Stadium Economics: Why The Oakland Raiders Have Failed At The Coliseum
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Stadium Economics: Why The Oakland Raiders Have Failed At The Coliseum

At first, I ignored what was a factually incorrect blog post that purported to know something of stadium economics and then tried to explain why the Oakland Raiders didn’t do as well financially as it could have at the Oakland Coliseum – using cherry picked ideas not based in the truth. But after some reflection, I decided to write this post refuting its many wrongheaded claims.

First, unlike the author, when the plan for the return of the Oakland Raiders to Oakland from Los Angeles was proposed, I was the economic development columnist for The Montclarion in Oakland, and that was from 1993 to 1996. Second, then-Oakland Tribune Columnist Monte Poole said that I broke the story on the return of the Raiders to Oakland. Third, on December of 1995, I was hired to be the economic advisor to Oakland Mayor Elihu Harris, and given advisory responsibility from, as Mayor Harris put it, “redevelopment to The Raiders.”

There was good reason for that: my undergraduate and masters degrees were in urban planning from The University of Texas at Arlington and the University of California at Berkeley. My first planning intern job was with the City of Ft. Worth, Texas in 1984 under Joe Pobiner. My second planning intern job was with the City of Dallas under Pia Perrera. I then went to Berkeley, and had as my summer job an internship with the Oakland Office of Economic Development, and in the annex building located where the Elihu M. Harris State Building is located today at 1515 Clay Street.

My first job out of Berkeley’s Planning School was with the same Oakland Redevelopment Agency as intern. While my direct boss was Jeff Chew and Austin Penny in economic development, it was well-known that I really worked for Oakland Assistant City Manager Ezra Rapport, who would later be the architect of the so-called “Raiders Deal”. That was September 7th of 1987, my first day on the job was that date.

While there, I created a spreadsheet-based computer model called ‘The Area Redevelopment Economic Model’ – it was used to make the revenue and expense and tax increment financing estimates for what became the Coliseum Redevelopment Area, of which the Oakland Coliseum is at its center.

I also wrote a memo that projected the tax revenue from a combination “big box” retail, office, and hotel complex at what’s called the ‘elbow’ that mates West Oakland and Emeryville, and is formed by I-580 and I-80. That was to thwart a plan by the East Bay Municipal Utility District to build a wet weather storage facility there. Today’s Emeryville Home Depot and Best Buy and other developments in the ‘elbow’ would not be there were it not for my memo that was requested by Mr. Rapport.

For Elihu, and from 1996 to 1998, my job was to know the Raiders Agreements like the back of my hand and watch what the team did from a compliance perspective. From 1999 to 2001, I was the head of Oakland’s 2005 Super Bowl Bid effort. On top of that, I was on Oakland Mayor Ron Dellums Sports and Entertainment Task Force, and have advised, to some degree, every Oakland Coliseum JPA executive director since the beginning. I can fairly say the author of the blog post can’t at all match my level of experience.

The Raiders Advocated The Personal Seat License-Based Oakland Coliseum Stadium Plan

First, there seems to be some idea that the personal seat license plan used for the renovation of the Coliseum was in some way forced on the Raiders. It was not. Marc Ganis, then and now a sports stadium consultant at his own firm called SportsCorp, was a friend to the Raiders organization and created the PSL concept.

This is an important point, in so much as Al Davis backed the idea of having fans purchase rights to buy season tickets. The PSL idea was first employed in Charlotte; Marc Ganis was consultant to the City of Oakland, Alameda County, and the Oakland Raiders on the Raiders deal from 1994 to 1996.

Second, the original 1993 plan for the new Oakland Coliseum called for a concept that would have cost Oakland and Alameda County over $800 million to implement. The cost was so great that it sparked public outrage, and so the City of Oakland went back to the drawing board – that was when the Ganis plan came into the spotlight, thanks to the Raiders and the NFL and the Charlotte experience. The claim was that the PSL concept would allow the Oakland Raiders return to be paid for by the fans of the team, and not the taxpayers.

The Oakland Raiders wanted out of Los Angeles, and for the specific reason that the LA Coliseum Commission, seemingly convinced the Raiders were there to stay, dragged their collective feet on installing the luxury boxes Mr. Davis wanted – moreover, the anticipated pay-per-view plan never materialized.

Feeling double-crossed after moving his organization from Oakland for the promise of a better financial life in LA, and watching his beloved Raiders perform less well than expected over time, Al Davis sought to come back to Oakland, and that effort started in secret in late 1992.

The Raiders returned to Oakland in 1995, and with the approval of an Oakland City Council and Alameda County Board of Supervisors that was without a market study to determine if the PSL concept would work as they were told it would. It was widely assumed that hunger for the Raiders brand was so great that the proposed price points would not be a problem for fans to pay for. Indeed, initial deposits confirmed that belief – but when the bill came due, reality hit.

We, that is the City of Oakland I worked for, with the County of Alameda, needed $83.6 million worth of PSLs to be sold for the bond issue’s initial debt hurdle rate to be cleared. Instead, what happened was that a large number of credit cards (about 10 percent of the total from a perspective of requests) were ran and came up declined; the end result was that we only sold $56.9 million worth of PSLs – far short of the mark.

I recall asking then Oakland Assistant City Manager Ezra Rapport to see the spreadsheet showing what a bad scenario would look like; he refused to show it. That was February of 1995 and just before the news came that the Raiders were, indeed, coming back to Oakland.

Only a few, including Al Davis and Raiders CEO and team chief negotiator Amy Trask, knew the full risk the implementation of the stadium fiscal model that included the PSLs had, but since the debt would fall to the City and the County, there was little concern on their part to second-guess it. The Raiders believed Ezra’s claims of ticket sales, as did many others. I recall then-Oakland District 3 Councilmember Natalie Bayton saying to Rapport during the pivotal meeting that approved the Raiders return to Oakland “If this doesn’t work, I’m going to roll your head down Broadway.”

Everyone wanted the Raiders back in Oakland – it was a dream becoming reality.

The initial deal that was created, and negotiated by the Raiders with the City of Oakland and Alameda County, had the Silver and Black owning 51 percent of the Coliseum, effectively making it privately owned and sticking the Raiders with a property tax – that would have went to the city’s redevelopment coffers, except that it was waved. But in 1996, when the PSL sales were less than needed, the responsibility of paying the bond debt was shifted to the City of Oakland and the County of Alameda.

At that point, then Oakland Council President Ignacio De La Fuente, who’s political power was second only to Mayor Harris, called for the Oakland Coliseum JPA agreement to be restructured, as well as the Raiders Master Lease Agreement, saying “It’s our money now,” referring to the debt issue created by the disappointing PSL sales. The Oakland Coliseum JPA was at first just the City Manager and City Administrator meeting quarterly – Ignacio and Ezra got together and changed it so that it was an eight member board of four city and county and four appointees, and what was supposed to be a 20-member advisory board – a provision never implemented.

Also, the PSLs were to have a 15-year remarketing, after which Raiders season ticket holders would be able to buy PSLs again. Oakland Raiders CEO Amy Trask balked at this (as PSLs were supposed to be for life) and worked to get a provision in that made the PSLs lifetime – thus closing out another avenue for future revenues to cover the bond debt the City and County held.

Overall, the Raiders were still sitting pretty: they were back in Oakland and at a brand new headquarters in Alameda, California, bought for them by the Oakland and Alameda County taxpayers. The once-for-baseball Oakland Coliseum was altered to be a true dual use stadium, but there was one giant problem.

As I informed then-Oakland Councilmember, and now Alameda County Supervisor Nate Miley, and the City of Oakland’s Community and Economic Development Committee in September of 1996 (and which Miley remembers to this day), I warned the City Council that while we brought back the Raiders to Oakland, we did not make the stadium state of the art.

What I pointed to was the then-growing revolution in stadium design sparked by the completion of Camden Yards in Baltimore in 1993. Camden Yards was unique in that it was for baseball only and not a multi-purpose stadium. The popularity of the single-tenant stadium, with its rich advantages for corporate sponsorship, immediately put the multi-use, two tenant, Oakland Coliseum into a second-class category. I said we needed to work on a stadium for the A’s; Councilmember Miley blasted me saying “We just spent $220 million on the Raiders, and you mean we have to spend more?”

Many needed improvement that were expected to be in the new Oakland Coliseum Stadium, could not be afforded by either JPA or Raiders in the end – and the Raiders did not ask the NFL to help pay for, any stadium improvements to help the government.

For example, the “final” plan called for a giant rail system that would allow the East Side seats to be rolled out and in for football and then for baseball – the ultimate price tag for that bit of tech coolness was too great for the City and the County, and so it was taken out in 1995.

By late 1996 and into 1997, and seeking to save face, the Raiders first accused the City and County of mismanaging the ticket sales effort it advocated for and wanted them to control, said the City and County promised sellouts of games, violated the master lease agreement by bad-mouthing the deal on national television on NFL on NBC (I informed Mayor Harris of this), and then blocked what would have been a lucrative Coliseum naming rights deal with UMAX of Japan that the Raiders would have gotten part of the revenue from, but did not want to pay Oakland Football Marketing Association (OFMA) Sales Associate Lynn Longmire the 10 percent of the $19 million deal she would be rightfully owed if the deal were consummated. (In fact, my friend, then Interim City Manager Kofi Bonner said “The Raiders should pay Lynn” because Trask had fought for the team to take on the OFMA ticket sales work from the City and the County that year.

(Eventually, the Oakland Raiders would win the lawsuit in 2006, and be owned $34.9 million in damages for being promised season ticket sales that did not meet up to expectations.

And to make matters worse, that same that year, Trask wrote a letter to us, that got to my desk, and I read as Amy asking for adjustments in the lease. But Amy used a term such that Coliseum JPA lawyer and new executive director Deena McClain interpreted it as the Raiders attempting to move back to Los Angeles, and so, against my wishes and with then City Attorney Jayne Williams, fired what was called a “first-strike” lawsuit. The Raiders also went lawsuit-happy and fired at the NFL – and eventually lost in a completely silly claim that the league “forced” the team back to Oakland. That flew in the face of Al Davis own statements that returning to Oakland would, he hoped, restore the winning tradition of the Raiders.

During this time, the Coliseum JPA worked to make sure the Raiders were treated as start tenants along with the Oakland A’s – a hard balancing act made harder by the A’s Owners own flirtations with moving the baseball team to Sacramento. In 1996, under the new agreement, the Raiders were given by the Coliseum JPA a reduction in loan interest payments, saving the team $109 million.

A’s Owners Ken Hoffman and Stephen Schott were not happy about what they perceived as a loss of a baseball atmostphere to bring in the Raiders, and started open saber-rattling of their own. However, their lease agreement called for the team to stay in Oakland – and so as they tried to sell the team, I was the contact person for the Mayor’s Office who talked to, and helped find, potential buyers of the team – but that’s long another story.

What has to be considered from 1996 to 2006, is the Raiders overall decline in won-loss record, and the organization’s then-allergic reaction to the pursue of local corporate sponsors as separate from team performance. Under Mr. Davis, the Oakland Raiders believed that on the field performance would draw corporate sponsors, rather than have a large scale effort to go out and get them. So, after the Raiders run of AFC West Championships in 2000 through 2002, which included the Super Bowl in San Diego in 2003, the Raiders took a deep performance decline in 2003 and did not recover for years, until 2016.

The Raiders “then-allergic reaction to the pursue of local corporate sponsors” resulted in the following: no radio or TV commercials to sell the team’s upcoming seasons, and questionable deals including one with an airline that didn’t even fly in the domestic United States. And over this time, the Raiders never once tried to secure a deal with a tech company in the San Francisco Bay Area.

By 2006, the Raiders finally received revenue from a then-newly adjusted Oakland Coliseum master lease agreement, that included money from naming rights given to the MacAfee online security company. Since the deal was only about 55 percent of the UMAX deal, it was less that the Raiders would have gotten had they approved the 1997 deal.

The Raiders have never tried to employ the Oakland Coliseum as the backdrop for any special event that would, say, serve to showcase new products from the SF Bay Area Tech Community. The Raiders have never, not once, held a ‘tech day’ at the Coliseum. The organization has turned a blind eye to tech, and thus can’t claim the City and County were entirely to blame for their problems. For those who point to the 2006 legal win, they must remember that referred to actions done before the Raiders came back to Oakland; after the team came back is my focus, and my assertion from personal experience that the organization was simply first lost in how to fit the tech community in as corporate sponsors, and second, had an owner who didn’t want to spend a good amount of cash to set up a good corporate sponsorship sales effort.

That corporate sponsorship problem existed as recently as 2014:

Overall, and since their return to Oakland, the Raiders have spent more money on lawsuits than on staffing up to get corporate sponsors, taking the City of Oakland, the County of Alameda, and even the NFL to court. While the City and the County may have had a person in Mr. Rapport that gave the team a rosy scenario, that was before they came back to Oakland – the Raiders have to answer for how they were managed off the field and with respect to poor corporate sponsorships after coming back to Oakland.

For the Oakland Raiders to not have a single tech sponsorship to show for all of their years in Oakland is shameful. For anyone to assume the Oakland Raiders will do better in Las Vegas just because it’s not Oakland is completely baseless. For someone to write a blog post on Oakland Raiders “stadium economics” and not be aware of this fact is horrible.

The Raiders are to blame for their stadium financial problems in Oakland. It’s time to accept that.

Stay tuned.

Zennie Abraham
Zennie Abraham | Zennie Abraham or "Zennie62" is the founder of Zennie62Media which consists of zennie62blog.com and a multimedia blog news aggregator and video network, and 78-blog network, with social media and content development services and consulting. Zennie is a pioneer video blogger, YouTube Partner, social media practitioner, game developer, and pundit. Note: news aggregator content does not reflect the personal views of Mr. Abraham.
https://www.zennie62blog.com

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