Raiders’ Fast Start Changes Dynamic Of Evolving Las Vegas Sports Market
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By Alan Snel of LVSportsBiz.com
One week, the Raiders are rolling out an Allegiant Air passenger jet with their logo and colors adorning the aircraft. This week, they invited the media to see how their relationships with local high school football teams are represented by an Allegiant Stadium display showing the football helmets of all 96 high school teams in Nevada.
The NFL team with one of sports’ most powerful brands and iconic logos is methodically planting and growing its roots in a new market that financially helped it to build an indoor football and entertainment palace within walking distance of the Strip.
The Raiders are dominating Las Vegas sports market headlines thanks to two upset wins and a 2-0 start to the NFL season. It’s part of Las Vegas’ always-evolving sports scene that seems to be growing with new teams and constant chatter about the NBA, MLB and MLS sniffing around Las Vegas as a potential host city down the road.
The Vegas Golden Knights, born from scratch and organically created in the desert in 2017, owned this market with a miracle run to the Stanley Cup Finals in 2018 while also helping Las Vegas cope with the Oct. 1, 2017 mass shooting on the Strip.
The Knights assumed a fascinating grip on the local Las Vegas sports market. Typically, NHL teams occupy a lower rung in a major league sports market but the Golden Knights were the sports kings of Las Vegas from their start more than four years ago. They were the first major league team in a market of 2.3 million, which is punching way above its weight class when it comes to sustaining big-time sports from NASCAR and UFC to VGK, Raiders and a PGA event coming up in October.
Even though the Raiders are a popular member club of the NFL, the $16 billion-a-year juggernaut that dwarfs the NHL in revenues and national TV income, no fans attended the Raiders’ games during the team’s inaugural season in Las Vegas in 2020 because of the COVID-19 pandemic.
Now, the dynamic is changing as fans are filling Allegiant Stadium for Raiders games. Raiders coach Jon Gruden has taken notice:
“We moved during a pandemic. We’re building our team and putting our team together, as other teams are, during a pandemic and we had to move from California to Las Vegas. We’re actually making some friends and seeing our fans for the first time, so there’s the natural amount of enthusiasm and excitement and newness, freshness to this whole thing and I think it’s fueling us to a degree.”
Some of the early clues were a smallish Golden Knights fanfest event in downtown Las Vegas last week compared to previous years’ fanfests and the Raiders’ quick 2-0 start with big wins over playoff-caliber teams like the Baltimore Ravens on Monday Night Football at Allegiant Stadium Sept. 13 and the Pittsburgh Steelers on the road six days after the thrilling comeback overtime win over the Ravens.
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The Golden Knights and Raiders followed very divergent routes to Las Vegas. The Golden Knights are an expansion team that were born thanks to an ownership group headed by Bill Foley and the Maloof family, while the Raiders are a team known for their nomadic ways in California that moved from Oakland to Las Vegas because this market contributed a record stadium public subsidy of $750 million for an NFL venue.
The brands are fundamentally different. The Golden Knights were named after Foley’s West Point roots; that is, the sports team at the U.S. Military Academy is known as the Black Knights. While Foley owns a wide variety of businesses ranging from property title insurance operations to California wineries to a Montana cattle ranch and development, Raiders owner Mark Davis’ business is the Raiders, period.
The two brands don’t even have the same home town name. The Golden Knights went with the shortened Vegas, while the Raiders use the Las Vegas moniker.
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A fascinating convergence of the Raiders and Golden Knights worlds will play out Sunday when the Raiders host the Miami Dolphins at Allegiant Stadium at 1 PM and the Golden Knights skate six hours later when they play the San Jose Sharks in a preseason game at T-Mobile Arena about two miles to the north on the other side of Interstate 15.
The Knights have a big head start on the Raiders in terms of the emotional connection between local fan and franchise. The Golden Knights are allowing fans back at practices at their Summerlin training center on Thursday at 10AM, the first time fans can see VGK practices since the pandemic took hold.
Before the COVID-19 pandemic decimated sports in March, April and May of 2020, the Golden Knights were generating impressive game ticket revenues, sponsorships and merchandise sales. In November 2019, Team Marketing Report’s Fan Cost Index said the Golden Knights’ average ticket was $104.36 — fourth highest in the NHL behind Original Six franchises Toronto, New York and Chicago.
The Fan Cost Index, which measures the cost of a family of four to attend major league games, ranked the Vegas Golden Knights only behind New York, Chicago, Toronto and Boston in the family cost to attend a home game.
The VGK average ticket of $104 in 2019 was way above the NHL’s average ticket cost of $75 in 2019, according to Team Market Report’s Fan Cost Index.
Meanwhile, the Las Vegas Raiders topped the NFL Fan Cost Index in 2020 with a cost of $783.86, a change of nearly 75 percent over the costs for a family of four ($492.10 from 2019) when the Raiders played at the Coliseum in Oakland in 2019.
The average Raiders ticket of $153.47 also topped the 32-team NFL.
It’s newsworthy that the average price of tickets for Raiders and Golden Knights home games are among the highest in their respective leagues because the Las Vegas market ranks in the middle of household income:
With the Las Vegas metro area at about 2.3 million and growing, the Las Vegas market will be seeing new sports franchises being added to the mix.
A new Las Vegas expansion team in the National Lacrosse League is starting play at Mandalay Bay’s Michelob Ultra Arena in 2022-23, while a new Indoor Football League team called the Vegas Knight Hawks is scheduled to play in a new arena, the Dollar Loan Center, in Henderson. It’s the same arena where Foley’s Henderson Silver Knights will play in 2022. The Silver Knights’ temporary home is Orleans Arena.
The market already includes the WNBA Las Vegas Aces, owned by Davis; the Las Vegas Aviators, the Triple A affiliate of the Oakland Athletics that plays in an impressive minor league ballpark in Summerlin; and a soccer team, the Las Vegas Lights FC, the affiliate for MLS’ LAFC. The Lights play their home games at downtown’s Cashman Field, but practice in Los Angeles.
It will be interesting to see during this new 2021-22 NHL season whether the Golden Knights can maintain their attendance high bar at T-Mobile Arena, where the NHL team was announcing crowd numbers that were about 105 percent of arena capacity. The Knights finished the 2018-19 season averaging 18,319 fans per game, a stunning number when the home arena’s official NHL game capacity is 17,367.
The X factor in Las Vegas’ growing sports market are the 41 million annual visitors to this tourism-based economy.
It’s a number that can easily romance a potential ownership group into thinking that even if the local population could not support a new major league team, there’s always the constant flow of tourists and out-of-towners who could buy tickets to big league games.
The Raiders are hot. The Golden Knights start their fifth season with a preseason game Sunday. And new teams are on their way.
How long will Las Vegas sustain these teams? Will new teams cannibalize a market that can sustain just so many franchises and events put on by the likes of UFC and NASCAR? We will see during the next few years.
