Raiders exodus is about will not blame

Listening to radio and read the internets today, it was no surprise by mid-afternoon the recriminations came in full force. Denial and pain set in quickly, thanks to advance reports of the pending NFL owners’ approval of the Raiders’ move to Las Vegas. So when it came time to start the anger and bargaining stage (3), no stone was left unturned, no name forgotten. Here’s a partial list of the people to blame for the Raiders’ departure:

  • Mark Davis
  • Libby Schaaf
  • Roger Goodell
  • Jean Quan
  • Floyd Kephart
  • Lew Wolff
  • Al Davis
  • Ron Dellums
  • Larry Reid
  • Scott Haggerty
  • Fazza (Hamdan bin Mohammed Al Maktoum), The Crown Prince of Dubai
  • Sheldon Adelson

Every player in this Coliseum saga wanted out of something. The pols wanted the albatross of Coliseum debt off their necks without giving away valuable Coliseum land or forcing any of the teams out. The A’s, Raiders, and Warriors wanted their own venues, preferably nowhere near one another. All were willing to leave Oakland to get that venue. The placed the City of Oakland and Alameda County in a delicate dance with three lukewarm dance partners. The team with the most freedom, the Warriors, announced their departure as soon as they could. The A’s tried to take a more circuitous route via the back rooms of The Lodge and then the court, failing to overturn the Giants’ territorial rights to the South Bay. The Raiders, whose owner had the least money and leverage, tied itself to city after city before going it alone in Vegas. Patience and persistence prevailed for Davis, as he somehow finagled gap funding from Bank of America, consequently earning the NFL owners’ trust in the process (31-1 vote).

Let’s go back to fall 2013. The A’s were focused on the postseason, while the Raiders were rolling out another bad run under Dennis Allen. In September, Davis came out of nowhere and suggested that his new stadium be built where the existing Coliseum stands. Had the JPA taken that proposal seriously, the plan would have been to demolish the Coliseum and construct a new Raiders stadium in its place, with the potential for a new ballpark down the road. The Raiders would play at Levi’s Stadium for two years. The A’s could play at AT&T Park for some length of time, probably longer than two years. Davis later rationalized the idea as needed to avoid all the construction-related upheaval and the related parking shortage.

The next spring, in 2014, Lew Wolff started lease extension talks with the JPA. Chastened by the legal loss over San Jose and MLB’s desire to get something going in Oakland, Wolff asked for a lengthy term keeping the A’s at the Coliseum until 2024. He also asked for a special set of conditions clearly related to Davis’s own concept: a process to vacate the Coliseum if the Raiders put together a Coliseum redevelopment proposal. Wolff’s notion was that the A’s needed some time to get a ballpark proposal started and wanted to minimize the chance of playing at a temporary venue (remember Cashman Stadium?). So he got language to give the A’s two full baseball seasons before they would be evicted. By this time Wolff was also working on improvements for the team’s new spring training facility, Hohokam Stadium/Fitch Park. The plans included new scoreboards for Hohokam and the Coliseum (buy in bulk!).

Even in 2014 Wolff and Davis were taking different approaches to the getting lease extensions (emphasis mine).

Wolff and Mark Davis are going at this stadium business in different ways. Wolff wants a lease extension, while taking that time to figure out the future either in San Jose or in Oakland. Davis is taking an opposite tack, declaring last year that it was time to stop delaying and get the stadium deal in place before any new lease. That puts the JPA in a very delicate spot. They’re already working with Davis, though he hasn’t been satisfied with the pace or the information he’s getting. Both owners, whether in league or not, are forcing Oakland to make a difficult decision between the two franchises. Both know that it’s incredibly hard to build one stadium, let alone two right next to each other. Public resources are increasingly scarce. Fred Blackwell’s leaving before he can get any blame for this. Smart move on his part.

Fred Blackwell. That guy is chilling at The San Francisco Foundation these days.

The A’s lease was stuck in deliberations for a couple months before approval. Raiders supporters decried it as something that would eventually force the football team out. The two-season exit, the demand for a bona fide football stadium plan and $10 million to secure it, and the length of the lease to 2024 hampered the Raiders’ flexibility. All those things would be reasonable arguments if not for the fact that Davis never formulated a proposal of his own beyond the aforementioned desire to build on the Coliseum’s existing footprint. Instead, he let Coliseum City complete its process without his signature, and the Lott/Fortress plan had virtually no input or involvement from Davis at all. Davis hired former 49ers exec Larry MacNeill as his representative at meetings. The NFL admonished both City proposals for no team or league direct involvement, yet the NFL reportedly never so much as inquired about the Coliseum land nor offered any alternatives.

Easy to blame Mark Davis there, and Lew Wolff if you’re so inclined. What this showed was that Davis’s will to build in Oakland was not strong. Schaaf held firm to her no-public-funds-for-construction stance, which can be interpreted as Schaaf not having the political will to get a stadium project going in Oakland. She’ll take that.

Since 2006, the Coliseum arrangement has been a series of short-term lease extensions for both the A’s and the Raiders, with no major fundamental changes. Oakland’s goal was to stay in the game with each extension, waiting for a great plan to materialize. Maybe they expected one team to change the game by seeking different terms. Turns out that happened in 2013, when Davis admitted he wanted to replace the Coliseum and evict everyone for a couple years. That started a chain of events which eventually brought us here, with Davis getting city he’s wanted since at least 1998.

The A’s get the Coliseum if they want it, and Schaaf may finally be the mayor that gets rid of the albatross. Dave Kaval, you’re up.

Raiders find their sugar daddy in BofA

Actually, Mark Davis was able to get Bank of America (BofA) to bridge the critical funding gap that was vacated weeks ago by both Sheldon Adelson and Goldman Sachs, leaving the Raiders scrambling and the stadium deal on the verge of collapse. No numbers were released, so we don’t know just how much BofA is putting up, but the reaction from around the league indicates that the Raiders got the job done.

Along with you, I’m scratching my head wondering exactly what convinced BofA to sign on with what is effectively a private stadium subsidy. Maybe the parties got extremely creative regarding the revenue streams. BofA already has a big presence in the NFL thanks to its naming rights deal at the Panthers’ stadium in Charlotte, the bank’s hometown.

As for Oakland, Mayor Schaaf’s response was the same old boilerplate, where Oakland’s not going to risk the general fund while claiming it’s “ready to compete.” And as with all previous such statements, they’re falling on deaf ears at the league office. Yes, Davis could blunder this all the way back to Oakland. It’s well within his capabilities. Davis’s work is now done. The decision is no longer in his hands. Yet you have to wonder – considering that he’s got the money lined up without giving up his controlling stake or involving the omnipresent gambling industry in the deal – if Davis has a little Verbal Kint in him.

Davis messes with bull, gets horns

What happens to the would-be lame duck Oakland Raiders?

lvraiders1

The Raiders unceremoniously filed for relocation to Las Vegas last week, a move as predictable as expecting the sun to rise tomorrow. Raiders owner Mark Davis has stayed steadfast in his opinions of Sin City since last year’s Carson stadium plan was rejected. Many questions still exist regarding the plan regarding the financing, potential attendance, and whether the franchise will actually make significantly more money there as opposed to Oakland. While I remain skeptical about the Raiders’ prospects in Vegas, I’ve come around to thinking that ultimately it won’t matter. If the Raiders move, they’ll get a massive subsidy from Clark County. If they come up short, they’ll somehow finagle their way to get another subsidy on top of that. The team can always cook the books in some way to make it look like they’re losing money even if they aren’t, which would start the cycle of getting more public money all over again.

Oakland and Alameda County limited their contributions to cheap land and subsidized infrastructure, and naturally, the NFL is not impressed by this. Yet the NFL has given the city/county several years to come up with some sort of plan that fits within the NFL’s typical stadium-building business model. At this point it’s simply unreasonable to expect the two sides to come to an agreement that is mutually satisfactory, let alone beneficial, within the next two months. While this isn’t a zero-sum game, there is always a winner, and it’s usually the NFL. When the public statements boil down to Oakland saying it has a plan and the NFL saying Oakland doesn’t, there isn’t much common ground.

Should Davis get the necessary 24 owner votes to move, he still plans to play out the next two lease option years at the Coliseum while the Vegas stadium starts construction (which may not happen until 2018). The lease allows for this, a huge mistake on the part of the City/County. Two lame duck years may be propped up by a more competitive Raiders team. They will suffer severe backlash from long-time Oakland Raiders fans. How much? Well, it won’t help that for the first time in twelve years, the Raiders are raising season ticket prices.

raiders-2017

2017 Raiders Season Ticket Prices

Surely, some fans who are location-agnostic will continue to come to games. The Raiders have good information on this so they have to be preparing for the worst. Though honestly, I have no idea what to expect. I’ve had many fans tell they’ll never go again, some who’ve said they’ll appreciate the time they have left with the Raiders, some who won’t go because of the ticket price hikes, and others who’ll continue their traditions of tailgating only or watching on TV. Dean Spanos chose to have the Chargers play in a stadium that currently seats only 27,000 (at least it’s in Carson, right Dean?), smaller than capacities for some two dozen FBS programs (out of 128). The Raiders could face hundreds of weekly references on Empty Seats Galore. It’s a sad way to go out, and probably not what the NFL intended. That rant, and the NFL’s mismanagement of the LA situation, deserves a much longer treatise at a later date.

The A’s have stayed largely quiet on this, other than a bit of shade thrown the Raiders’ direction last year. They just want the NFL to get on with it, though they won’t say that publicly. Yes, the search for the best site in Oakland remains ongoing. Then there’s this.

Sometimes it’s best to simply not say anything until it’s time to do so.

NFL-Oakland in 140 characters

I realize that the last post was 1,200+ words long, so at lunch today I tried to come up with a more succinct version. So here it is. Pardon my French.

You’re welcome.

Lott-Fortress Stadium Term Sheet Approved by Oakland and Alameda County

A long day and night of talking and grandstanding is over. Alameda County’s Board of Supervisors approved the Ronnie Lott-Fortress Investment Group stadium deal framework around lunchtime. It’s a term sheet, so it has some basic details worked out, but not some extremely important ones, such as the approval of the Raiders and owner Mark Davis. Oakland’s City Council approved the same term sheet late Tuesday night. For what it’s worth, the AlCo BoS vote was 3-1-1. City Council voted 7-0-1. The voted and the completion of the term sheet were needed this week in time for the NFL’s owners meetings, which are taking place in Irving, TX. Updates on stadium plans for the Raiders and Chargers are expected.

I figured I should set the table for my readers and followers, so I tweeted the following shortly after the Council vote:

There may be other votes, including an extension of the ENA if the Raiders are resistant to the proposal, or it changes in major or fundamental ways. As for the cryptic acronyms, drop them in the search box at the top right of this page. Then read.

Let’s take a look at how this framework works.

exhibitb

Breakdown of funding sources

Lott-Fortress estimate the stadium’s cost to be $1.3 billion for a 55,000 open-air NFL-compliant stadium. The capacity is lower than the average NFL venue by design; it’s what Mark Davis requested. Fans seem to be comfortable with the capacity as well, as that’s nearly the same capacity as the Coliseum’s football configurations over the last several seasons. Curiously, there haven’t been many questions about how the cost ballooned from $700 million to $1.3 billion in a matter of a few years. Some of that can be explained by the new estimate’s inclusion of infrastructure spending, an item often omitted due to it being a table stakes requirement for cities to cover. Oakland and Alameda County are also throwing in the land via lease or sale. The land has an appraised value of $150 million. Combine that with the $200 million in infrastructure and the total public contribution is projected to be $350 million.

City and County are both touting the claim that the $2oo million in bonds that will have to be issued to cover the infrastructure piece won’t affect either party’s general fund. That’s possible because half of the infrastructure will be paid by taxes backing an EIFD (Enhanced Infrastructure Financing District) bond issue, the rest backed by private bonds. This is essentially the new, limited form of redevelopment that Governor Jerry Brown supported after he dismantled legacy redevelopment agencies in 2011. Restrictions include the inability to use the funds for anything other than actual infrastructure (roads, utilities), so cities can’t raise funds directly for stadium construction. Raised money is also restricted from affecting the general fund, though it’s unclear what would happen if an EIFD defaults on its bonds. It will take some education by pols to explain to constituents how Oakland will be kept safe, especially given the debacle that was Mount Davis.

raiders-stad

A previously released rendering that may or may not look like a future Oakland Raiders stadium

$81 million in debt remains on the stadium, draining city and county coffers every year. Another $100 million remains on Oracle Arena, which will need to be paid off even if/when the Warriors leave for San Francisco. City/County have not factored the debt into the term sheet, so they will continue to pay for it now and into the future. City has been negotiating assuming the debt from the County for years. The Lott-Fortress proposal shifted that a bit, so that the County remains half-ownership of the land but assumes no other risk.

Paying the debt off early would allow Oakland to demolish the existing Coliseum, which sits on a key, central portion of the Coliseum complex.

I don’t know nearly enough about Fortress to comment on them, so I’ll refrain from doing that here. Lott and Fortress say they don’t need an ownership stake to be successful. I can’t see how they can get any kind of good return on a $400 million investment from mostly ancillary revenues. There are no charity cases in the NFL.

Does this move the needle for the league? Not according to stadium/relocation veep Eric Grubman, who threw a bucket of cold water on the proceedings today. Grubman even called the Lott-Fortress proposal a ‘carbon copy’ of last year’s failed Coliseum City plan, which was widely ridiculed in league circles.

Why would Grubman and owners think this way? Because, as I noted previously, what Oakland is offering is table stakes. They aren’t pledging any money towards the construction. They (nor Lott-Fortress) have convinced the Raiders to sign on, though that’s because Davis is committed to Las Vegas, at least until the relocation vote next January or March. Vegas aside, the NFL usually requires a much larger investment from interested cities. The limited risk and exposure that Oakland and Alameda touted in the term sheet is actually a negative for the NFL, whose position is that interested cities prove their worthiness by spending (How else would cities get into such bad stadium deals?). Pro football has kept Oakland in the game in hopes of the City showing the NFL more love. The combination of Oakland’s intransigence and Davis’s recalcitrance makes for a proposal that Grubman characterizes as not a deal at all.

If, as expected, the NFL laughs off the proposal, what will Oakland do next? Will Mayor Libby Schaaf bite the bullet and walk away from the table, or will she rally for Oakland to put together an improved plan that actually includes more public money? At least two Council members (Annie Campbell Washington and Abel Guillen) mentioned that they had many calls and emails asking them to oppose the deal. That sentiment will only grow if more public money is put on the line and the claims of insulation from the general fund become invalid. Vegas has plenty of issues of its own surrounding funding and the potential for Sheldon Adelson to become involved. Deal terms are stronger there thanks to a pledge of $750 million from Clark County.

The Oakland and San Diego questions are not just tests for the incumbent cities. They’re also tests of the NFL itself. In the league insatiable thirst for revenue, it has  demanded king’s ransoms from communities. How much is it willing to upset existing fanbases in Roger Goodell’s never ending quest for the almighty dollar? How much does the NFL value regular fans? If history is any guide, it doesn’t look good for them.

-=-=-

P.S. – The funniest and most surprising moment of the proceedings came during the County Board meeting, when noted Raiders ‘superfan’ Dr. Death spoke during the public comments period. After his plea for support, Supervisor Keith Carson asked Death if he was singling Carson out as a ‘No’ vote and spreading rumors. Death didn’t deny this, and Carson blew up at him, yelling that Death didn’t attempt to call Carson’s office and only assumed Carson was a No. Death left, his manhood squashed. He was right, though, Carson did provide the one No vote. Carson later apologized, perhaps after Death left to return to his home in the Sacramento area. If only I had video of the moment…

P.P.S. – There were no new renderings presented.

P.P.P.S. – From SBJ’s Daniel Kaplan:

Lott-Perry group provide $167 million offer for Coliseum complex

Updated to include poll:

BANG’s David DeBolt reports tonight that the investment group led by Ronnie Lott and Egbert Perry offered to buy the Coliseum complex for $167.3 million. The offer comes during the 90-day MOU between the City of Oakland and the investment group. They would get the Coliseum stadium, arena, the surrounding parking lots, and additional adjacent properties bought by Oakland over the past several years.

081313-notbad

The $167.3 million offer would also retire debt on the Coliseum. There’s still $113 million of debt left at Mount Davis after 2016, making the remainder for the land worth $43 million. Or is it? The arena’s debt after the Warriors leave is still very much in dispute. That figure could be upwards of $88 million even if the Warriors stay through 2019 as they announced earlier in the summer. Lott-Perry’s first pitch looks like a serious lowball, especially if they have to factor in the arena’s debt.

Perhaps this is why we got another update late:

Chances are that the two parties are not exactly close on the sale price, an issue Perry encountered in Phoenix. In that case Maricopa County is looking to sell Chase Field, not so much because of debt (which has been retired), but because of $187 million of deferred maintenance due for the venue. The maintenance costs and revenue generating potential combined to suppress the ballpark’s appraised value, $40-50 million in 2010. That could rise with a reappraisal, though there are no guarantees. Either way, it’s somewhat absurd to think that a large, modern MLB facility could be worth less than the average project cost of a AAA ballpark, such as the one planned for San Antonio.

The City has no reason to sign anything right away since their own property appraisal hasn’t yet been released. They’ll be guided by that document to counter Lott-Perry. Lott-Perry will be under pressure to minimize this particular cost as much as possible, since every dollar spent on land means another dollar that isn’t spent to bridge the gap on the new Raiders stadium, $300-400 million and rising with every day.

NFL relocation heavy Eric Grubman visited Oakland on Sunday and Monday to see how things were progressing. For now there’s little to report. By the end of the MOU period it will be imperative for Oakland to show something substantive that represents all parties, including the so far non-participatory football franchise. As for the A’s, they are under no pressure to make any deals right away, somewhat to the chagrin of MLB commissioner Rob Manfred. At the very least, the process is moving forward.