The Oakland Raiders made a compelling case Monday that their proposed relocation to Las Vegas is back on track, revealing to fellow NFL teams that Bank of America is ready to finance the stadium they hope to build.
Both the Raiders and Bank of America delivered presentations to the NFL's stadium and finance committees at the league's three-day meetings in Palm Beach, Fla. The Raiders' presentation is scheduled to continue Tuesday morning.
The reworked financing plan comes five weeks after casino billionaire Sheldon Adelson, whose family had originally pledged $650 million toward the project, announced that he would "no longer be involved in any facet of the stadium discussion" as the Raiders appeared to be moving forward without him. The next day, investment banking giant Goldman Sachs also backed away from the project.
That appeared to be a major setback for the Raiders, who were hoping to put the proposal to a vote of owners at the annual league meetings in late March. Consequently, the commitment by Bank of America represents a significant comeback both for the Raiders and for the NFL, considering Nevada's Legislature had green-lighted $750 million last fall for the project by way of an increased hotel tax.
While replacing Goldman Sachs was an important step in the process, it would have been more surprising had the Raiders shown up without a plan to keep moving forward.
Under the new plan, that $750 million would be augmented by about $500 million from the Raiders (including a $200-million NFL loan), and Bank of America would provide a construction loan for the rest. According to the Las Vegas Stadium Authority, the estimated cost for the entire project is $1.9 billion, including a $100-million practice facility and $100 million for contingency expenses.
Asked to characterize what it means that Bank of America stepped in so quickly to assume the role as financier, NFL Executive Vice President Eric Grubman, who for years has spearheaded the league's stadium endeavors, said: "I think it represents the fact that the bank already has a relationship with the Raiders, and I think it suggests confidence in the project."
Although Bank of America would provide a credit facility for the total cost of the project, the Raiders would not need to borrow all of it as they generate money from personal-seat licenses, naming rights and the like.
There almost certainly would be a relocation fee assessed by the NFL. That figure has not been determined, however, though it is expected to be significantly less than the Rams and Chargers are paying for their move to Los Angeles. Each of those teams is obligated to pay the league $65 million per year for 10 years, starting in 2019.
If the Raiders receive approval to move ahead from at least 24 of the 32 owners — something that could happen as soon as the end of this month — they believe they could have a new stadium by the 2020 season. Their plan calls for them to play in Oakland for at least the next two seasons.
Sports facility development expert Marc Ganis said "of course there is obvious reluctance" in NFL circles to a third relocation in such a short time span, but there don't appear to be better options for the Raiders.
"You don't move from the sixth-largest market to the 40th if you're a sports league and do cartwheels about it," said Ganis, president and founder of the Chicago-based sports consulting firm SportsCorp. "But there just hasn't been anything put forth by Oakland that's workable. It's the only long-term, viable option in front of the Raiders right now, and it appears the league recognizes that."