49ers could have Raiders over a barrel in Santa Clara

When the 49ers rolled out the final cost estimate on their Santa Clara stadium, many including yours truly were incredulous. We thought that the 49ers would need help to pay it off, probably from a partnership with the Raiders. With a $80 million per year mortgage to pay off, the challenge to bring in enough events to properly service the debt should bring the 49ers and Raiders together. Yet there’s plenty of reason to think that the two sides may have a difficult time making that pact.

It all started when the 49ers negotiated with the City of Santa Clara to control full rights to seek a second tenant. The 49ers can control the terms of the lease, covering rent payments and details, revenue sharing at the stadium, and coverage of costs to hold games at the stadium. The lease can go in any number of directions, making it difficult to determine what the lease might look like. If the Raiders had gotten in on the ground floor and committed to Santa Clara early, they might have been able to shape the discussion. However, they also might have been asked to shoulder half of that $80 million mortgage. Given the difficulty the team has in selling tickets and PSLs, that’s a huge gamble.

Instead, if the Raiders ask to be a tenant in Santa Clara, they could pay a flat rate per game or per season. Right now they only pay $1.5 million in rent at the Coliseum, but that masks the millions of dollars it costs to operate the stadium. The 49ers’ stadium lease has language that requires an additional $1 million annual payment if the Raiders move in. There are costs for utilities, insurance, hundreds of personnel for concessions, parking, and security, plus emergency services. It’s common for total operating expenses for a full season of NFL games to run in the $10 million range or more. So those costs could be factored into the rent payment, or they could be left for the Raiders to pay separately on top of a rent payment. Knowing that, $11 million should be the baseline for an all-inclusive lease for the Raiders.

Of course, we know that the 49ers aren’t going to allow the Raiders to merely cover operating costs. They need to pull their own weight. The Raiders may have to pay $20 million per year to play in Santa Clara, or alternately, $1 million per game while surrendering concessions revenue. If that were to happen, the Raiders could find themselves somewhat stifled in terms of maximizing revenue generation. Still, that could prove a better proposition than a brand new stadium in which the Raiders would have to cover all of the costs themselves.

Then there’s the issue of stadium capacity. With 68,500 seats, the Santa Clara stadium will sit in the middle of the pack among NFL stadia, and 1,500 seats less than Candlestick Park. The Raiders have been operating at the 63,000-seat Coliseum since they came back in 1995. Last week they decided to tarp 10,000 seats to create their own artificial scarcity. If the Raiders come to Santa Clara, they could artificially reduce capacity by adding their own tarps or move forward with 68,500. If they do the latter, it’ll be a tough sell given the team’s history of underwhelming ticket sales. It’s not a make-or-break scenario, but it wouldn’t look good if the Raiders had to immediately tarp sections of a new stadium once they moved in.

The Raiders are looking to hire a new executive, perhaps to assist Amy Trask and Mark Davis on what will surely be difficult review of the team’s future stadium options.

31 thoughts on “49ers could have Raiders over a barrel in Santa Clara

  1. After reading this: LA just passed Dublin and SC as possibly hosting the Raiders and is gaining on Oakland!

  2. “If they do the latter, it’ll be a tough sell given the team’s history of underwhelming ticket sales.” (since 1995) Sorry, not important, but the defensive Raider fan in me has to bring up the overwhelming sellouts pre-LA. Sorry, carry on.

  3. With regards to the Raiders moving to LA. I think the fact that the team would have to pay a 500 million relocation fee to the NFL and would have to agree to share the stadium with another team makes LA less appealing. I think when it’s all said and done the colesium gets a major remodel for football only. That’s unless Mark Davis ends up selling the team, then it’s all a different story.

  4. @eb,
    I know a lot of those pre-LA, FORMER! Raiders fans. They either don’t follow the team at all now a days OR they’re now Niners fans. I hear it all the time “I use to follow the Raiders during the Stabler years before LA…” They’re not coming back.
    That said, the Raiders did have legit sellouts during most of the Gruden years. A winner on the field can do wonders for team attendance.

  5. @edward John,
    Welcome! A half a billion dollars for a team to relocate to LA? Where’d you get that? I’m with you though on a totally remodeled coliseum for football. IMHO that’s my top choice for our Raiders.

  6. Teams have until the 15th to get the paperwork to the league for relocation. It would actually be in the Raiders best interest to move to LA instead of Santa Clara or to stay in Oakland. There was a 2011 article that stated the estimated revenue in 2016 for a LA team would be over $107 million. Since the team is supposedly broke we won’t have to worry about relocation to LA.

  7. “The Raiders may have to pay $20 million per year to play in Santa Clara, or alternately, $1 million per game while surrendering concessions revenue.”
    .
    I doubt the Raiders would be able to make an additional $2 million per game in a new 49ers stadium.
    .
    They’re better off staying at the Coliseum, waiting for the A’s to leave, and then rebuilding the Coliseum’s lower bowl.

  8. Return of the L.A Raiders???

    They could sell it well

  9. eb, c’mon man. The “good” attendance years for the Raiders, in Oakland, ended in 1982. I was 7 years old.
    .
    It’s like when Dolich said the A’s had a good “15-20 year run” when he was on the radio the other day. It’s kind of irrelevant.

  10. Can’t wait till the end of the year… Finally closure with Raiders and A’s stadium situation

  11. Yeah, I’m not seeing the Raiders making enough to pay the costs that Santa Clara would bring. They’re not going to attract new fans (and may lose some of the loyal Oaklanders) and not going to be able to increase prices a whole lot. Plus I doubt they want to help the 49ers any. They’re better off making a go of it at the Coliseum.

    On that subject, who pays the game-day expenses for the Raiders now?

  12. Santa Clara is only a short term proposition during possible construction. If the Raiders were ever serious about SC long term, they should of been working with the 49ers earlier as the article points out.Of course I don’t think the Raiders had sharing the stadium in mind from the get go. A new OAK lease may not be signed anytime soon.The dominoes have to start falling in place at some point once somebody makes some kind of decision.though it probably won’t be the city of Oakland.

  13. Mark Davis may ultimately have to decide on whether it will be better for the Raiders to either share the Santa Clara stadium with the 49ers, or to share a stadium in LA with some other NFL team. Most likely, It will probably be a few years before the Raiders will be better able to answer that question. In the meantime, Mark Davis can help himself in making any permanent decision by at least signing a short-term lease with the Santa Clara stadium. By testing out this arrangement, the Raiders will be able to measure the Raider fans’ interest in this venue, as well as its long-term financial potential. It might work out very well, it might not. Also,at that time, Oakland may finally come up with an acceptable new/renovated Coliseum deal. The Raiders have the luxury of letting time play out for their best ultimate option.

  14. Both Brian and llpec have strong points….i do think that the move to Santa Clara plus increased ticket prices could effect some extreme Pro Oaklanders who might act immature just like how they treat the A’s..

  15. Where is the best chance for the Raiders to get some kind of subsidy to lower their costs?

    A) Oakland – Good chance (through JPA).
    B) Santa Clara – Zero chance.
    C) Los Angeles – Good chance (via AEG).

  16. eb:

    Sorry, not important, but the defensive Raider fan in me has to bring up the overwhelming sellouts pre-LA. Sorry, carry on.

    In those days, the capacity of the Coliseum for football was around 54000. In other words, about the same as the Raiders are going to configure the stadium for next season.

  17. What kind of subsidy would the JPA be able to provide realistically though?

    • @Dan – The $20 million annual subsidy currently provided could go on indefinitely as long as a lease is signed.

  18. What limits the profitability of football only stadiums are the limited number of event dates. NFL stadiums, with one exception, have ten to twelve NFL event dates at most. That is why we often hear about plans to build football stadiums with roofs in order to make these venues multi-event all year round facilities. The recent Oakland football stadium talk has mentioned to include the possibility of having a roof.

    Regarding the new Santa Clara stadium, the possibility of near doubling the number of NFL event dates is just too enticing to ignore. Also, having more scheduled events will add to the stadium naming rights value. For these reasons it’s no wonder why the new Santa Clara stadium is being built with three clubhouses.

    I do not believe neither the 49ers nor the Santa Clara stadium operators will play hardball with the Raiders, if the Raiders so choose to share the facility.

    • @llpec – The 49ers own and control the company that will operate the stadium. While it should work out that getting a 2nd team and other events like the Kraft Fight Hunger Bowl should help secure a naming rights deal, it’s not realistic to expect the 49ers to go into the hole to make that happen. They haven’t settled for less on naming rights so far.

  19. “In those days, the capacity of the Coliseum for football was around 54000. In other words, about the same as the Raiders are going to configure the stadium for next season.” Yeah, but one could also argue that in those days they were the Bay Area’s most popular sports franchise.
    Jeffery, Yeah, I know, but one also has to acknowledge the cluster *bleep* that was the return, in almost every aspect. No star players, no consistent winning, psls that weren’t lifetime, butchering the coliseum, hate for Al, etc. Unlike the A’s(unfortunately), there really are A LOT of Raider fans in the immediate region.

  20. So your saying llpec, that the Raiders could get a more friendly deal if they play at S.C Stadium because the 49ers could use the extra dates and naming rights… yeah i think your right.. if they can knock the price from 20-16-17 mil, then maybe… how many south bay fans are Raider fans really??? i mean I know more Raider black hole fans from Napa, Santa Rosa, Petaluma and above that come down then i know ppl from San Jose or gilroy.. just sayin,

  21. It wouldn’t surprise me if the 49ers are in part holding out for word on Super Bowl L. With Miami basically saying “give it to us and THEN we’ll try to push through a vote to approve updates” odds are stacked in SF’s favor to get it. Being the name associated with Super Bowl L will bring in huge amounts of money.

  22. @berry, I understand your concerns about whether the new Santa Clara stadium will be able to attract enough Raider fans to that locale. If the Raiders move there, at least on a temporary basis, we may just be able find out. Since most games will be played on Sunday, traffic and the added travel mileage for East Bay Raider fans should be somewhat less of an issue.

  23. @berry

    Man, your math just does not compute…you prefer Los Angeles to Santa Clara for the Raiders? Last time I checked, Santa Clara was a helluva lot closer for fans coming from “Napa, Santa Rosa, Petaluma and above” than Los Angeles.

  24. Yes because guys like Ice Cube who is from L.A and does our anthem, can rally the older generation Raider fans from L.A all the way to Compton to usher in a “second chance” Raiders team…it can be marketed very easily…..maybe L.A could get more outta Raiders second time around then Oak or S.C……….but it is still Oaklands to lose…that is why I pray mayor quan finds a funding source to get the Raiders a new stadium..I mean really I hope….

  25. berry, I AM the OLDER GENERATION. I do NOT want them back in LA.

  26. @pplaraz
    We shall see obi-wan, the Raiders shall build a new death star(stadium) in Oakland soon…(lightsaber sound)

  27. Just thought I’d share this since it’s kind of relevant to the Raiders and their future in either the Bay Area or LA. It’s a map created by Facebook of their members fan allegiances (don’t ask me how they invaded all our privacy to do it but I’m sure they’re able to mine our date pretty easily). One thing that is of note is that LA county, Santa Barbara County and Ventura County along with parts of the High Desert and Inland Empire are still “Raiders Territory” according to the fans who live there. The entire Bay Area though as well as the vast majority of the Central Valley are all “Niners Territory” including the entire east bay.

    http://deadspin.com/5979970/?utm_campaign=socialflow_deadspin_twitter&utm_source=deadspin_twitter&utm_medium=socialflow

  28. Even with a potential $20 mil/yr if that brings co ownership in the newly built stadium along with assistance from the nfl fort making thetransition it is fiscally far less risk than la which as a bay area bittern person i wouldn’t mind either way. The raiders belong in Cali and whether its local for me or a south west flight it doesn’t matter much. I think reducing cost is the only viable solution to the franchise bring able to build up to a team reflective of its past.

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