The Oakland Raiders have been working at once to stay in Oakland, but also to be part of a two-team NFL stadium planned for Carson, California. The basic assumption has been that Los Angeles is a more valuable region than the San Francisco Bay Area, and in particular Oakland and the East Bay Area.
But a look at per capita gross metropolitan economic product, as well as a specific private stadium proposal in Oakland and at the Coliseum, reveals the Raiders would be worth $3 billion if they stayed in Oakland under the scenario you are about to see.
The information is important, considering the NFL process for allowing the Raiders to leave Oakland, as stated in its franchise relocation policy. The Raiders are required to offer a “statement of reasons” for wanting to leave Oakland. It appears that one of those reasons would have to be listed as “desire to be in a region where it would be worth less than in Oakland.” That, coupled with any negative representations of Raider Nation in Oakland and in Northern California would be a public relations disaster.
It’s also important because the parties working on the NFL Carson project in LA don’t have a fiscal picture that’s that attractive to the Raiders – the team would be sharing a stadium with the San Diego Chargers, that and considering the rather substandard number of luxury suites proposed gives us a scenario where the Raiders down there in LA would only have half ownership of a $1.7 billion stadium and that would come to $850 million.
Moreover, the Carson location is part of a metropolitan area that is ranked 17th in per capita gross metropolitan product, where San Francisco and San Jose are ranked number 3 and number 1, and Oakland (which was not part of the Bloomberg survey) sits in between them. That means the Bay Area has more spending money than the LA basin and by a wide margin.
Looking At The Stadium Numbers
Since the Raiders don’t own the Oakland Coliseum, and are worth $1.45 billion, we can conservatively add that to the LA stadium value and come to this figure: $2.3 billion.
By contrast, in Oakland, the stadium plan concept that Oakland Raiders Owner Mark Davis asked me to come up with adds up to significant gains for the Silver and Black. The stadium, as well as a stadium for the Oakland A’s, would be paid for via an industrial development lease revenue bond issue structure. That means no public subsidy or bond default backing by the government.
The new stadium itself is at $900 million in Oakland, so the Raiders are already $50 million ahead in Oakland. The Raiders wing of the hotel is part owned by the team, and so that portion comes in at about $80 million. That base of property pushes the Raiders up by $980 million – and that does not even take in expected revenue streams. Right there, when we add in the base of $1.45 billion, that is $2.43 billion.
The overall expected 40 year revenue stream to the Raiders in Oakland is $2.8 billion and that is from the stadium, alone and does not include NFL revenue sources or team sponsorship or merchandise sales. But the spreadsheet number comes to $69 million annually. Add that to the $2.43 billion and we have $3.12 billion.
So the question remains: if the Raiders are considering a move out of Oakland and to a situation where they are sharing a stadium, it’s clear staying in Oakland and using some deal structure close to what I have come up with is better.
It also damages any “statement of reasons” the Raiders would give in a relocation filing. In fact, it would make them look, well, you know.