49ers get $200M From NFL for New Stadium, Where Does that Leave Raiders?

by Marcus Allen Krause on Feb 4, 2012 11:08 AM PST

"Today's vote is an important milestone for the 49ers and their fans," NFL commissioner Roger Goodell said. "It is a solid endorsement that adds to the strong support of the South Bay community. This step will allow the 49ers to move forward toward making the dream of a new stadium a reality."

The news came out that the NFL has approved their first loan from their G-4 loan program established in the newest CBA for the amount of $200 million to our cross town rivals the 49ers. What this means for the Raiders is that there is quite a bit less of incentive for San Francisco to have the Raiders join them in their new stadium since they have now acquired all the additional help that they needed. They already have the amount needed for the funding for their BILLION dollar new stadium and it appears (as of now) that they will be the only team inhibiting it in Santa Clara.

Things could still change and the zoning agreements for the new stadium did OK it for 2 NFL teams to use it so the door is not completely closed on the Raiders joining them. Presumably the Raiders made their own choice to not join San Fran in Santa Clara and are still lobbying for improvements to be made in Oakland or they probably would move to L.A.. Oakland City is still at least trying to keep the Raiders in town so we will see how that develops in the near future. The Santa Clara stadium is scheduled to be open by 2015 and could be open as early as 2014 so hopefully that will help speed up the information we receive on our own stadium plans.

Roger Goodell did announce in a pre-Super Bowl press conference that the NFL itself would prefer to not move any of their current franchises from their respective cities and to just have an expansion team set up in L.A.. Oh did I say an expansion team? I meant to say TWO expansion teams. That is correct, due to scheduling conflicts with an odd number for NFL teams if we are getting one expansion team we would be getting two. Not only would that apparently be the plan, but it looks to me like both would be inhibiting that LA stadium.

Having 2 expansion teams share the same stadium in a new market as fickle as LA seems like a really terrible idea to me. Seriously, it seems like for LA to support a team it needs to be a winner and expansion franchises do not win right away normally, so having 2 splitting up the local fan base and trying to get them to show up to the games seems implausible to me. We will see in the future what happens with it though since everything is still up in the air.

I am still hoping that Oakland manages to keep the Raiders right where they are. Its really "great" to know that Roger Goodell is so committed to the 49ers fans and their dreams of a new stadium while allowing the Raiders to toil away in their crap stadium. Candlestick Park definitely needed to be replaced as well but it just annoys me that the NFL is eager to help them while not lifting a finger to help us. A solid endorsement to the North Bay area and their struggling economy would really be nice right about now Mr. Goodell. Obviously, I wont be holding my breath waiting for the NFL to help us though.

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Comments

Two expansion teams is a horrible idea

it will dilute the talent in the NFL. Seems like there are not enough good players for all the teams currently so adding expansion teams will increase that. Might as well bring two UFL teams over and have Panda coach them

by dawad34 on Feb 4, 2012 11:55 AM PST reply actions

Have to agree with you there

Why the need to expand again?

by rightnasty on Feb 4, 2012 12:18 PM PST up reply actions

It's all about revenue they don't care about the quality of play as much as the dollar!

Al Davis the Greatest Raider of all times... You will live forever in the hearts of true Raider fans...RIP

by samiam2112 on Feb 5, 2012 9:27 AM PST up reply actions

I think the Niners only got such support because they had a great season this year

If they’d gone 8-8 like the Raiders the NFL probably wouldn’t give a toss about them either.

by Chris2814 on Feb 4, 2012 12:10 PM PST reply actions

This guy has some good points

Not sounding very positive so far.

If you haven’t done it already, read Nina Thorsen’s KQED interview with the Trib’s Oakland reporter Angela Woodall. Then read Ray Ratto quick opinion piece at CSN Bay Area.

Then sit back and consider what happened. If you’re struggling to come up with anything to describe it, you’re not alone. Because nothing actually happened. No forward progress, all spin, posturing, and gesticulation. Oakland fakes like it’s doing something, then shrugs its shoulders when nothing happens. MLB says nothing and does roughly the same. San Jose tries to do something and is blocked by MLB and the Giants.

I’m going to follow the Coliseum City project because it’s my duty. As long as the City of Oakland and Alameda County make plans for it to any degree, it’s worth covering. I don’t think it has legs. I’ll explain why:

Unless there’s a public financing component, a Coliseum ballpark will have a very difficult time paying for itself.
MLB wanted a downtown, waterfront site for an A’s ballpark. The Coliseum fits neither criteria.
The "City" part of Coliseum City will require its own large public investment. It is by design its own redevelopment district. Oakland will try to leverage existing and future TOD (transit oriented development) grants to help developers, but it’s a pittance compared to the overal cost (<5%). For instance, a 4-star, 800-room, full service hotel would cost $160 million to build, based on a $200k per room construction cost. That leaves out the other retail and commercial development costs. How much of that will the city/county have to subsidize to lure a developer?
The Raiders appear to be entirely site-agnostic in their search for a new stadium.
The chance that the NFL will award two $150 million G-4 loans to the Bay Area teams instead of spreading the love around to LA, Buffalo, and Minnesota is slim at best.
The Warriors are going to play Oakland and San Francisco off each other to get the best possible deal.

With so much uncertainty and so many variables, who is going to take the lead and make that heavy first investment? Private developers won’t do it unless the teams are committed first as the anchors. Teams won’t do it unless they can get something to help them pay for their new venues or give them revenue down the line. That’s the very least they should get considering the amount of construction upheaval that the project would create. The city and county can only act as facilitators. They don’t have the money to shoulder much of the development cost.

Ratto indicates that Oakland is actually playing for the Warriors and Raiders at this point, with the A’s practically out the door. That’s pretty much what I’ve been saying for years. Sadly, Oakland would be best served trying to make the best play possible for only one of its tenants. Otherwise, it might half-ass the efforts for both. Based on what we’ve seen coming out of Oakland so far, it’s quite good at half-assing. Or in the A’s case, no-assing.

http://newballpark.org/2012/02/01/nothing-from-nothing/

by rightnasty on Feb 4, 2012 12:21 PM PST reply actions

LA here we come!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

The RaiderLaker

by JaggerJaw on Feb 4, 2012 12:59 PM PST reply actions 1 recs

It would be cheaper to rebuild on the same O coliseum lot

The only plan in is city of industry for the Raiders because AEG does not want them. In that situation the team has to pay for the stadium. No G4 loan for relocation and a relocation fee around 350 million. They would need an investment partner to help fund the stadium and the Raiders I don’t think have ever dropped a dime on building one. If they could get some sort of finance sponsor like AEG did with Farmers insurance with 700 million they could pull it off with psls and some loans they could easily pay back with the revenue generated by just being in L.A.
Also Rodger Goodell is a turd and it is whacked that the NFL wont help a team move with the new G4. It is only an incentive to stay in its current market. The Land is already paid for in Oakland just like Ed roskis plan. The only true incentive is the money machine the Raiders would become in the L.A. market.
This what I have been reading. Also heard if Carol Davis dies Mark wouldn’t be able to afford the inheritance tax and would be forced to sell like the Rams did to Kroenke.

by raider.freak on Feb 4, 2012 5:04 PM PST up reply actions

Why's that?

Also heard if Carol Davis dies Mark wouldn’t be able to afford the inheritance tax and would be forced to sell

by rightnasty on Feb 4, 2012 7:03 PM PST up reply actions

Prior to his death in October 2011, Al Davis owned 47% of the Oakland Raiders per CSN Sports. Upon his death, this 47% equity stake in the Raiders was inherited by Al Davis’ wife, Carole Davis (Carol Davis). Accordingly, no estate taxes are currently due on the Raiders, since spouses have an “unlimited marital deduction.” But upon Carole’s passing, the team will be inherited by Mark Davis, the son of Al and Carole Davis. At this time, estate taxes will be due on the team.

Accordingly, Carole and Mark Davis will have to plan for estate taxes. For NFL franchises, selling an ownership stake to pay for the estate tax is most feasible. Other estate planning measures, such as life insurance policies and trusts, do not adequately cover the enormity of estate tax bills for $740 million franchises. Even though publically the Raiders have maintained that they engaged in sophisticated estate tax planning prior to Al Davis’ death, we do not believe that Mark Davis will be able to settle his estate tax bill upon his mother’s passing without selling at least a part of his eventual 47% ownership stake in the Raiders.

It is worth noting that the Raiders are not unique in this situation. Estate tax planning was the reason why the Spanos family retained Goldman Sachs in 2010 to explore a 30% equity sale in the team. (The Spanos family and Goldman Sachs are no longer exploring an equity sale for estate tax planning purposes.) Estate taxes were also the reason why Chip Rosenbloom and Lucia Rodriguez, the children of Georgia Frontiere, sold their 60% of the St. Louis Rams in 2010 to Stan Kroenke. The Frontiere children needed to pay their estate tax bill.

Estate taxes in 2012 will be 35%. Estate taxes in 2013 and beyond are less clear. Since federal estate taxes are a current source of Congressional debate, estate taxes are in flux. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 expires after 2012, at which time estate tax rates are set to increase up to 55%. This could change depending on Congressional action.

Accordingly, Carole and Mark Davis are faced with uncertainty regarding their estate tax situation. If Carole Davis were to pass away before 2013, Mark Davis would inherit not only the team but also an approximate $121 million tax bill.

Ed Roski, the billionaire owner of Majestic Realty, is looking to buy a 30% ownership stake in the anchor tenant for LA Stadium. Mark Davis will be able to sell a 17% ownership stake to Roski. This would maintain Mark Davis’ equity share at 30%. An ownership share of at least 30% is required by the NFL for managing control. Accordigly, Roski would have to acquire the remaining 13% ownership stake from other Raiders limited partners. Assuming a 35% estate tax rate, Mark Davis will raise the necessary $121 million required for settling his estate tax bill by selling 17% of the Raiders to Roski.