When Subsidized Stadiums Cause Team Values To Soar, Should Public Share In Franchise Value Windfalls? Raiders Value Skyrockets From $1.43 Billion In 2015 to $6.7B In 2024 Thanks To Stadium In Vegas
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By Alan Snel, LVSportsBiz.com Publisher-Writer
The state of Nevada in 2016, when it approved a $750 million stadium subsidy for the NFL Raiders, made Mark Davis an incredibly rich man.
A year earlier in 2015, Forbes business magazine pegged the value of the Oakland Raiders at $1.43 billion. The Raiders’ value was second from the bottom in the 32-team National Football League.
Then only two months ago, Forbes said the Raiders’ value was $6.7 billion, good for seventh in the NFL, trailing only the Dallas Cowboys ($10.1B), Los Angeles Rams ($7.6B), New England Patriots ($7.4B), New York Giants ($7.3B), New York Jets ($6.9B) and San Francisco 49ers ($6.8B).
The Raiders’ bullish team value is built on a stadium that is managed by the NFL team, which garners the vast majority of revenues generated by the domed venue on the west side of Interstate 15 across the highway from Mandalay Bay hotel-casino.
Thanks to the stadium built with a public contribution funded by hotel room taxes, the Raiders make more ticket revenue than any other NFL team.
The Raiders also charged their tenant, the UNLV football team, more than $2 million to play six games in 2022 and the rent was likely similar in 2023.
The Raiders moved into their new stadium in 2020.
And their team value has skyrocketed thanks to the 62,000-seat stadium that was built thanks to Southern Nevada’s public dollars.
While the 2016 state bill authorized $750 million in public money to help pay for the $1.4 billion stadium construction budget (overall stadium project cost just less than $2 billion), Southern Nevada’s 30-year debt service from 2019 to 2048 is $1,354,215,804. Less than $200 million have been paid off, so Southern Nevada is still on the hook for more than $1.1 billion.
It raises a central question: should governments get a chance to receive money from teams and their owners when their public stadium subsidies clearly make the teams so much more valuable?
There’s no doubt Las Vegas needed a stadium to compete with other tourism markets like Los Angeles and Orlando.
But when a community is on the hook to pay $1.3 billion in debt to help build a stadium that has clearly increased the value of a team, should local government get a piece of the financial windfall? It’s clear the financial value of the Raiders soared thanks to stadium construction mostly financed with public dollars.
The Raiders have won two of their six games in 2024. Since 2003, the Raiders have won more games than they have lost in a season only twice (10-7 in 2021 and 12-4 in 2016). The team has not won a postseason game since the 2002 season.
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Davis’ friend, former NFL quarterback Tom Brady, is expected during an NFL owners meeting this week to be approved as a part-owner of the Raiders, media reports say.
After Davis tried to sell a share of the Raiders to Brady as a discounted price, NFL owners balked. But apparently the issue has been resolved. The NFL has also placed access restrictions on Brady as a FOX-TV broadcaster in light of Brady’s role as a potential Raiders part-owner. Other sports stars like Michael Jordan, Alex Rodriguez and Patrick Mahomes owns shares of teams.
Brady already owns a share of the WNBA Las Vegas Aces.
