The Raiders want a new stadium. That is not a news flash. They would prefer that stadium to be in Oakland, but the city has said they are unwilling to use public money to help fund the project. This forced the most recent stadium proposal to feature some creative ways to attempt to find the funds to make the stadium happen.
Some of the details of the proposal were leaked recently. Part of the leaked proposal included Mark Davis selling 20% of the team to the development company making the proposal. Floyd Kephart - the man who heads up the development company who has been tasked with putting the proposal together - responded to the leaked details explaining that a stadium deal will be extremely difficult to do without public funds.
The 20% stake in the team would be purchased for $200 million, which would satisfy half the $400 million gap that exists between the combined amount of $500 million the Raiders and the NFL will put up to fund the project and the proposed $900 million stadium.
The other $200 million in the proposal would come from Personal Seat Licenses and season ticket holders. There are, of course, far more details than this to the overall deal. The deadline is today for the city and county to either approve, reject, or request more information on the deal, so we could soon find out just how workable they think it is.
Kephart claims the leaked deal was just one of many options. As it stood, it was panned as "the worst by far" and "one-sided" by NFL stadium consultant Marc Ganis, who was the same guy who arranged the initial deal to renovate Oakland Coliseum in the late 90s which helped bring the Raiders return to Oakland. A deal which is still being paid off some 20 years later.
That two-decade old deal is the reason the city and county refuse to offer up additional public funds for the new stadium.
The question is, are they being unreasonable? Or is this another case of a sports team looking to get public money for a project that doesn't really offer the public the return on their investment?
Recently, John Oliver on HBO's Last Week Tonight broached this subject in great detail and raised a lot of interesting points. The overarching one being that owners of sports teams almost solely reap the benefits of the revenue from new stadiums, including events not associated with the team, and yet ask for public funding to build the venue, while threatening to move the team if they don't give in to their demands.
Here is that video (it's over 19 minutes long):
One possible response could be to suggest perhaps NFL owners don't typically have the kind of money to plunk down to build an entire stadium. Then today you see what the NFL owners received in revenue sharing and you realize NFL owners are doing pretty well for themselves.
The NFL revenue for last season was some $7.24 billion dollars, most of which was from TV deals. That amount was shared evenly among the 32 NFL teams which had a hefty check of $226.4 million dollars cut for the Raiders.
Remember when I said the new proposal had Davis selling 20% of the team for $200 million? His revenue share could easily cover that, thus he wouldn't have to sell part of the team, and still have $26.4 million left over.
At the risk of oversimplifying it, the team individually earns revenue from suite and club seat sales, sponsorship, naming rights and other properties. And they must pay all salaries and facility costs with their combined revenue.
Solving that $200 million would cut the $400 million gap in half. And if you keep the other $200 million planned to be funded by PSL's and ticket sales, you have what looks like a workable deal.
That doesn't mean it has any greater probability of happening.
Despite its seeming workability, it would be unprecedented to ask a single team to front all the money for a stadium and therefore it would seem entirely unfair. After all, only one stadium since 1997 has been built without the use of public funds. That was Metlife Stadium in New Jersey which the Jets and Giants share.
So, why should the Raiders have to do what no other single NFL team has had to do before them? And why should the Raiders have to foot the bill in Oakland with Los Angeles calling? That LA threat is what has kept NFL cities giving into demands of their respective NFL franchises for the past 20 years.
Also consider another potential wrinkle: If the Raiders find a way to build a stadium without any public funds, it makes it more difficult for every other NFL team when the time comes for them to try and strongarm their city into providing funding for their stadiums. It would be rather like when Al Davis was giving out these giant contracts to his players and pissing off other owners who in turn would have to appease their players by raising their salaries or pay more to lure in the big name free agents. Just on a much larger scale. The NFL doesn't want that. They like that they can have portions of their private business stadiums paid for by public tax dollars.
It's pretty clear the NFL is doing extremely well. Since the NFL lockout in 2010 and the eventual owner-friendly CBA, league profits have skyrocketed. While the nation has been recovering from a recession, the NFL has been raking in money hand over fist.
And while the City of Oakland is about to hit 20 years since they first began paying for a $200 million renovation of the Oakland Coliseum, the NFL just handed the Raiders $226.4 million for ONE SEASON.
Based on the fact that five years ago the league revenue was at $3 billion, their revenue should surpass $8 billion next year which would be a share of over $250 million per team.
Would public funds help out the Raiders plans to get a stadium built in Oakland? Sure. But with NFL revenues already very high and continuing to rise, there will continue to be serious questions raised as to how much help from the public the NFL and their owners should be receiving in their stadium efforts.