The Raiders might be one step closer to moving to Los Angeles, especially following the release of the financing plan for a new Oakland stadium. As Matthew Artz of the Bay Area News group writes, the proposed plan is so egregious, it would incentivize a move to another city.
The plan, submitted by businessman Floyd Kephart, would require the Raiders to sell 20-percent of the team to Kephart’s New City Development, LLC for $200MM. The company would subsequently develop the area around the stadium, including the construction of a shopping center, hotels, offices and 4,000 homes.
On top of that, the Raiders (along with money from the NFL and funds from future stadium revenues) would be responsible for financing the $900MM stadium, meaning the Raiders would have to rely on sponsorship revenue and naming rights fees to compensate for the nearly $300MM in potential loans.
As Artz explains, it’s not an easy task for Kephart, who helped rescue the project in 2014 after other developers dropped out. He has to obviously appease the franchise, which is a difficult task considering their interest in Los Angeles. Furthermore, he has to satisfy the local officials who refuse to help pay for a new stadium.
“This is not just the worst stadium proposal I’ve seen,” Marc Ganis, president of the consulting firm SportsCorp Ltd., told Artz. “It’s the worst by far.
“I can’t think of any sports team owner that would take a proposal like this even remotely seriously. It’s so one-sided and so bad, that it’s almost as if local leaders are saying ‘we can’t really do anything, so go ahead and leave.'”
As Robert Boland, a sports business professor at New York University explained, it’s unprecedented for a team to self-fund a stadium, especially when they’re also being required to sell a percentage of the franchise.
“This does create a scenario by which Los Angeles becomes more attractive,” he said.
The City Council is scheduled to discuss the proposal on Tuesday. If it’s ultimately accepted, the city would begin negotiations with the franchise regarding a new stadium, with an eye towards starting construction in 2020.
Raiders ownership has continually said that they’d prefer to stay in Oakland.
“We’ve been working on a stadium in Oakland for the past at least six years, on a very strong basis,” owner Mark Davis told Raiders.com last month. “We definitely want to keep the Raiders in Oakland, if possible, and have made as much as we can trying with the city, the county and the Oakland A’s and the Raiders, trying to work something out, to figure it out, how we can get it done.”