledge that the Oakland Raiders set a 2016 record for season tickets sold in their beautifully modern stadium. That statistic shows renewed interest in the Raider franchise by rabid fans. Yet the attendance statistics would have us believe that fan interest is low. It ain’t necessarily so. Ask any opponent player what they think of the Oakland Coliseum.

  2. I live in the Bay Area. The “beautifully modern” stadium is Oracle Arena where the Warriors currently play, NOT the O.Co Coliseum which is currently home to the tarps on “Mount Davis” that ruined the views for A’s fans that used to have a great view of the East Bay hills as well as the occasional sewage backups, even if some cosmetic upgrades were made. So, while in raw numbers the Raiders are at the bottom of the barrel (officially) this really has to be compared to the stadium capacity as a percentage, and should only include fans actually present (as opposed to the many empty seats at Levi’s that “officially” held fans at Niner games).

    However, Tenacious is correct about the generally rabid level of support by Oakland citizens for their Raiders. As I have opined before, the problem of stadium financing is pricing fans out of the market. This is precisely what happened to Oakland, starting with the high prices for the personal seat licenses (the first change away from “permanent”) that were only good for ten years. They aren’t idiots in Oakland, and did stay away from the bad deal foisted upon them by Al Davis.

    The idea that San Diego will welcome their bitter rivals with open arms is risible, because there are 50+ years of deep hatred for the other guys. I recall a 49er broadcast where one of the color commentators was a Chargers LB when he played about a decade before. There was a report during the game about something disastrous happening to Oakland, and his view was along the lines of “couldn’t happen to nicer guys”, for which he was reminded on air that such personal opinions weren’t allowed. My scrumhalf colleague in San Diego will doubtless have an opinion, but I’d ask who is hated more, the Raiders or the Dodgers? I don’t see support there for the Raiders, but for the Chargers freed from Spanos.

    Fundamentally, to be a viable option Las Vegas needs more people, and must have a domed stadium if the NFL start times will be continued. That will run into a lot of money. More people also means more water will be needed which is already the subject of serious contention (especially regarding the Colorado River, between Mexico, CA, NV, UT, CO, AR among others) and that may constrain the fan base. Unless one of the other casino magnates (such as Wynn) jumps in I don’t see this happening at all. One thing to remember is that while lots of money in general sloshes around Vegas, there is very little built there making products from raw materials (generating a robust profit), and so there is the need to get more money from somewhere which in the case of Vegas means skinning the rubes and the shows. Popularity is a fickle thing, especially for a multiple-hour road trip to LA, and I’m sure some of this figured into G-Sachs’ analysis.

    Oakland will have the opportunity to build a new stadium when the Warriors move to SF at the site of Oracle Arena. It already is a site supported by transport and is zoned for that use. It will be much less cost especially considering the 650 million transfer fee (which does what, exactly?) required for the move to LV.

    Lastly, the request from the Raiders is to move to Las Vegas. IANAL, but I would expect that a formal submission for revision would be required and another analysis presented. That will push the project back by a year, at least.

    1. rugger9:

      If you rank 2016 NFL attendance by percentage of stadium seating, the Raiders rank 30th in the NFL; they are only ahead of San Diego (32nd) and Washington (31st). The Browns, the Rams and the Jags played to a greater percentage of seats filled than did the Raiders in 2016. Here is the link.

      I agree that developing a fanbase in San Diego would not be easy, but when I saw the Raiders/Chargers in San Diego this year game on TV, it sure seemed as if there were as many fans in Black and Silver as there were in Powder Blue.

      Las Vegas is far bigger than Green Bay, bigger than Kansas City and is close to the size of Charlotte and Jax.

      1. While the size of LV is where it is, there are some qualifiers:

        Green Bay is committed to the point where the citizens own the team, and I’m pretty sure there is not much else to do there once it gets cold aside from ice fishing.

        Kansas City is much like Oakland in their rabid support of the Chiefs, another AFL rival. When it gets cold, not much else to do unless it’s college hoops. Long ago the NBA’s Kings were there and they are now in Sacramento.

        Jax’s attendance has been an embarrassment for a very long time, and the team has been rumored to leave to somewhere else many times. Mostly poor performances did not help matters either.

        The other thing to consider about Vegas is that most of the people are from somewhere else and many of them as artists would not necessarily have the fundamental gut desire burning for the “Vegas Raiders” enough to wrap their social schedule around the team. That doesn’t mean they don’t or wouldn’t love, appreciate or play the game (they do), I just don’t see the commitment level one sees in GB or KC, it’s more like Jax that will be needed to succeed. I’m not up to speed on local wages, but financing a billion dollar stadium will require high ticket prices (something worth a topical rant, I think) and I’m not sure there are enough 1) fans with enough 2) disposable income available to keep the seats filled. Discounts to boost attendance will eventually run afoul of the relentless financing requirements.

        On Raider fans in San Diego, it’s about a 75 minute flight from here to there, and lots of airlines go. I think that observation is more of a testament to Oakland support than San Diego acquiescence. Spanos’ machinations crushed the spirit of the fan base and they voted with their feet (h/t Trotsky)

        1. rugger9:

          My understanding of the “business model” for the Las Vegas Raiders is something along this line… There will be 8 home games every year and many teams have fans that travel to see their heroes play about once a year. If Las Vegas is one of the “destinations” for the team, the Las Vegas folks think that plenty of them will choose to come to Vegas for a weekend – as opposed to going to Buffalo for a weekend – to take in a road game. The idea is that Las Vegas would be a “road trip destination” for a lot of fans. Will that work? I have no idea. I will say that I would much rather go to Las Vegas for a weekend than to many other NFL cities – – including Oakland.

    2. Let’s be clear: in San Diego, the Dodgers are generally DISLIKED; the Raiders are UNIVERSALLY HATED! Oh, there are “some” misbegotten citizens of San Diego that consider themselves Raider fans, but the vast majority of Silver-and-Black clad folks you see in the Qualcomm Stadium stands during a Raiders-Chargers game are travelers from Oakland OR LA (still a hotbed of Raider fandom). No, there is little doubt that the Raiders would NOT be well-received here in San Diego.

      But more to the point, if the fine citizens of San Diego wouldn’t pony-up for their beloved Chargers, you can rest-assured they wouldn’t give up a red cent to Mark DAVIS and the Raiders since there would still be required a hefty public investment in order to enable such a move.

      1. Pete:

        As I said to Price in answer to another comment, it is the current mayor of San Diego who made the contact with the NFL about possibly having a team reside in your fair city. At the moment, there is only one NFL team actively considering a relocation and that one is the one owned by Mark Davis – – he of the Friar Tuck haircut. Be patient, one of these days, the Jaguars may be looking for a new home…

  3. I’ve been told those office boxes are legal IF there is no “cut”. That is, if there are 100 boxes, and the prize fund is $100, it is legal – but if the prize fund is $80 and the guy running it takes $20 for his work, THEN it is illegal. Sort of like a home card game – if it rotates thru each guys house/basement/garage, host supplies food and beer, fine. If on guy hosts all the time and takes out an ante from each pot to pay for food, drinks, etc, it is “running a game” and illegal.

    Why would LV need a dome? If it is the temps, give them a few road games to start.. teams have started with 3,4, or more games on the road to start a year, especially if they share the stadium with a baseball team in the playoffs.

    1. Ed:

      The report I read said box pools are illegal as per PASPA. I am not an attorney so I have no idea how PASPA might apply there so I was taking the report I read at face value. Perhaps you are right…

      Las Vegas surely would not need a dome to keep out the rain; the dome would be there to keep out the heat in the summer – which extends into late September out there. No way the team would want to play a home exhibition game in the second week of August without a dome – – unless it started at about 10:00PM local time.

      1. It wasn’t a lawyer who told me, but it was a cop. That is why they can post the things up in public in bars and the like (or the beer distributor I got mine at)

        the home exhibition I forgot… I have seen the Jets play 4 and 5 road games opening the year back when they were at Shea, was thinking of them

  4. I read that the NFL has said they would not agree to a casino owner having a financial interest in an NFL franchise. If that is the case, then Adelson is barred from contributing his $650 million. My thought about G-S is that their business model is all about financing projects that have a reasonable risk profile vs the upside ROI. There is something about the risk or the possible reward that soured. No matter how much the people of Vegas want a team, it appears they will not get it unless the city, county, or state ponies up some money.

    1. Doug:

      Maybe the NFL owners have a problem with a casino owner having a piece of a team – despite some of the less than laudatory ways some past and present owners have accumulated their fortunes. I suspect that Goldman Sachs evaluated the potential future deals they might do with Sheldon Adelson and compared that to this one-off deal they can do with LV to build a stadium. I think that financial consideration was a key element – if not THE key element – in their pulling out of the deal.

  5. Professor:

    I think the folks here in San Diego would be much happier with roads without potholes, than with the much hated Raiders.

    A devoted reader

    1. Price:

      Your mayor is the one who contacted the NFL. All I did was comment on what that might engender…

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