Two weeks ago the Nevada Oversight Committee approved a $750 million taxpayer provided subsidy for a new NFL stadium in order to draw the Raiders away from Oakland. Sheldon Adelson, CEO of the Las Vegas Sands Corporation, is the largest investor in the potential projected. Adelson has said the $750 in public financing is non-negotiable and completely necessary for the relocation to occur.
Then there is the issue of the economic improvements that the Las Vegas Raiders hopeful have claimed will occur. According to Nevada Public Radio (KNPR):
And if the Nevada Legislature and Clark County Commission do seriously grapple with the $750 million question, there are plenty of questions to ask — such as whether the stadium would really generate $530 million annually in economic activity. (“The numbers are absurd on many levels. The average NFL team generates less than $350 million in annual revenue,” says Holy Cross College sports economist Victor Matheson); and whether developers’ projected game attendance numbers are realistic. (“The projections on the anticipated events, attendance, and overnight stays are all beyond the outer limits of wild optimism,” says Jim Nagourney, a former vice president of business of the New York Mets and New York Islanders, and former sports consultant for cities of Anaheim, Baltimore and Chicago.)
NFL Commissioner Roger Goodell said that if the NFL owners approve of the Raiders moving to Las Vegas that he will not stand in the way.
Polls are already out showing that the majority of Las Vegas citizens oppose the public financing of the stadium. The proposal still has to be approved by Nevada’s Governor and go through legislation at the state-level.
The Rams relocated to Los Angeles before the 2016 season. Los Angeles was previously more valuable to the NFL without a NFL stadium than with one. Franchises were able to leverage the threat of relocating to Los Angeles as a way to hold cities hostage. The threat of leaving a city like St. Louis, Minneapolis, San Diego, Indianapolis, or Cincinnati in favor of the second-largest market in the country was all too real. NFL owners were able to squeeze hundreds of millions of taxpayer dollars out of cities to pay for their own teams. The NFL has now propped up Las Vegas as the next city that has greener pastures.
As with many sports and entertainment economic estimates, the $530 million is very optimistic and Jim Nagourney is even more skeptical of attendance numbers. From my own sports business knowledge, Matthew Knight Arena at the University of Oregon has failed to reach financial projections and the costs of the arena have been significantly higher than anticipated. It is also unlikely that many arenas would get approval with reasonable estimates.
It is possible that Las Vegas will be a story during every NFL offseason when a franchise wants a new stadium built in their current city for years to come.