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The NFL approved of the Raiders moving to Las Vegas. The Legislature, last October, agreed to raise $750 million to fund it. Sheldon Adelson, whose idea it was, has backed out of the financial picture. Raiders owner Mark Davis is getting that $600 million as a loan from Bank of America.
But will the new 65,000 seat stadium in Las Vegas be able to generate enough revenue to pay that loan back? And how, exactly, will they do that?
John L. Smith joins us as he does every Tuesday to chat about one of his favorite topics.
“The question is how do you market that venue at a level that it would be profitable. Not just that it would draw an average concert or even an above average concert, it has to be an all-world concert to fill 65,000 seats,” Smith said.
The problem is even when you combine the games for the Raiders and the Rebels there will only be about 14 football games in the stadium. And while there are mega-concerts that will be booked, Smith doubts even big events could fill the arena. Plus, big events, like the Super Bowl, aren't ones you can put on the calendar right now.
“You’re not talking about stuff that you can put in the ledger. You can put that in the future, this is what we’re going to market to in the next ten years. The bottom line is those payments back to the bank come regularly and if the deal was on the square then he’s going to have to do more than sit around and wait for the next season,” Smith said.
There are a lot of questions left to be answered in the stadium deal. The site hasn't been finalized, which means infrastructure questions haven't been decided, and the lease agreement has not be squared away.
However those items get figured out, Smith believes if past dealings between lawmakers and other NFL teams are any indication, politicians will be less likely to stand up to the team as time goes by.
“The team generally gets what it wants. When it’s there with roots growing in the community, you wind up seeing politicians more or less a lot more docile. They find ways to fund so they don’t lose the team. Because now that you’ve tried so hard to get it and you’ve tied so much of your political capital to attracting the team and now to have it go away – is a challenge.”
John L. Smith, contributor