Raiders ink 1-year lease with options, hire former 49ers CFO MacNeil

The Raiders agreed in principle to a one-year lease at the Coliseum, with the potential for extensions in 2017 and 2018. Specific terms were not revealed at today’s press conference, but the main reveals are that the Raiders will pay more in rent than they had in the most recent lease, and that Larry MacNeil, former 49ers CFO, was hired to work with the City/County/JPA on a new stadium deal. Davis touted MacNeil’s experience in developing Levi’s Stadium.

Towards the end of the press conference, Davis challenged A’s ownership to “commit to Oakland”:

Right now there’s 120 acres. There’s parking, there’s an arena. We like the gameday experience of tailgating on that parking lot. We don’t want to give that up. Now, there’s two teams that play in that Coliseum. One’s the Oakland A’s, one’s the Oakland Raiders. People have not listened when I said I do not mind if there are two stadiums on that site. The A’s stadium would take about 12 acres, the Raiders’ stadium would take about 15-17 acres. That’s fine with me, but I do not want to give up the parking.

If, in fact, the A’s do want to stay in the Coliseum site, they need to commit A.S.A.P. so that we can go ahead and design and take down the Coliseum, provide all the infrastructure necessary to build two new stadiums in Oakland, and two teams will then come back in and play in two new stadiums. What I do not want to do is build a football stadium in the corner of the parking lot while the Coliseum is still standing, and then once we have a brand new stadium we begin to tear down – or build a new baseball stadium – and then tear down the Coliseum, disrupting the ingress, egress, and parking, tailgating experience for Raider fans on gameday. What it’s going to take is for the A’s to make a commitment to Oakland and tell the people what they want to do.”

You mean something like this, Mark?

Two new venues on a slightly larger footprint than the original

Two new venues on a slightly larger footprint than the original

The A’s response did not waver from their ongoing evaluation process:

Let’s, for a moment, follow Davis’s argument all the way through to its hypothetical end. He is right that he’s been consistent about this. For nearly two years he has wanted the Coliseum torn down immediately, to be replaced by either a football stadium on the original footprint, or two venues next to each other. As you can see from my drawing above, it can be done while taking up only slightly more land than the original Coliseum did. There would even be some advantages in that a grand plaza could be built between the two stadia, leading to the arena.

But is it realistic? Let’s consider how this would progress. Assuming that Lew Wolff and John Fisher could be convinced to go along with this plan, the Coliseum would be torn down and the site graded shortly after the end of the Raiders’ 2017 season – let’s call it a year from now, February 2017. From that point new infrastructure would have to be put in place, followed by actual construction. If they started by the summer, the A’s couldn’t move into their new home until the 2020 season because of a very compressed schedule for an early 2019 opening. The Raiders could potentially open in 2019, but consider that 2019 is the projected opening for the Rams’ stadium in Inglewood – and that site is ready to go, demo already completed. For all intents and purposes, both the Raiders and A’s would be out of Oakland for three years – the A’s probably to AT&T Park, the Raiders to Levi’s or somewhere else. Throughout all of this, Davis would have final say on any development on the 120-acre Coliseum site.

Is there anything in Davis’s history or actions that makes anyone believe Davis is the person to make this happen? He has no experience in development or in the kinds of complex legal and business arrangement requires. His sudden ability to rattle off catchphrases like “opportunity cost” like he just rolled out of a basic microeconomics class isn’t impressing anyone. MacNeil is a good hire, but his presence alone isn’t going to convince investors to subsidize a stadium. And Davis’s desire to stick with ingress/egress/parking as his most important issues in Oakland is downright bizarre. Preserving parking has some nobility to it and is a good way to pander to Raiders fans, especially when compared to the mess that is Levi’s Stadium parking. That argument can’t possibly impress the other 31 owners, who have demonstrated repeatedly that they want deals that improve revenue for teams and for the league as a whole. Parking is worth maybe $4 million a year in revenue. Davis has somehow neglected to talk about revenue as a rationale as every other owner seeking a new stadium has done. Raiders ticket prices will be frozen again for 2016, keeping prices and local revenues essentially flat for the several years since he took the reins. And Mt. Davis will remained tarped to boot. If the Raiders’ revenue position is going to improve, the Raiders will have to charge much higher prices at the new stadium, and in the intervening years they’ll have to test out those higher prices on fans at the Coliseum, the same way the Warriors are doing now in preparation for their new arena. Without a major revenue boost, there isn’t even a business case for building a new stadium, even a small one. The $500 million (+$100 million gift) Davis frequently talks about comes from stadium revenues. If he can’t hit the targets in those loan programs he’ll have hell to pay from the other teams’ owners and his own investment group, in large part because he’ll end up bleeding his golden goose (the NFL’s TV contracts) to pay everything off. And we still don’t know how the $300 million funding gap would be filled.

Historically, none of the old multipurpose stadia have been redeveloped in the manner Davis is suggesting. There generally was a sequence with one tenant staying in the old building while another was built next door, then the old one was demolished and replaced. That was a successful model in Pittsburgh, Cincinnati, and Philadelphia. While the Bay Area has the luxury of high quality venues that could host the two Oakland teams in a pinch, you’re also allowing them to take both feet out the door for three years. Either team (or both) could back out of any stadium deal at any time (really, please try to force a team to build a stadium when the city is providing no money for it). The only leverage Oakland has is that the Coliseum still exists and remains functional, allowing MLB and the NFL to maintain its inertia regarding both teams. Without the Coliseum, Oakland is practically a non-entity for pro sports. I’m not sure if the politicians gathered around Davis at the presser believe in Davis’s vision. The presser certainly wasn’t the venue to argue against Davis. The theme of the event was unity, even though all they were talking about was a short lease extension. Well, unless we start to see hard numbers and actual advantages for the A’s and Raiders besides preserving parking, we’re a long way from actual unity.

P.S. – Davis is trying to play some sort of PR game by claiming that the Raiders are “hamstrung” by the A’s lease. That’s only true if the only way to build a stadium is to do it Davis’s way. Otherwise the A’s lease can be terminated with two years’ notice. That’s it. It’s not unreasonable for the A’s to ask for some time to get their affairs in order. Unless you’re Tommy Boy, I guess.

29 thoughts on “Raiders ink 1-year lease with options, hire former 49ers CFO MacNeil

  1. Davis is doing pulling more than his weight and is not the goat – Oakland officials are. Offering to finance $600 mil (67% of the total cost) . towards a $900 mil a new Raiders stadium is a very generous offer by the Raiders. Many cities which host NFL teams typically do the opposite – funding 67% or more of the cost of building a new stadium through public tax dollars, with the team typically contributing only 33% of the cost or even less.

    Also, the A’s are offering to finance 100% of the cost of a new ballpark in Oakland – and Oakland can’t close the deal with these two very generous offers by the Raiders and A’s. That’s P-A-T-H-E-T-IC.

    • Duffer,
      You sound like Davis. You keep being told there is no money from the city, yet complain there is no money from the city. Do you really know how much money $300-400$ mil is? Think about the drag that the current renovation loan payments on mt Davis are, and multiply that by 3. Also, the economy may be good now, but over 30-40 years, there will be many more busts. Why would they get back into something they are waiting desperately to get out under in MT. Davis payment. Residents would riot. Has nothing to do with city. Residents would never allow it. Complain on.

  2. All the news regarding the raiders now, really will revolve around the chargers. Do they get something on the ballot in San diego. Do they not move to LA. This all that really matters. This is the one thing I think the NFL an Jerry Jones misplayed. They didn’t think the chargers would be so pissed off to stay in San Diego. So, they let said the raiders could go to LA if the chargers don’t, never thinking the chargers wouldn’t. Would they still keep raiders out? That may be the rams worst nightmare. Get brand new stadium, and have raiders forced on him, and rule the area with a good team. Kronke knows the chargers don’t matter. If Chargers stay, and Kronke can still keep the raiders out, that’s the real power play.

    The A’s really don’t matter in all of this, because the raiders have no chance of building. It does affect the A’s, if coliseum is the choice, for all the well know reasons.

    Even if the A’s move to a different site, I could see the raiders at o.co, which would be pretty funny. Time for a renovation.

    • Can’t Kroenke just not negotiate with the Chargers or Raiders, and keep his stadium for himself? He’d be losing out on rent/PSL money, but wouldn’t risk oversaturating the market.

      • No. The NFL *very publicly* said that the Inglewood project was approved for at least one team, Chargers getting an extendable 1-year ‘right-of-refusal’ window, which would then go to the Raiders.

        Kroenke cannot shut the door to a second team.

      • OK I’ll rephrase. Can’t Kroenke effectively refuse to negotiate with the Chargers or Raiders, by charging an exorbitant sum for a lease?

      • He’s already agreed to terms with the Chargers, who are taking extra time to try to extort SD. Offering anything significantly worse than those final terms to the Raiders (should the Chargers pass on Inglewood) is bad-faith negotiations.

      • Just so it’s clear, the rent amount in Inglewood?

        ONE DOLLAR

        per year.

        (plus paying off $50M of the $200M NFL G4 loan, but that goes back to the NFL, not Kroenke).

  3. “we are aggressively working with the city of Oakland.” i wonder what that means.

    • “Ah c’mon, gimme the money I need to make this work. Pleeeeaaaaase? I know I said I’d go somewhere else and still would if it’s LA, but c’mon, you can find a spare $300 mill *somewhere*, I mean, if you really *tried*.”

    • It means they are actively talking about sites and what it will take to build a baseball stadium, fund infrastructure necessary, etc.

      You were talking about the A’s, right?

  4. This Coliseum lease extension for the Raiders, as well as the Chargers one year lease extension in San Diego, are all part of the NFL’s effort to help provide leverage for both teams to get new stadium deals done in their respective current markets. The NFL is brilliantly using the second team scenario at Inglewood Stadium as the primary leverage point to help push the negotiatons. As of right now, it’s looking more likely that both the Chargers and San Diego officials are working to narrow their differences on getting a new stadium deal done. As far as the ongoing stadium situation in Oakland is concerned , I don’t see either side willing to compromise to get a new Raider stadium deal done, even with Inglewood still open for a second team. It’s no coincidence that the Oakland Coliseum lease extension includes yearly options thru the 2018 season. This opens the possibility for the Raiders to move to LA in time for the opening of the Inglewood stadium in 2019.

    • The NFL is definitely managed way better than dopey MLB is. Many MLB owners evidently agree with the Giants belief that the Giants would somehow lose attendance to the A’s if the A’s move 40 miles further away from Frisco? (what a whacky concept) Now MLB owners are pressuring the A’s to build a new stadium even though the A’s are limited to building in only two of the 9 counties – give me a break.

  5. What a freakin’ douchebag. Whatever city or other entity that does a deal with this infamously slimy family will get exactly what they deserve. Hopefully, it’s as far away from here as possible.

  6. Davis has shown that his business and negotiating abilities are no match for Wolff and Fisher. He tried to force them into his timeline and was immediately rebuffed. The A’s are smart to play the waiting game and to not get tangled up with Davis.

    If the city can show that a ballpark at HT, and all of the required infrastructure improvements that would go along with it, would be part of a larger plan that would help the businesses at JLS and revitalize it and the lower downtown area, then it might have a chance. If Schaaf can convince the stakeholders in the area to “think big” and that a ballpark can be a catalyst for a larger effort to bring more businesses and jobs into the area, then she may be able to spend more money on improvements for the ballpark than otherwise. She sees an opportunity to make a difference given the recent interest in Oakland. The process required to get there would be lengthy, but Davis’ inability to move forward will mean the Raiders will delay things anyway. If it doesn’t work out, then the A’s will build at the Coliseum, with or without a Raiders stadium.

  7. I think Davis suspects that the A’s are not serious about building a new stadium on the Coliseum site unless the A’s get to develop buildings over part of the current parking lot. I think Davis also suspects that even if the A’s do get development rights to the site, they’ll do an El Cheapo renovation of the Coliseum rather than building anew. I think that Davis is just trying to call the A’s bluff, hoping that Oakland will push the A’s to either leave or commit to a two stadium, non-developed Coliseum site.

  8. Crazy that the guy who has met with with officials from Las Vegas, San Antonio, San Diego and Los Angeles is the one imploring the A’s to “commit” to Oakland…last I heard, the A’s haven’t met with anyone outside of the Bay Area in decades…

    Davis is a hoot. As you said ML, his focus on egress/ingress is shallow and really goes to show that Mark Davis just doesn’t think like the rest of the billionaire’s boys club of NFL owners…Kroenke had his sights set on completely revitalizing the city of Inglewood and building an entirely new West Coast headquarters for the entire league…Davis is worried about preserving a few thousand parking spaces…no wonder Davis got shot down in Carson…

    The lease extension is annoying for A’s fans, but I have a hard time believing it will end up opening up lines of communication or financing options that weren’t there a week or two ago…the Raider’s fate is pretty much entirely in the Charger’s hands..

    That situation is the one to really follow, not empty threats from a cash-poor owner without any real options…

  9. I’m starting to wonder if the NFL will allow the Raiders to move to LA even with the option they gave Davis, provided the Chargers don’t exercise their option to move first.
    These stories coming out about some owners in the league holding a grudge against Al are pretty carious. On top of that it’s reported that some owners are concerned about the Raiders in LA and the “Thug Life, NWA”, they seem to represent with the gangs in LA. It’s a shame Al was such a maverick in so many ways, but in an effort to see nothing but his brand (Raiders team), as tuff, edgy, outlawed, he did nothing when this image began to appeal to the inner city kids of LA in a not so positive manner. He even indorsed the idea when it came to the “Bad Boys”, Detroit Pistons of the NBA, a team that will be remembered by many for the way they marred the game rather than how good they were.
    Its looking increasing the NFL won’t let Mark move anywhere, other than Levis.

    San Antonio: Jones, and Adams.
    San Diego: Will voters there approve anything for the Raiders? Will NFL even allow Davis in this market?
    St. Louis: If the NFL goes back to this market for a third time, do they trust Davis with it?
    Las Vegas: The NFL already has an image problem with young wealth athletes doing stud stuff, no way they let an entire roster call Vegas home.
    London/Mexico City: When the NFL is ready no way they turn these opportunities over to Mark.

  10. Mark Davis’s criteria for a new stadium:

    1. No PSL’s (can’t price the traditional Raider fans out)
    2. Keep it small (don’t want to overbuild for the market)
    3. Keep parking (gotta have that tailgating)
    4. Not too many bells and whistles (whatever that means)

    I know of a stadium that has all these four criteria met, that can be had for ridiculously below-market rent. It’s called the fricking Oakland Coliseum. All of the conditions he’s putting on his hypothetical new stadium makes me wonder why he wants one in the first place.

  11. Oakland should borrow the 300M and have Davis/Raiders pay a 15M a lease payment and there is your new stadium and funding gap solved.

    Do this over 30 years and no one loses money. The Raiders with a new stadium would easily be able to cover that amount year over year. 49ers pay 25M-30M depending on debt service now for Levi’s.

    Of course the Raiders would be on the hook like the 49ers are for any debt service overruns or excess interest payments.

    They should do this for the A’s too and there it is. But Oakland is too damn dumb

  12. Mark Davis knows :

    1. the NFL don’t want him around
    2. can’t go to LA/Inglewood. I will bet that Stan The Man will not allow the raiders to move into his palace even if the chargers stay in SD and other owners will back Stan.
    3. can’t raise ticket prices in Oakland
    4. can’t sell PSL in Oakland
    5. can’t build the new stadium on his own
    6. can’t risk losing the team by taking on debts. Davis certainly can borrow 300-400mils based on his equity but it is too risky. If the PSL don’t sell or sponsors don’t come as expected. he will be forced to sell.

    other than that, everything is fine w/ the raiders.

  13. Has anyone looked at the 2 sports teams that share the same site in Philly… I drive trucks & drive pass the site daily and I often say to myself, why can’t the Raiders & A’s do the same thing? The coliseum has more space than the Philly Site.. I think the A’s are holding up this process purposely. If the city / county wasn’t so desperate for $$$ they could of looked at this project in Philly to better help this situation… Now you have a team committed to playing in that shit hole ( the owner should be ashamed of himself for letting his team play there may I add) for the next ten years which holds up any progress.. The A’s don’t have to build if they don’t want to… Sad to say but I hope the Raiders do move cause the City could careless

    • JayBoogie, don’t forget Pittsburgh, Detroit, Kansas City, Seattle & Cincinnati who, like Philadelphia, have a baseball & football stadium very close to each other or on they same property, too.

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