Raiders gave Kephart and Oakland just enough rope

Last year the Raiders’ stadium funding gap was $400 million.

Today? Still $400 million.

And that may be the undoing of Coliseum City, just as was predicted many times since the start of the process.

BANG’s Matthew Artz got ahold of a letter written by Marc Badain to Floyd Kephart in April. Despite Kephart’s spin, the letter is incredibly damaging. The crux of it is this:

What is not clear is what the Developer, City, and County are willing to contribute. The Raiders’ $500,000,000 contribution leaves a funding gap of at least $400,000,000 required to build a new stadium. Simply put, the “terms required for the Raiders to commit to remaining in Oakland” are a plan that fills that funding gap without stripping revenues from the stadium and preserves the current level of surface parking. We have seen no progress toward understanding what the Developer, City, or County is willing to contribute and have received no proposals. As a result, there are no “terms” for the Raiders to evaluate nor are there “terms” for the Developer to communicate to the City and County.

You may come away from that thinking that the Raiders demands – all revenue, protected parking, capped contribution – are ridiculous, and in a sense you’d be right. The problem is that it is now abundantly clear that Badain and Mark Davis are comparing proposals, and whatever Oakland is putting forth is being compared to what is being offered in Carson. And Oakland so far is offering… nothing specific. Land? Not really anymore. Infrastructure? Depends on how much. Due to circumstance, Oakland has regressed in terms of what it can offer, a point that Eric Grubman famously made in the spring.

Ridiculous or not, Badain has a point that the G-4 loan money is tied to various team and stadium revenue streams. Fans tend to gloss over the reality. G-4 is a loan program, not a grant. With ties to luxury seating and TV money set in stone, any team receiving G-4 funds is naturally going to fight any attempt to repurpose any other stadium revenue for paying for the stadium, especially if the Raiders have their own projections. Thankfully for the Raiders, exploding league revenue has expanded G-4 to the point that a nearly $2 billion mega-stadium is more than merely plausible.

Chances are whatever gets built at the Coliseum won't look like this

Chances are whatever gets built at the Coliseum won’t look like this

Throughout the rest of the letter, Badain offered plenty of examples of how the Raiders have cooperated with the process. They met with developers. They laid out their demands wish list. They met with Kephart, and they continue to meet with Oakland on another track. They haven’t taken the lead on any specific stadium proposal. Then again they haven’t done that with Carson or San Antonio, and they surely won’t be leading the pack on Inglewood. Davis appears to be content to play second fiddle, as long as he gets a good deal for his team. That shouldn’t be too difficult since Davis isn’t going for quite as ostentatious a new home as what Stan Kroenke or Dean Spanos are trying to build. Yet since Davis isn’t driving the bus, he doesn’t get to say much about how nice it should be. FUD is emerging about Davis not being able to afford Carson just as he couldn’t afford to do more in Oakland, but remember, selling a piece of the team is his ace-in-the-hole. In the letter Badain admits that equity in the team is available, but only as a way to bridge the funding gap. Whatever the size of that limited stake, whether 10% or 20%, it’s worth perhaps twice as much in LA as it is in Oakland.

The parking situation also seems to be a nonstarter. It was during the spring that both Davis and Lew Wolff indicated that they wanted to preserve surface parking, even if that means severely curtailing development. Even the final proposal from Kephart does little to address the teams’ parking demands, filling half the space with garages and commercial buildout.

By the end of this project, some $5 million will have been spent on Coliseum City, only to find out that the Raiders’ and A’s stadium goals run counter to the broader planning objectives of Oakland pols. A stadium surrounded by parking is not the kind of high-density, constant-use plan envisioned for the Coliseum. Of course, so far we’ve barely scratched the surface of the other side of the debate: fear of gentrification. With so many bargaining chips taken away over the course of the last several months, how much is left to offer? More importantly, is that enough to get a football stadium deal done? My guess it’s not even close to enough. A ballpark is less expensive and gets used more. It’s getting close to the time when Oakland will need to shift the conversation. They’ve done a good job stalling so far. We can only hope that what remains isn’t scorched earth.

73 thoughts on “Raiders gave Kephart and Oakland just enough rope

  1. How much longer is this going to go on? I think it was 5 or 6 years ago that I saw Davis on TV saying the team needed a new stadium “yesterday.” Today, as the column notes, the funding gap remains at $400 million (and it’s probably going to be more than that.). No agreements in place, no groundbreaking planned, zip. Fortunately for Davis, there’s a brand new stadium he can use 30 miles away. Yes, it’s decked out in red and gold and 49ers logos, but beggars can’t be choosy. Davis can’t get a stadium done on his own in Oakland, which is a problem since Oakland/Alameda County can’t help pay for it, and he expects to piggyback on the Chargers project in Carson, which may not get built. He can keep the Bay Area fan base he professes to adore by moving to Levi’s. Sorry, Mark. It’s the best anybody can do.

    • I need to correct something here. Mark Davis made that statement about needing a stadium “yesterday” after Al had died, so it was probably 3-4 years ago when he said it.

  2. Hey, where’s Floyd? Shouldn’t he have commented about you not having the context by now? Ridiculous interpretation? Bad reporting? You know… some other complete bullshit excuse or blame casting?

  3. What if the Raiders (Davis) sold 10-20% of the team to whatever developers or investors just until they recoup their investment money (with as much money as NFL teams makes these days, shouldn’t take too long ) and then as part of the agreement, they must offer to sell the 10-20% percent back. Then the Raiders can play at the new Cal-Bears stadium while the new Raiders statldium gets built over at the site at where that flea market/old drive in place is down the street from the current Colisuem site. Keeping the parking intact. Wow…. I really need to take less drugs…

  4. Great piece ML. I think a 10-20% equity stake in the Raiders is worth at least double in LA what it’s worth in Oakland, and potentially even more than double, depending upon how the other NFL relocation pieces fall.

    If the Raiders somehow became the only team in LA (even temporarily), with a brand new stadium and surrounding development, they instantly go from bottom-3 in franchise valuation to top five in the NFL.

    The Raiders can contribute $500M just by selling 25% team if they are the only team in LA.

  5. Dear City of Oakland/County of Alameda,

    This charade has gone on too long. You can not afford to keep them and your endless futile efforts to find a way are keeping them in a constant state of limbo. Please admit defeat once and for all so that our teams’ leagues can finally let them decide their own fates.

    Sincerely,
    A fan who just wants an end to the madness.

  6. You know I have this running joke about what I think the Raiders should do, but the more I think about it, on face value it may not be a bad idea…

    The Raiders essentially have two fans bases, NorCal & SoCal. Why don’t they play 4 home games at Levi’s and 4 home games in SoCal? They can unite the “Nation” by becoming the California Raiders and everybody Wins!

    Again not much thought was put into this, not sure if the players, league, logistics, or anything that would make this not plauseable would approve. This was meant to be a joke but if it’s possible, this option should be looked at.

    Ramin
    @OaktownMojo

    • Why not just call them the Orphan Raiders, without a true home to call their own?

    • I think you’re on to something here. As John McKay said about the Bucs, they can’t win at home and they can’t win on the road so what they need to find is a neutral site.

      Maybe this not only solves the Raiders stadium issue, but it helps them actually win.

    • You guys know that this is how the Warriors became the “Golden State” Warriors? In 1971, they announced that they would play home games in both Oakland and San Diego with “0” to occur in San Francisco (I know they were in the Cow Palace at this point which isn’t really SF). As a result, they chnaged their name to the Golden State Warriors instead of the San Francisco Warriors… Any bets on reversing that change if they get their arena built in SF?

      What I am saying is “Golden State Raiders” so so much cooler than “California Raiders” cause… Angels.

      • Jeffery – good point!

        I’m pretty sure the Warriors will go back to SF Warriors if they get their arena built.

        Golden State Radiers sounds pretty good, but hey I’m a Bills fan (thanks to the A’s, long story) so I have no emotional interest in this other than what the Raiders do and how it impacts the A’s.

      • I am a 49er fan. My only interest in where the Raiders play is a) it’d be nice if it is in the Bay Area because I follow them despite my allegiance to the Red and Gold. b) If I had to pick between the Raiders and A’s to stay in the Bay Area… It’s not even a choice.

        I believe that the logical solution is for the Raiders to play in Santa Clara, but the Raiders really screwed that up by not getting involved on day one. For that to happen, they have to accept the 49ers lease terms AND be comfortable playing in a shrine to their intraregion rival. I probably wouldn’t want to do either if I was Mark Davis, so I ain’t hatin.

  7. Davis should do himself and the franchise a favor and stop the dedication to Oakland nonsense. Oakland officials have clearly demonstrated that they are not dedicated to the Raiders. He could lease at Levi’s for a few seasons, and explore building a stadium somewhere else in the east bay while leasing at Levi’s.

  8. I see the Raiders point on all revenues from the stadium should be used to pay off their piece.

    What ticks me off is the 49ers did the same thing except it was for the entire amount of the stadium or a shade under a 1B.

    If the Raiders want to use all proceeds to pay off the loans then take on the entire project or the 900M not for 500M.

    The Raiders want a handout for the last 400M, in Carson they think money will fall from the sky? Especially competing with a 2nd team for revenue?

    This is where the Raiders are disillusioned and are lost.

    If they want to keep all revenues then you gotta pay out for the entire thing not just a piece of it.

    That last 400M can be raised, Kephart is right on that. I could develop a plan for that 400M, but for some reason all these idiots cannot find a way?

    SMH…

    • Yeah… that’s why they have this problem of having soooo many investors beating down their door that they have to beat them off with a stick.

      Nobody wants to risk $400M on the Raiders in Oakland. If the Raiders could get that loan AND thought they could actually pay it off they would have done it YEARS ago.

      The 49ers could do it because their stadium is planted firmly in the midst of the richest region in the entire country.

  9. Honest question, why can’t the Raiders stay at the Coliseum?

    Because of the NFL’s TV contract and the salary cap, they’re profitable and they can’t get out spent by other teams.

    Their attendance has been bad, but that’s largely the fault of putting a horrible product on the field, their bad PSL model, bad feelings over leaving for LA and an image as having a scary/violent fan base. A new stadium doesn’t solve these issues.

    This is no different than any other business. The Raiders are a profitable business that could be more profitable. To be more profitable they need capital to invest in the business. Their owner lacks the capital and the skill to raise the capital. In that case, if Davis doesn’t want to sell but he truly wants to stay in Oakland, what’s so wrong with the status quo?

    • Comparing fan bases, for example, the Raiders drew a full house with that Sunday game against the Cards, the Rams drew only 25K for their home game. The Raiders are having a difficult time getting funding for a new stadium, while St. Louis officials are willing to fund most of the cost for a new Rams stadium there (at taxypayer expense) – go figure.

      • There are a lot of questions about whether Saint Louis can use public funds for this project. It might not happen. Kroenke is not interested, anyway.

    • Raiders are a bad investment. Simply put it. No one wants to be stuck with paying for something to get nothing back in return. That’s bad business. The Raiders can be a profitable busniess if they stuck with what they have, and that’s staying in Oakland in the early 1980’s.

      • “The Raiders can be a profitable busniess”

        This isn’t a can be. The Raiders are a profitable business. Their team value may not be that high compared to other NFL teams, but they make money each year.

  10. @ML- while a ballpark may be less expensive 100% of that expense is expected to be placed on LW ($600M) or roughly about the same amount that the Raiders would need to contribute in Oakland. Not sure why so many folks assume a ballpark is a slam dunk- from my perspective the challenge is the same for the A’s and Oakland. How will LW payoff a $600M investment in Oakland? Revenue streams will not be sufficient- Oakland needs to be willing to provide entitlements/development rights to properties to make this happen (and those development rights will most likely not be at the coliseum site. Oakland will need to have a backbone against affordable housing advocates and other intervenor groups in Oakland to make this happen. Raiders leaving is probably the easiest milestone to accomplish. The real challenge is how to pay for the ballpark using public assets but not public funds.

  11. Perhaps Mr. Kephart can read these comments and respond to this, but I don’t understand Kephart’s response of Grubman’s “Oakland seems to be going backwards” statement. Now that we have seen the letter and we understand the actual context of what Grubman was referring to, it seems as if Kephart’s statement was very childish and was blatantly trying to distract people from the real context of the statement. Did Oakland bring this guy in to be the scapegoat or the PR for the campaign or did they bring him in to actually get something done?

    • Kephart hasn’t cost the city any money, so other than time wasted, I don’t think this has had an effect on the city. If they are just playing out the string with the raiders, then so be it. With the A’s, they know they have nowhere to go, and are boxed in. The city really doesn’t have to do anything until the raiders leave. So, having kephart really hasn’t mattered. I just wish city would just tell the raiders they aren’t renewing their lease. Then it would get interesting.

  12. Tim Kawakami ‏@timkawakami
    Oh and Davis wanted to make one thing clear: “I’m not going to Santa Clara.” (Yes I’m the one who keeps suggesting that’s an option.)

    Tim Kawakami ‏@timkawakami
    Ok I now believe sharing Santa Clara with the 49ers isn’t on the table for the Raiders.

    • Huh, Kawakami is full of shit? Go figure… Like I wrote above, there are two GIGANTIC reasons Davis is right about not going to Santa Clara. The 49ers aren’t saying “come play here for a couple of years.” They are saying, “here are our lease terms if you’d like to use our facility.” The other being, the stadium can’t exactly be cobranded at this point. It’s 49er central. It’d be like the A’s playing in AT&T Park for a decade.

      • It would be cheaper for the Raiders to pay for a neutral “rebranding” of Levi’s than it would be for them to build a new stadium don’t you think?

        Just a thought from the other side of the coin…

      • And the 49ers would allow that why?

      • they wouldn’t.

      • Simple… $$$

        If the NFL leans hard enough and the lease terms are good, why not? It’s all about the bottom-line, right? They built the stadium knowing it could happen… room for 2nd home clubhouse and all.

      • You are living in dreamland. The NFL doesn’t control the 49ers stadium, they can lean all they want. Hell, they HAVE leaned on both the 49ers and Raiders about this very situation all the way back to when the stadium was nothing more than a drawing on a napkin and it got them bupkiss.

      • If it came down to the Raiders have NOWHERE to play, and yes that is very much a possible scenario -unlikely but possible- then the 49ers and Raiders may have no choice in the matter.

        The Raiders are on a year-to-year lease. What happens if the NFL grants LA to Stl and SD (or nobody at all) and the A’s gain 100% site control. Down comes the O.co! Last piece… NFL says “no” to San Antonio and the 49ers’ and Raiders’ owners are locked in a room at NFL headquarters until they reach an agreement.

        Admittedly, not very likely, but still a possibility! I’m sure there are other scenarios that could lead that way too.

        What about this one… NFL says no more Super Bowls at Levi’s unless two teams play there and if so then you get three in the next 15 years. There is a LOT of leverage/persuasion the NFL can wield.

        Or how about the Raiders and the NFL come up with $600M or so to buy 35% (just a number-don’t know the value of it) of Levi’s stadium or a lifetime lease. That’s a number that’s hard to say no to.

      • LOL and I’m not “living in dreamland.” I never said it’s “the solution.” Just a viable option.

      • I meant no offense by “dreamland.” I went and saw Hall and Oates in Berkeley last weekend (I think) and have been listening to them on spotify ever since. Your living in dreamland, baby. You want to run away… I know I do. This stuff keeps getting more and more ridiculous.

  13. Unfortunately this looks like it will play out in the short to medium term as continued quagmire.

    The Raiders have no solution or long term future in Oakland. But in the three team race to L.A., they are likely to lose out to the Rams and Chargers. Inglewood seems to be emerging as the League’s preferred stadium, and Kroenke and Spanos each have more money and more determination to get the L.A. Market than Davis does.

    That may leave the Raiders looking around and flirting with San Antonio, San Diego or other potential homes over the next 5 years or so. And other NFL owners nudging him to sell the team.

    And where does Raiders indecision leave the A’s? In limbo until the Silver and Black eventually leaves town for good.

    • No, it leaves 20 days until the ENA for Coliseum City expires, and Lew Wolff is allowed to *officially* bring forward his A’s stadium proposal.

      You know, the one he’s hinted at not requiring public funding, and even (possibly) buying off the Mount Davis debt?

      • Schaaf is much too astute to boot the Raiders out- I agree with Simon- expect a series of 1 year leases to continue to be signed- what’s the rush? A’s will be in year 2 of a 10 year lease- and we know Oakland excels at the stall game-

  14. Sell the entire coliseum property to Lew Wolfe, have him build his new ballpark next to the existing coliseum, then have him become the landlord to the Raiders in the existing coliseum and let him negotiate with Mark Davis. Mark will then have to poop or get off the pot.

    • what will be interesting is anything the A’s they could be sabotaged by Raider fans who will not be happy that Oakland is not prioritizing their team

      • this is the city of oakland that has always prioritized the raiders over the a’s every time they could since 1995.

        that city of oakland? the city of oakland that doesn’t have the money to spend on a billion dollar venue that is maybe used 10 times during the football season and maybe what 15-20 times a year at the most?

  15. Raiders are not leaving Oakland! Screw Lew!

    • saying that to yourself over and over again doesn’t make it true.

      raiders might as well be booking the moving trucks… they are good as gone.

      And don’t for even a second believe that it guarantees the A’s are staying. They have a 10 year lease and will patiently wait for San Jose to open up.

    • Are u sure about that?!?! That’s not what i heard he he he.

  16. o/t but welts was on csn earlier tonight and talk was regarding the w’s new arena. poole was also on and basically said why are the w’s moving when they sell out and have whom many feel is the best home court advantage in the nba. welts reply? basically that the w’s would like to see their players practice and play at the same location and the need of a new arena to help the w’s succeed on the court. succeed? didn’t the w’s just win an nba title? really are players clamoring to play in the city of frisco over oakland? or are player complaining that they have to travel from downtown oakland’s w’s practice facility to the coliseum to play?

    really just say you wanna move to frisco. this ownership group has been wanting to move to frisco ever since they bought the team. surprised poole didn’t go ask whether they’d change the name from gs to frisco. would’ve been great to see somebody like welts try to answer that question while trying to not piss anybody off.

    • The Warriors’ president – Welts? – basically told Poole everything Poole didn’t want to hear: there is no “Plan C” – Mission Bay is the site; the Warriors spending $10 million to improve their Oakland facilities in recent years does not mean the team is staying in Oakland; and, spending money on the Coliseum arena has been akin to “earrings on a pig.” Ouch!! Poole will probably write another column championing the cause of the Mission Bay alliance or whatever that group is that wants to stop the arena. Welts also noted the Warriors are spending their own money on the arena. (I suppose if Oakland wants to keep the Warriors, paying for an arena for them might do the trick. Good luck with that)

  17. The Coliseum, as beautiful it was, was always a football converted to baseball field too far from the action. When the Raiders moved back it was already 30 year old football stadium with way too much foul territory for baseball. The A’s should have built their own stadium 15 years ago. Instead they have managed to piss all over their city and fanbase. Meanwhile the Giants have completely taken over the east bay & South Bay fan base and sponsorship. What support do the A’s think they have left even with a new ballpark? And by pissing of the Raider Nation… Yeah the A’s will lose the remaining half of their fan base. Why do I blame Lew Wolf, and not Mark Davis?… Because the A’s have ZERO leverage to move anywhere. The only reason why Oakland is an option now, is because of that! All this time they could’ve built the stadium, instead they lost the fan base. Enjoy the ten year lease, because Lew will always try use Oakland as an excuse for his failures. I love the OAKLAND Raiders!

    • And they didn’t try to build one? Remember a guy named Jerry Brown? You know, that mayor who fired a city manager because he wanted to help the A’s build a new stadium?

      Blaming Lew Wolff for this predicament is revisionist history at it’s finest.

      Not saying it’s ALL Moonbeam’s fault, but he sure shares a HUGE part of the blame for this predicament.

      But really, the fault lies in the fact that Oakland can’t afford to be a major league city. That’s really nobody’s fault. It’s just the way it is.

      • Robert Bobb devised a way to get the A’s a downtown ballpark, or at least get a site that worked. And Jerry Brown then fired him. Yep, the A’s decrepit stadium situation is all Lew Wolff’s fault. And you’re right – Oakland can’t afford major league sports unless somebody is willing to donate major league facilities. And that might just happen with the A’s.

  18. Is the “screw Lew” camp making an organized effort to comment on this post or what??? Sure seems like it.

  19. Not sure how a 1.5 Billion Arena in Mission Bay W/O Parking pencils out with lower cost (rental fee) arenas in SJ and Oakland for Concerts, shows, etc…

    • Without a consistent part time tenant the Oracle won’t last. The Izod Center I’m sure is cheaper than the other arenas in the area and it’s going to close.

      SF is one of the few major cities without an arena. Lacob and Gruber won’t have a problem getting other events.

      • And we all know how every major touring act avoids playing Madison Square Garden if they can get the Izod Center for cheaper… oh, wait..

      • wasn’t there some idea of turning oracle into some other attraction? i think somebody mentioned somehow turning it into a movie theater? i don’t know how that could happen or how much it’d cost but i’d like to see that structure kept around and used in some other fashion.

  20. Raiders need to take the existing structure, keep Mt. Davis and replace the rest. You then will have a nicer facility than Levi’s for approximately $600 Million. There goes the funding Gap. Hate to say it but A’s to SJ. Rams and Chargers to Inglewood.

  21. We’re working on creating a home in Los Angeles for the Raiders so that they won’t be a nuisance to the A’s in Oakland anymore. {{-_-}}

    • They will move to Texas and change the name and logos.

      • They might move to Texas, but they certainly won’t change the name and logos. Notwithstanding their attendance woes at home, the Raiders have one of the strongest and most merchandisable brands in the NFL, worldwide. Teams with the history and tradition of the Raiders don’t change their names when they moved unless forced to as part of a Cleveland Browns or Seattle Sonics type legal settlement.

      • Nelson Munz: HAAAA HAAAAA!

  22. What the Raiders won’t admit publicly is that the status quo is the best of bad options for them.

    They don’t have to assume the huge debt and the risk of poor returns that a move to Los Angeles would entail.

    The Coliseum is a stadium that generates enough revenue for them to survive. Let us not forget that Mount Davis has three levels of suites and thousands of club seats built into it.

    Do the Raiders’ premium seating options command the same prices as the premium seating at Levi’s Stadium? Of course not, but they also don’t have the burden of the 49ers’ debt.

    If the Raiders were really hurting for cash, they wouldn’t have closed off the upper deck a couple of years ago.

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