Vegas Expansion and the Cycle of Greed in Pro Sports

Brian Garland (@Garland_SP)

With the official announcement of the Raiders’ move to a stadium southwest of Las Vegas this past week, the City of Sin will support two professional sports teams after previously supporting none.

So what is this? Are the owners aware that Las Vegas has the least permanent residents of any “major” metropolitan area in the United States? Or maybe they hope for the Raiders and Golden Knights to be a tourist trap for sports fans.

They can’t possibly think otherwise when everyone on Sunday afternoons in Vegas are hung over, off to catch a plane, or both.

In that case, maybe the Carolina Hurricanes should move down to Myrtle Beach once their lease is up, since they’d probably do the same or better than they do right now in Raleigh. Don’t even get me started about the NHL though, they’re like a country that’s trying to feed the world when they still have people starving back home. The NHL still has perennial failures for franchises in Carolina, as I mentioned above, Phoenix, and Florida. See anything in common? Yeah. Warm weather. This fact is not meant to ignore that there are several hockey franchises in warm-weather places that are successful, and these should be considered the dream model for Las Vegas. I’ll go into more detail about that shortly.

The most glaring issue that will decide the success of professional sports in Las Vegas, is how many of all those diehard fans out there in Vegas stumble their their way to a game? Probably very few, even if they’re good, and that’s another big if. For the Raiders, this is a much easier sell only because the team plays one game a week. For the Knights, who would play every other night (I’m serious, no puns intended) in a city where there’s plenty else to do, I can’t imagine the seats being full beyond the first month of games, if that.

As a heads-up for the Golden Knights, new NHL expansion teams don’t do very well in their first season, and you never want to start in the toilet if you want fans to come to your games, because they will lose support with the drop of a hat.

The one definite outcome is that sports gambling will grow all while the NHL and NFL swear up and down that they’re against the gambling industry.

The way I see it, there’s only two outcomes for the Las Vegas hockey experiment:

  • flourish in a warm-weather area by virtue of playing in a big city, like the Los Angeles Kings
  • fail miserably like the Phoenix Coyotes, since they’re horrible and because the owners, then the fans and players, could all care less about the team.

To avoid being another Phoenix or Carolina, more passion and hard work is required of ownership to make the team a success on and off the ice.

From what is known about majority owner Bill Foley II, he’s one to look at dollars and cents more than the standings.

Think I’m kidding? Foley is the founder of Fidelity Financial Services, and ranks 4th in the entire world in compensation for his work as CEO, according to Forbes. That’s six times what Roger Goodell made this year for also being an empty suit. Maybe they should hang out some time.

To make matters worse, the minority owners are the Maloofs, a family that should be banned from Sacramento for nearly destroying the NBA’s Kings during their ownership, and threatening to move the team to Seattle or Kansas City in the final years.

Anywhere in the middle of Los Angeles and Phoenix (yes, Las Vegas is in the middle geographically, but not the point) would still be a disaster for how much money will be spent being a tenant in MGM’s new arena. The Knights got a good deal to move to Vegas, but any changes they’d like to make will have to go through MGM first.

There will be competition between the Raiders and Knights for people’s remaining entertainment money, and Foley recognizes this. Just last week, he came out against the Nevadan government for practically donating hundreds of millions to Davis and the Raiders to move there with full control of their stadium, all while the Knights have to rent out the brand new T-Mobile Arena. That’s quite the first impression to make, Mr. Foley.

You’ll find out in a moment how much Marc Davis and the Raiders had to chip in for the new stadium.

If this wacky Vegas experiment works, it’s inevitable that an NBA expansion team will come to Vegas and share T-Mobile Arena with the Golden Knights. What will team call itself? Let’s just not go there, but it can’t be worse than the New Orleans Pelicans.

What I predict out of the NHL’s latest expansion team nothing short of irrelevancy and failure. For one, there’s not enough permanent residents that care enough about hockey. There were plenty of tests done to prove that there are, in fact, permanent residents in Las Vegas.

Of that bunch, there aren’t many who will have the money and interest to buy season tickets, unless it’s something like the 49ers who have the big whigs from Silicon Valley and San Francisco to thank for buying all the tickets even when fans are now refusing to go.

Last time I checked, Las Vegas isn’t a household name in the business world. If the Knights are lucky though, maybe a few casino owners will show up to games. They’ll quickly turn away when the Knights play poorly, but money is money, right?

Now back to the Las Vegas Raiders. I’ll first say that this move has potential even after Marc Davis gave the finger to every Oakland fan on Monday by making the Raiders play one or more lame duck seasons in the crumbling Oakland Coliseum while the Vegas stadium is built.

If you’ve been scoring at home the past fifteen months, this marks the third time a team has changed places, because football is family. If you think back to when the (San Diego) Chargers and (St. Louis) Rams were jockeying for a stadium to move into Los Angeles, there was a proposal for a stadium a half-hour away in Carson. The Rams won, and ultimately decided on a stadium in Inglewood.

Marc Davis and the Raiders missed out on the move to Los Angeles, but Davis liked the Carson stadium plan so much that the Las Vegas stadium will be built with the exact same model, except with a silver and black dome.

One more thing: there will be a torch in the southern part of the stadium not for the people of Oakland he stepped on, or for our military, but for his pappy Al Davis, the only reason his son is a billionaire despite never working a day in his life. Also, Marc still has a bowl cut and drives a crappy old mini-van. The American Dream, baby.

The Las Vegas experiment will be helped by the fact that Raiders football team is on the rise, so I expect immediate support from their fans when they get there. Unless All-Pro quarterback Derek Carr and linebacker Khalil Mack get abducted by aliens, the Raiders will be among the top of the AFC. With that, the Raiders will have an easier time roping in fans.

I do not expect every fan from Oakland to cast aside their bitter emotions and make the drive south to Vegas, but I’m sure there will be a few who’ll remain loyal even after being told they don’t matter.

As for the Las Vegas Raiders, Marc Davis will turn a profit regardless of how well the Raiders sell. The Vegas stadium will be multi-purpose and massive like Jerry Jones’ Cowboys Stadium, with college bowl games, some college basketball Final Fours, big concerts, high school football games, and so on.

Unlike Jerry World though, the stadium won’t be paid in full by its owner. More on that in a minute.

Regardless of how important all the other events are, the Raiders have been and will be the leading moneymaker for Marc Davis. Despite how ego-inflating NFL ownership is, Marc Davis recognizes that Las Vegas will be a tougher sell than Oakland was.

For tips on how to make relocation work, he can look back in family history. His father, Al Davis, brought success to the city of Oakland after the first Los Angeles NFL experiment failed miserably.

Now, Marc Davis will not have the competition of the Chargers and 49ers to worry about, since they’re a full state away. He also got a great deal from the local government, only having to front less than half (48%) for the stadium after a relocation fee. That’s $1.15 billion of $2.4 billion of the bill for the stadium, with the rest coming from the government and from taxpayers. The final $750 million will be raised through hotel tax that was supposed to be for educating at-risk children, all according to USA Today.

Business is cruel as we know, and this cycle’s gone on over and over again across America’s pro sports leagues. Team owners squeeze their local governments for stadium funding with the constant threat of moving the team until the governments finally cough it up.

Of course, there are economic benefits to submitting to NFL owners’ demands. Nevada’s government is putting the Raiders at the center of a development project southwest of Vegas. The town of Foxboro is thriving from the extra cash for their local restaurants, shops and hotels thanks to the Patriots (the traffic is still a nightmare). The Packers and Lambeau Field transformed the small town of Green Bay into a legitimate tourist destination. And how many people from the big cities will visit to Rutherford, New Jersey if not to catch a football game?

Regardless, there is something horribly wrong when sports owners are able to manipulate local governments they way they do. Their power, influence, and wealth have now allowed them to live above the law.

It is well-documented in history that owners aren’t great at keeping promises. When they don’t get what they want, they are not afraid to exaggerate the circumstances to make them appear in the right in asking for taxpayer money to front a bill they could pay themselves.

And now for some NFL owner history from right here in New England. Robert Kraft is known to have originally intended to move the Patriots to Hartford or down to St. Louis when he bought the team, before he talked himself into replacing Foxboro Stadium with Gillette. He is credited for paying for Gillette and Patriot Place by himself, but that was never his plan when he bought the team. He even admits that Hartford gave him a better deal in the end, but it’s safe to say his Foxboro investment turned out.

Even if Kraft is considered a “good” example of an NFL owner, know that for every Kraft or Stephen Ross, there are three Marc Davises, or Dean Spanoses, or Stan Kroenkes; the owners with no reservations against moving if they are required to pay for a new stadium all on their own dime. They will push and shove and threaten until they get the money they believe they need.

The real problem here isn’t that owners will skip town for extra money, it’s that there will always be a city who takes the bait from these owners, thus ensuring the owner always has leverage.

City and town governments either have to pay hundreds of millions toward a new stadium or risk disappointing their football-crazed citizens, and when one city says no, an even bigger city will say yes.

But when the bigger city says no, a smaller city will offer more to make the differences all work out for the owner. And that is a short summary of the greed cycle in pro sports. There are owners who fail, but it’s not easy for that to happen.

All in all, the NFL, NHL, and other major pro sports leagues are entering dangerous waters with recent expansion and relocation.

The reckless abandon toward the fans that line the owners’ pockets will at some point lead to consequences.

Eventually, fans in smaller cities may no longer provide the blind loyalty and viewership that owners need to turn the enormous profits they’re all looking for.

As a sports fan, I would never actively root for a team or league to financially fail, but it’s hard not to feel disappointed at these past few moves. It’s all about the money, these owners don’t have to keep moving to get it.

The leagues must know now what relocation does to PR, but in the interest of more money, I don’t expect these leagues to crack down on it. That, or how owners are holding governments at gunpoint and literally putting taxpayer dollars into their own pockets.

So yeah, woo hoo, Las Vegas.


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