SBJ/March 6-12, 2017/Leagues and Governing Bodies

Owners will have to decide whether they can entrust new, uncertain market to the Raiders

NFL teams recently received their annual ranking of clubs based on how much each pays into pooled ticket revenue. The league requires clubs to put one-third of ticket sales into a pool, which is shared equally.

Second to last, sources said, is the Oakland Raiders, just a hair ahead of Jacksonville.

“Pathetic” is how one of the sources described the $9 million that the Raiders, which share a major market with the San Francisco 49ers, put into the pool, about a third of what a top contributor puts in. And therein lies a conundrum for owners to consider as they meet this week in Palm Beach, Fla, and later this month in Arizona, on the Raiders’ relocation application to Las Vegas: Does the NFL entrust a new and uncertain market to a club that historically has had trouble marketing and selling?

“If they take all the same business people and go to Las Vegas, I don’t think you will have much different of a result,” said Lou Imbriano, a former chief marketing officer for the New England Patriots and now a managing director with digital agency Tentacle. “The problem isn’t location. It’s marketing.”

The Raiders historically have had trouble marketing and selling in Oakland.
Photo by: GETTY IMAGES


To be fair to the Raiders, who have a reputation for doing little to market and regularly register last in the league in revenue, they sold out last year in the midst of a playoff run and have beefed up their sales staff, a source close to the league said. Chief marketing officer and senior vice president Courtnee Westendorf, who came aboard before the 2015 season, brought experience from Intel, Disney and Apple.

There is little the team can do, this source argued, in an outdated stadium where most of the sponsorship inventory is controlled by the Oakland A’s.

The Raiders have placed tarps on thousands of seats, and if they are selling out but generating modest ticket revenue, it might suggest they are underpricing. The team also for years had trouble selling seats, and had games blacked out locally when the league required sellouts for games to be televised in-market.

Cool to stadium?

    The NFL is cool to the latest offer from Fortress Investments for a new stadium in Oakland.
The city in December gave Fortress the right to try to reach a deal to build a new stadium and develop the adjacent land. The agreement reached at that time is not materially different from one that the fund sent the league late last month, sources said. And that’s a problem for the league, which views Fortress as wishing to reap huge profits at the expense of one of its teams.
    “They do not fill in the blanks on what returns Fortress expects from providing capital,” one source said.
    “They indicate that the A’s might make a decision on a long-term site by the end of 2017,” this source added. “Once they do, they still would play in the existing stadium until a new baseball stadium is completed.”
    The A’s and Raiders now play in the government-owned Oakland-Alameda County Coliseum.
    All that adds up to the league seeing too many unknowns in the proposal, which would have Fortress lend about $800 million for the project.
                                                  — Daniel Kaplan

The Raiders did not reply for comment.

One reason the owners might want to let the Raiders move: If the club’s financial performance improves in a new stadium, more revenue is shared with the other 31 teams (in addition to any relocation fee).

Some owners are hesitant, however, worried about the Raiders as an organization not just because of their financial performance but also in light of the fiery ending to their involvement with casino magnate Sheldon Adelson in Las Vegas, sources said. Adelson had helped shepherd $750 million of public funding through the Nevada Legislature, and committed about $650 million to a new stadium. In January, he angrily withdrew that commitment, claiming the Raiders blindsided him by filing a lease not to his liking.

Goldman Sachs, which had committed to fill in if necessary for Adelson, then withdrew too, apparently spooked by the anger from their top bank client in Sin City. The team is expected to secure alternate financing from U.S. Bank and Bank of America, but some owners worry whether the episode has poisoned the well for the Raiders in a city where Adelson is influential.

Meanwhile, the owners will also need to get comfortable with the Raiders’ plan to play up to three lame-duck seasons in Oakland.

Amy Trask, the team’s former CEO, analogized it to a spouse divorcing but staying in the home of their spurned partner while building a dream house with a new love elsewhere.

“Raiders fans are terrific and will support the team even in those circumstances. It just strikes me as insensitive to assume or expect they will,” she said.

Despite these hurdles, the Raiders are confident they will win approval, sources said. They have even begun letting employees know who will make the cut for relocation to Vegas, the sources said.

That said, the same process occurred in 2015 when the Raiders and San Diego Chargers were sure the owners would give them the go-ahead to relocate to Carson, Calif. Instead, the owners in January 2016 allowed the Rams to relocate to the Los Angeles area.

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