Raiders Stadium Solution In Oakland May Buck National Trend By Going Small
In Dallas, Cowboys owner Jerry Jones built a $1.3 billion stadium designed to be the greatest football venue in the country. In Minneapolis, construction is underway on the "Ice Palace," a domed behemoth with an exterior style that evokes the region's brutal winter landscape.
In Santa Clara, the 49ers opened Levi's Stadium this year with insistence that it was the most technologically advanced stadium in the world. And just 33 miles to the north, the Oakland Raiders are making plans for a new stadium of their own.
But so far, the plans aren't following the NFL's "new normal." Where so many teams are chasing bigger, better, more lavish stadiums -- ones with significant funding from taxpayers, in many cases -- the Raiders are taking a more modest approach.
They want a smaller stadium.
That's assuming the franchise doesn't up and leave for Los Angeles, where developers have plans in place to built a $1.7 billion mega-stadium. The venue could accommodate both the San Diego Chargers as well as the Raiders, giving the L.A. area two NFL teams along with one impressive stadium.
Developers in Carson, California, where land has been acquired to build the stadium, are making an aggressive effort to woo the Raiders and Chargers. In the proposed deal, both franchises would co-own the to-be-named Los Angeles Stadium.
Contrast that with the Raiders' alternative -- and what appears to be its preference -- of building the NFL's smallest stadium, and staying in Oakland. The $800 million price tag is right around what they would pay to own half of a proposed Los Angeles Stadium.
If we're judging off of recent NFL precedent, the L.A. construction would seem to be the favorite. It's large, beautiful, and in a great location that would guarantee high-profile events, including the Super Bowl.
But according to Floyd Kephart, a development executive working to facilitate an agreement on a new Oakland stadium, the lavish trappings offered in Los Angeles aren't at the top of the franchise's list of priorities. He paints owner Mark Davis as someone who is fiercely loyal to the fan base in Oakland and has no interest in moving the team.
That said, the team remains without a deal for a stadium, and the clock is ticking. Kephart said the process is brewing frustration.
"It's all political and bureaucratic," Kephart says. "It has nothing to do with anything that is a negotiating point. That’s what I would tell you from a business perspective."
It's not unusual for an NFL franchise to be at odds with the local government over a new stadium construction. And if that were the case, Los Angeles is perfect collateral. Like the Vikings before them, the Raiders could float a move to L.A. as a likely alternative if its demands aren't met.
But there's a big difference in how those two teams have sought out a new stadium. In Minnesota, Vikings owner Zygi Wilf wanted a huge sum of financial backing from taxpayers. He wanted a grand construction that would serve as a cash cow and attract the Super Bowl.
The Raiders have no such fantasies. Any proposal for a new stadium would be modest. The team intends to draw up schemes for a 55,000-seat stadium, which is smaller than O.Co Coliseum -- in fact, it would be the smallest in the NFL. And Kephart says it isn't asking the city for a dime.
"The deal has always been, no new debt and no public taxes to pay for anything related to either of the sports teams," Kephart says. The Raiders are prepared to provide as much as $500 million for a new stadium. Private financing is expected to cover the rest of the cost.
In other words, the city of Oakland and Alameda County could become the new home for a great revenue-generating venue -- a source of profit for both governments. All that stands in the way is a formal convening of the city and the county, which jointly owns the land where the new property would be built.
So far, neither sides have come to the table. Kephart said that there are new politicians who have recently taken office, including a new mayor in Oakland and a new county commissioner in Alameda. He suggests that both parties are acclimating to one another right now, and that's caused the stadium planning to get placed on the back burner.
Progress toward a formal negotiation process appears to be happening, but it's moving at a turtle's pace. In the meantime, the Raiders have yet to produce formal plans for an Oakland stadium.
With every passing day, possible suitors for the Raiders grow more aggressive about stealing the franchise out of indecisive Oakland. Last week, backers for Los Angeles Stadium filed a ballot initiative to move the Raiders' relocation one step closer to reality. Los Angeles isn't exactly foreign territory: The Raiders called L.A. home from 1982 to 1994, before and after which they played in Oakland.
Some experts suggest that a relocation to the L.A. market also positions the Raiders for a financial bonanza. The larger stadium and invigorated local fan base would drive ticket sales, and modern revenue generating features in the stadium would far exceed what the outdated Oakland-Alameda County Coliseum currently has to offer.
The mere valuation of the Raiders franchise would be poised for a dramatic upward revision. As noted in a a column for
ThePostGame last month, Leigh Steinberg estimates that the Raiders -- currently the NFL's lowest-valued at an appraised $970 million -- would quickly "double their value" by moving back to southern California.
Contrast that with Oakland, where the Raiders had to tarp 10,000 seats in the Coliseum just to bring game attendance closer to capacity -- although it still struggled to sell out home games and avoid TV blackouts. A long streak of losing hasn't helped -- the Raiders have gone 12 seasons without a winning record, and only twice did they win more than five games in a year -- but the franchise doesn't have a lot going for it in Oakland.
Yet the franchise, and in particular owner Mark Davis, seems reluctant to leave Oakland. Kephart insists that there are two reasons why: For one, Davis wants to do everything he can to stay in Oakland.
And second of all, the Los Angeles deal isn't as great as it's being made to seem. Despite some lofty suggestions for how much the Raiders could benefit, Kephart hasn't seen any hard evidence backing up those claims.
"The L.A. market is a very tough market for anything," Kephart says. "For the NFL, it has been a challenging market -- both for the Rams as well as the Raiders.
"I don't think [the financial benefits of a move] are going to outpace what a new stadium in Oakland would do, with a dedicated fan base already in place. Oakland is the brand, to a large degree."
In other words, the glitz and glamour of Los Angeles and its shiny new stadium have done little to tempt the Raiders. Despite the optimistic conversation coming out of southern California, the team seems hopeful it can secure a new stadium deal in Alameda County.
"I'm one of these guys that believes the owner is always making the best decision for his business," Kephart says. "I actually think Mark Davis is making the best business decision to stay in Oakland.
Meanwhile, one of the most impressive stadiums in the world is waiting in the wings as a clear backup option. This hierarchy doesn't fit the recent pattern of recent sports venue constructions in America.
Professional sports franchises have become pretty savvy about using a potential relocation as collateral for building a new stadium on local turf. Los Angeles, meanwhile, has always been the convenient threat looming on the horizon: One of the country's biggest cities, a former pro football city desperate to put itself back on the NFL map.
The Vikings used L.A. to strong-arm Minneapolis and the state of Minnesota into forking over $450 million for its new building. The 49ers followed the money down to Santa Clara -- a traffic-filled drive from San Francisco. Even the proposed Los Angeles Stadium is not located within L.A. proper -- it's located, rather, where developers and private financiers found a good business deal.
Jerry Jones paid for AT&T Stadium out of his own pocket, sure, but that was a vanity project -- an outlier. Most NFL owners are shrewd businessmen that use their sports franchises as vehicles for further business deals.
You can't exactly exempt the Davis family in that group, especially if Kephart is correct that Davis is making the best business decision. Oakland's idea for a smaller, humbler stadium isn't anything less than the best business decision it can make: the price tag is lower, and the smaller stadium will make it easier to sell out home games and avoid local blackouts without lowering ticket prices.
An updated venue would feature better features for generating revenue, including improved vendor opportunities and the attraction of other major events throughout the calendar year. And by continuing to be associated with Oakland, the Raiders brand value is preserved -- an all-important consideration for any professional sports team.
The fact remains that the Raiders won't stay without a new stadium. O.Co Coliseum is worn down and features too low a ceiling on revenue opportunities. Kephart points out that even if the Raiders were to move, he's not sure Los Angeles is the favorite: alternatives like San Antonio or even sharing the Santa Clara stadium with the 49ers -- a move Davis has publicly opposed, but may ultimately prefer over going back to L.A. -- could have better odds of landing the Raiders franchise.
But the Raiders want to stay home, and they're not asking for much: a new, small stadium to replace its 49-year-old home, and at no cost to the city. Communities have been gouged for far worse in the recent past, or have lost professional teams due to their refusal to pony up -- that's the main reason the NBA's Seattle Supersonics now play in Oklahoma City as the Thunder.
Kephart is optimistic that an Oakland deal will eventually happen. The wheels of progress, he said, could start turning as early as this week. But after years of asking the city and county to come together and give the green light, the Raiders are running out of time.
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It also remains to be seen what the city and county want in exchange for approving a new stadium project. Because both sides have yet to come together and reach a consensus, Kephart says the Raiders have no idea what will come out of those meetings.
"That's the whole issue," he says. "We have zero clue what the city or county actually wants or will do, or can do, as it relates to this. That's the reason we're trying to get [the city and county] to lay out an agreement between the two of them. That way you can negotiate whatever it is, so that you're not whiplashed between two parties.
"This [problem] is not new. That's why the frustration exists.
