Friday, February 20, 2015

Rooting for the LA Raiders

Editor's Preface: I understand the title of this post is inflammatory to Raiders fans. It is my preference that Oakland retain both teams. However, given the current fact set available, this seems unlikely. When faced with the loss of a franchise, as a baseball fan writing on a baseball blog I choose the A's. Here's hoping there's more than we know.

The Raiders are playing chess with Oakland and Alameda County and the A's seem to be waiting their turn at a different table.

Acknowledging the rich history and passionate fans of the Raiders, they have long had a very impulsive family at the helm in the Davises. Al Davis made some very smart decisions and some poor ones -- bound to happen in a long career. The jury is out on his son Mark, but the news that the team had invested real dollars on land in Carson is a bold move.

One of the main sticking points, according to recent reports, is the current debt owed on the Coliseum -- incurred by the city and county with their "renovation" in advance of the Raiders returning in 1995 -- and control of the Coliseum's land and its surrounding parcels.

Floyd Kephart, the city's point person for "Coliseum City" has been grumbling in the past few days that it's Alameda County that is being uncooperative. From the San Francisco Business Times:

"You can't solve for the unknown when the knowns are holding the unknown answers."

How deliciously Rumsfeld-ian.

The avatar-less horse-investor took to Twitter to stress his point:
So, Are the Raiders Serious?

It's trite, but there is credence to adage, "Put your money where your mouth is." It's also clear that the media-imbalance in the NFL is not going to last. There will be a franchise in Los Angeles in the next five years, probably two. There is simply too much money to be made and financing post Great Recession is far easier than it has been in years.

Consider these advantages of Carson/LA:

1. Shared construction cost with Chargers.
2. No responsibility for old Coliseum debt.
3. Mitigates loss of SoCal portion of fanbase.
4. Bigger population pool to draw from.

Again from the San Francisco Business Times. This is reporter Ron Leuty:

Something must happen with the city-county joint ownership of Coliseum land. Something must happen with the $106 million in debt left from the Coliseum redo that wooed the Raiders back to Oakland from Los Angeles 20 years ago. Kephart says those payments are coming out of the city's and county's general funds to the tune of $20 million-plus per year.

All About the Benjamins (Financing)

As much as it pained pro-Oakland Athletics fans, ownership supposedly had private financing secured for a San Jose stadium. Whether the same lenders would support an Oakland stadium years later is unknown.

The Raiders can't reasonably expect cash-strapped Oakland or Alameda County to contribute any public funds to stadium construction beyond minimal infrastructure improvement, and yet they do.

A July 2013 article detailing stadium plans noted the financing, at that stage, looked like this:

$300M - Raiders (Some reports indicate the team has $400M available.)
$200M - NFL
$300M - Presumably from Public Funds
----------
$800M

And, in a face-palm moment City Councilman and now Vice Mayor Larry Reid took the bait:

Councilman Larry Reid acknowledged that public money would be needed to help cover stadium construction costs and wouldn't rule out supporting it.

Like 'em or loathe 'em, but the Athletics owners have always prided themselves on not planning to use public money for a private facility.

It's conceivable that the Raiders, whose ownership is not as wealthy as the Athletics (mainly thanks to the weight of Gap scion and billionaire John Fisher), is seeking both public funds for a stadium and partial debt forgiveness for the current Coliseum. If so, it is as bold as drafting a "burner" with bad hands based on a quick 40.

It's even more brash, but they likely also want full control and full revenue from any new facility. In this case, the city and county can help pay for a fancy house they don't even have the keys to.

Back to the San Francisco Business Times:

Kephart said Thursday (February 19) that New City (Kephart's development group) and the Raiders are "90 percent" in agreement on a new stadium in Oakland. The sticking point, he said, are "the unknowns" — the land, the debt — that requires the county's input.

And so, a hat-tip might be in order to Scott Haggerty, president of the Alameda County Board of Supervisors who remarked in the Oakland Tribune:

I don't know why people are insinuating that we are not at the table. Just because you are asking questions doesn't mean you are not at the table.

Millions of questions need to be asked before the city and county lay down again and allow the Raiders to fatten themselves on taxpayer dollars.

Bulldoze the A's

Where does all this leave the Athletics?

Well, for starters A's ownership has no interest in working with Kephart and partnering on development of the Coliseum and its surroundings -- meaning they aren't even at the table. The A's enter when the Raiders exit negotiations, and quite possibly the Bay Area.

Kephart is currently financially motivated to close the deal with the Raiders. Remember, this is a San Diego businessman who chairs a financial advisory board and has no emotional ties to any of the teams involved. It's all about the money.

If the Raiders commit, what's next? As has been hinted at in the past, it could be a wrecking ball for the Coliseum in the near future and a much more expansive search for a new home.

An Abusive Relationship

Faced with the prospect of forking over more money to a regional "asset" that actually loses money, Oakland and Alameda County should take a stance that protects taxpayers and actually forces the team to be a net-positive fiscally.

The Raiders extremely generous previous lease illustrated the depths to which the "die-hards" in power cow-towed to the team. From a 2011 New York Times article whose thrust was that a lockout would actually have been positive for the city and county:

...the Raiders pay just $525,000 a year in rent — a fraction of what the nearby San Francisco 49ers pay to play at Candlestick Park — and leave all stadium maintenance and game-day operating costs to the Coliseum public authority.

All in all, it’s a great deal for the Raiders; for Oakland, not so much. The stadium authority does collect some revenue through concession sales and parking receipts, but not nearly enough to cover its costs.

The bottom line is that the Coliseum authority loses money hosting Raiders games. Ms. McClain (then-interim director of the Oakland-Alameda County Coliseum Authority said the board spends about $5 million a year setting up for the team. A big part of that is for reconfiguring the Coliseum for football and baseball during the late-summer months when the A’s and the Raiders share the field.

 All of that is in addition to the $20 million a year that the city is still paying on the bond debt associated with the 1996 stadium expansion.

The team is currently holding out on signing a new lease.

For Oakland and Alameda County, the "prestige" of the Raiders also came with the privilege of paying $34.2M to owner Al Davis in 2003 after he sued, citing misrepresentation of projected attendance figures.

Here's how the team's attorney reacted to the verdict:

"Do we think that there's adequate compensation for damages? No,'' the Raiders' lawyer, Roger Dreyer, told The Associated Press. ''We're disappointed with the verdict. We're disappointed with the numbers.''

Al Davis wanted a billion dollars to compensate him for leaving Los Angeles.

We're the Pawns

A's fans and Raiders fans are pawns in this chess game, easily replaceable. This really is a battle between rich kids -- teams, developers -- playing with fancy toys we happen to be emotionally connected to.

If only it were as simple as nine innings and four quarters.


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