A day after billionaire casino magnate Sheldon Adelson backed out of a deal to help build a stadium for the Oakland Raiders in Las Vegas, the arrangement continued to unravel.
Goldman Sachs, the banking giant the Raiders told NFL owners would finance part of the $1.9-billion proposal even without Adelson’s involvement, pulled away from the project Tuesday.
The arrangement with Goldman Sachs was contingent on Adelson’s partnership with the Raiders in the development, according to a person with direct knowledge of the situation. Without Adelson, the person said, there isn’t any deal.
A second person familiar with the matter who spoke on the condition they not be identified said Goldman Sachs notified officials at Adelson’s Las Vegas Sands Corp. on Tuesday that the bank won’t be involved in the stadium project without the billionaire.
A spokesman for Adelson said he didn’t ask Goldman Sachs to pull out of the deal.
Though NFL owners had been expected to vote at their meeting in March on the Raiders’ relocating to Las Vegas, the chaotic 24 hours cast doubt on the likelihood of bringing the matter to a speedy resolution.
The financing outline had been in place for months: Adelson pledged $650 million toward a 65,000-seat domed stadium, the Raiders planned to contribute $500 million and Nevada’s legislature approved $750 million from an increased hotel tax.
The political fallout Tuesday included a suggestion by Aaron Ford, majority leader in Nevada’s Senate, that public money for the stadium could be diverted for other purposes if the situation isn’t quickly resolved.
“If progress is not made toward financing the stadium project in a timely fashion, we will introduce legislation to create the jobs that were promised and contemplated by stadium construction,” Ford said.
Last week, the Raiders submitted a 117-page proposed lease to the Las Vegas Stadium Authority without Adelson’s knowledge that included the team’s paying $1 a year in rent and didn’t mention the billionaire. The move didn’t go over well. Adelson, who Forbes estimates is worth almost $30 billion, issued a strongly worded statement Monday ending the partnership. The five paragraphs included a promise that he “will no longer be involved in any facet of the stadium discussion.”
A person close to Adelson described the possibility of salvaging the relationship as “unlikely” and “beyond complicated.”
Adelson’s role in the project has been the subject of questions for months.
When the NFL’s stadium and finance committees met in November, according to a person with knowledge of the gathering, the Raiders and Goldman Sachs officials presented a scenario in which they could finance the project without Adelson.
The person close to Adelson said this created a divide between the billionaire and the Raiders.
In recent weeks, however, Adelson and the Raiders appeared to be closing in on an agreement. One of the outstanding issues was the division of revenue from non-football events at the stadium.
But after the same two NFL committees met in January, NFL executives indicated that Adelson wouldn’t be part of the deal and the project could work with financing from Goldman Sachs. And when the Raiders applied to relocate earlier this month, their financial plan didn’t include Adelson.
Some in the NFL are waiting to see if another billionaire will step forward to fill the financing void left by Adelson’s departure in Las Vegas — a city with casino moguls that’s infatuated with professional football.
It’s unclear why the Raiders and Goldman Sachs told owners they didn’t need Adelson for the project to work; there isn’t any agreement for the bank to finance the project without Adelson.
Adelson has business ties to Goldman Sachs beyond the stadium and, as the person familiar with the matter said, “The bankers followed the money and the money wasn’t with the Raiders.”