Oakland City Council President and At-Large Councilmember Rebecca Kaplan is not happy with Raj Mathai, The Primary News Anchor and Sports Director Emeritus for NBC Bay Area. Mathai, apparently eager to score points in what’s become a sad media battle around the stadium relocation actions of the Oakland Raiders, issued this tweet on February 8th:
Update #2 (what #Raiders were waiting for?) #Oakland City Council Pres @Kaplan4Oakland tells me “if the @Raiders wanted to offer us a huge increased lease payment – much more than we previously discussed – in exchange for dropping the lawsuit, we might be willing to consider it.”
Now, this blogger completely objects to presentation of a complex subject like the Oakland Raiders Lease Extension and Las Vegas Relocation in 280 characters, but that’s what Mr. Mathai tried to do. The result was a complete disaster: many Raiders fans contacted me via tweet, email, comment, and text message under the mistaken idea that the City of Oakland’s lawsuit against the Silver and Black and the NFL could be made to go away with a simple increase in rent.
That the good Mr. Mathai allowed such a tweet to go out demonstrates an unfortunate lack of understanding of the relationship of different aspects of this deal and the overall story.
The reason that a simple increase in payment to, say, $20 million, from the Raiders to the Coliseum Joint Powers Authority (Coliseum JPA) would not satisfy the City of Oakland, is first, the lease and the lease extension are controlled by the Coliseum JPA, which is partly owned by the County of Alameda, which is not involved in the Oakland lawsuit, and second, the estimated value of the $64 million loan payment the City of Oakland gave to the Raiders in 1995, and the payback clock kicked-in in 1996, alone, is now growing to well over $200 million by the year 2036, according to the Coliseum JPA.
That loan, later called a payment that the Raiders were to share with the NFL by the California Supreme Court, was thought of by some City of Oakland and County of Alameda officials as a “non-recourse, not-collectable” loan, but the truth is vastly different.
First, it’s not a loan in the standard sense. Second, it’s payback, as I was personally told by then Assistant City Manager and Raiders Deal Architect Ezra Rapport in 1996 (when I was Economic Adviser to Oakland Mayor Elihu Harris). The “payback” was the Raiders “playing games and causing revenue from sponsorships, concessions and parking to be generated”. Logically, if the Raiders were to leave, those lost revenues would be considered as basis for payback of the loan.
Guess what? The Raiders are working to leave.
At the time, in 1996, the idea that the Raiders would seek relocation again was not even in anyone’s head because the team just came back from Los Angeles and everyone was celebrating, but the way the payment was considered created what we have today: an annual ticking time bomb of money owed by the Raiders that Coliseum JPA financial advisors wrote lacked a way of getting the payment back for the organization. That’s in black and white in the 2016 Coliseum JPA financial report, folks.
It’s a sad representation of years of executive mismanagement that ended when the current executive director, Scott McKibben, was hired. It’s also a sad representation of years of bad media reporting around this subject. Again, the damn financial report has been sitting there on the Oakland Coliseum website, and its not the first one to include the language I mention – all anyone had to do was read the financial reports.
The Possible Level Of Damages Associated With The City Of Oakland Lawsuit Is As Much As $1 Billion
This part on page 6 of the financial report:
“As discussed in Note 4 to the basic financial statements, the Authority has loans receivable from the Oakland Raiders in the amount of $155,562,629 as of June 30, 2016. These loans have increased in the amount of $6,890,325 in fiscal year 2016 and have increased a total of $92,366,439 since the inception of these loans in fiscal year 1996. The Authority has not adopted a methodology for reviewing the collectability of Raiders loans receivable reported in the governmental activities and the major special revenue fund and, accordingly, has not considered the need to provide an allowance for uncollectible amounts. The Authority has not evaluated the recoverability of these loans through the maturity date in fiscal year 2036. Accounting principles generally accepted in the United States of America require that an adequate allowance be provided for uncollectible receivables, which would decrease the assets, net position/fund balance, and the change in net position/fund balance in governmental activities and the major special revenue fund. The amount by which this departure would affect the assets, net position/fund balance, and change in net position/fund balance of the governmental activities and the major special revenue fund has not been determined.”
And if that $200 million is trippled by the court, that’s $600 million. And that doesn’t even include the $207 million present value of game day expenses paid by the Coliseum JPA on behalf of the Raiders, every year for 23 years, leading up to last year, 2018. Tripple that damage claim and we’re looking at $621 million, for that portion of the damages, alone. (Oh, and the idea that the NFL would not have to pay part of that is up to the judge, not the NFL. Why? Because the NFL’s named as being partly at fault for the cause of the damages in the lawsuit.)
Okay, so. Where are we?
In total, we have, let’s see, $600 million for the relocation payment loan, and then $621 million from the 23 years of game day expenses – that equals $1.221 billion in damages.
And that doesn’t even include the total value of Coliseum stadium sponsorships over that 23 year period.
See? Now do you see?
Obviously, $20 million won’t solve the problem. Obviously, Raj didn’t know that, thus his tweet, right? Well, according to Councilmember Kaplan, he did know. This is what Oakland’s Rebecca Kaplan texted to me, today:
“I said no such thing about not going after that amount of money. I told him that I was open to settlement negotiations, and that the amounts we were seeking were in the hundreds of millions. And when he asked if we would drop the lawsuit for a lease I said explicitly of course not. And that we would possibly consider settling the lawsuit for a huge amount of money – which I explained was hundreds of millions. He kept the word huge but left out hundreds of millions and left out that it would be settlement in addition to a lease not dropping it for a lease.”
Here’s the screenshots of the text messages Rebecca and I exchanged, today:
And here’s the screenshots of Rebecca’s text messages she exchanged with Mathai, and before Raj issued the February 8th tweet, presented here, below, with Council President Kaplan’s permission:
Now, at this point, you would ask if I reached out to Raj to ask him about this. My candid answer is no, and I’ll tell you why. When I’ve asked him a question on this type of issue before, I’ve not received a response.
And here, I’m referring to his erroneous tweet that the City of Oakland filed the Raiders lawsuit last fall in November, and that it was for “the name and colors” when in point of fact, nothing had been filed, and the actual lawsuit was not, and is not for the Oakland Raiders “name and colors”, but for monetary damages.
Raj’s response to this, or none, is not my objective; that you, the Oakland Raiders and NFL fan, are now properly informed, is.
UPDATE: Raj Mathai did call me and to “make sure we were on the same page” about the subject.