If Raiders go to Vegas, Oakland could win financially
March 27, 2017
Updated: March 27, 2017 6:00am
“We’re barely breaking even now,” said Scott McKibben, executive
director of the Oakland-Alameda County Coliseum Authority, a public arm
of the city and county that owns and manages the Coliseum and Oracle
Arena properties.
“We’re barely breaking even now,” said Scott McKibben,…
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If the Oakland Raiders get the green light this week to move to Las Vegas, the publicly owned Coliseum will lose about $7 million a year in revenue from the NFL team’s lease, food concessions and other moneymakers. But it won’t leave the city and county in a bind. In fact, the loss of the Raiders would probably give the Coliseum Authority a little extra dough.
That’s because game days cost money. Millions.
“We’re barely breaking even now,” said Scott McKibben, executive director of the Oakland-Alameda County Coliseum Authority, a public arm of the city and county that owns and manages the Coliseum and Oracle Arena properties. “Put simply, it’s a bigger loss if they stay and a bigger gain if they go.”
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That projection is based on tallies of the revenues and expenses that come from Raiders games. On the revenue side, the Coliseum Authority is expected to collect about $7 million this coming season from game-day concession stands, parking, any naming rights, club dues, and the team’s rent to use the stadium, which jumped from $900,000 to $3.5 million last year, McKibben said.
“Our goal was to get to break-even after many years of running in the hole,” he said about the lease change.
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On the expense side, the Coliseum Authority incurs game-day costs that include police officers, sheriff’s deputies, private security guards and all the other facility employees.
Field conversion alone — the three or four times a year when the Raiders and A’s share the stadium — costs the Authority a whopping $450,000 for every back-and-forth switch. It’s a 20-hour process that involves uprooting goal posts, repainting yard lines and moving whole sections of seats.
This coming season, total expenses are projected at $8 million.
Taken together, the Coliseum would be looking at an extra $1 million this next season should the Raiders leave, McKibben said.
But any extra funds will quickly evaporate with facility maintenance in the coming years, said Roger Noll, a professor emeritus of economics at Stanford University.
“It’s not true they’re going to have a net saving … unless they want a collapsing stadium that can’t be used for anything,” Noll said. “The costs can’t go to zero unless they want to have a complete disaster.”
Proponents of keeping the Raiders in town say any savings estimates don’t factor in income taxes paid to the state, impacts on the local economy or intangible values — like the happiness fans feel by the Raiders playing in their hometown.
“I don’t know that you could put a price on civic pride,” said Alameda County Supervisor Scott Haggerty, who sits on the Coliseum Authority board. “The Raiders give an identity to the city of Oakland that is priceless.”
Still, Haggerty conceded, Alameda County itself would be better off by about $500,000 next season if the team departed.
“I don’t want the Raiders to leave,” he said. “When the Raiders are doing good and Derek Carr is throwing touchdown passes and they’re beating the Baltimore Ravens, the community feels good.”
Whether the Raiders bid adieu or stay put, Oakland and Alameda County will continue to be on the hook for millions of dollars in stadium bonds that financed the Coliseum face-lift to coax the Raiders back to Oakland from Los Angeles in 1995. The shared debt payments between the two jurisdictions is more than $20 million a year, and the total debt owed stands just shy of $83 million, set to be paid off by 2025.
Mayor Libby Schaaf said the outstanding debt is why she’s taken a hard line on not using public funds for a new facility.
“In the past, the city of Oakland has been subsidizing Raiders games,” she said. “Obviously part of why we’re in the predicament that we’re in as far as the public’s sentiment around contributing to a new stadium is because of the debt that we’re continuing to pay on the last deal.”
The phenomenon of professional sports teams walking away from publicly financed stadiums, leaving taxpayers with burdensome debt, isn’t uncommon. Taxpayers in St. Louis, for instance, are responsible for more than $100 million in debt and maintenance costs after the Rams left for Los Angeles last year.
While a select number of Oakland businesses might feel the team’s absence, the Raiders leaving wouldn’t have a measurable effect on the local economy, experts say.
“The city of Oakland and county of Alameda, economically, won’t even notice that the Raiders have left,” said Rodney Fort, a sports management professor at the University of Michigan. “The history of teams leaving has been no noticeable blip whatsoever in the region’s economic activity.”
Oakland doesn’t benefit much from the current revenue generated by the Coliseum because much of it goes to the players — many of whom don’t live in the city year-round or spend their money in the city, said Victor Matheson, a professor at the College of the Holy Cross in Worcester, Mass., who studies the economics of stadiums, sports and major events.
Fans, on the other hand, are mostly local and would use their dollars elsewhere in the city if the Raiders were to leave, he said.
As it stands, Matheson said, the Coliseum is not generating much local economic activity — and there’s little incentive for doing so.
“You’ve had this stadium there for 40 years, and yet all you have is basically this gigantic walled fortress and a moat of parking lots around it. It’s got to be the worst use of real estate in the Bay Area,” he said. “They want the money spent inside the stadium, not at nearby restaurants or bars.”
Kimberly Veklerov is a San Francisco Chronicle staff writer. Email: kveklerov@sfchronicle.com Twitter: @kveklerov
Article source: http://www.sfchronicle.com/bayarea/article/If-Raiders-go-to-Vegas-Oakland-could-win-11029278.php
