49ers Legal Loss, Higher Rent At Levi’s Stadium, Doesn’t Change Oakland Raiders Coliseum Lease Options

49ers Legal Loss, Higher Rent At Levi's Stadium, Don't Change Oakland Raiders Coliseum Lease Options49ers Legal Loss, Higher Rent At Levi's Stadium, Don't Change Oakland Raiders Coliseum Lease Options
(Last Updated On: August 14, 2018)

The San Francisco 49ers lost a legal battle to the City of Santa Clara and the Santa Clark Stadium Authority last week, as an arbitrator ruled in Santa Clara’s favor. Now, the SF 49ers pay higher rent to the Santa Clara Stadium Authority, to the tune of $262,000 more. That the Niners have sought a rent reduction of $4.25 millon annually, or from $24.5 million to $20.25 million is a signal that they’re not doing as well financially as they’d like to.

Thus, it’s logical to think the Oakland Raiders would be the perfect answer to the 49ers stadium cost problems, right? Especially considering the Raiders have not signed the Oakland Coliseum Lease Extension offered by the Oakland-Alameda County Coliseum Joint Powers Authority , right? And especially considering the City of Oakland’s poised to sue the Raiders and the NFL, right?

Well, let’s think about that.

The San Francisco 49ers lease with the Santa Clara Stadium Authority is such that the Authority can further adjust upward rent and fees if the Raiders move to Levi Stadium. While, as 49ers CEO Jed York said, such talk is completely preliminary “because their preference is to stay at the Coliseum,” such a deal may result in the Raiders being offered a rent of $14 million, or a total of $28 million for 2019 and 2020, but the cost to be at Levi Stadium does not stop there. Former Raiders CEO Amy Trask’s recent media comments made it look like Levi’s Stadium would be an affordable option for the Silver and Black, but the reality of looking at the numbers tells another story.

The Raiders paid $3.25 million in rent to the Oakland-Alameda County Coliseum Joint Powers Authority in 2017. With that, the Coliseum JPA still posted a loss of approximately $1.7 million, and for two big reasons: the Coliseum JPA pays an annual stadium operations cost related to Raiders games of $9 million, and most of that expense is related to security (a deal all but unheard of in the NFL). Even if the $9 million operations cost was added to what the Raiders paid in rent in Oakland last year, that $12.25 million would still be less than what the team most likely would have to pay the Santa Clara County Stadium Authority to play at Levi’s Stadium – and that’s just the base rent, not any additional fees.

“But, the lease extension is supposed to be more expensive for the Raiders at the Coliseum,” you say? Well, consider that if they signed the Coliseum Lease extenstion the Raiders would still not get stuck with paying the $9 million Coliseum Raiders game-day stadium operations cost, and the Coliseum JPA would come out making a profit of around $2 million. On the whole, the Raiders would come out paying about $7 million in rent for 2019, which is still about 50 percent less than they would pay at Levi’s Stadium for that year, alone.

Any claim of additional luxury suite revenue would be wishful thinking: the Bay Area and Raiders fans market would be asked to cough up money to see the team in a stadium not of their own design, and which would lack the nostalgic feel of the Oakland Coliseum. Additionally, it would be a real head-scratcher for the Raiders to bring back a symbol of Raiders past success in Head Coach Jon Gruden, then take him out of the Coliseum and move to the rival 49ers facility – for two years before Las Vegas.

And that brings us to the matter of the construction of the Las Vegas Stadium. The truth here is that the Raiders may find themselves seeking a home for not just 2019 and 2020, but 2021. The reason is simple: Las Vegas media aside (and because they don’t do any investigative reporting that calls for independent document and financial analysis) everyone in the NFL knows that the real date of the completion and opening of the Las Vegas Stadium is not known. Reports of July 31st 2020 as the date of “substantial completion” are funny for two reasons: first, what is the meaning of “substantial completion”, second what about the three-month move-in-date after the stadium’s really finished? The NFL has not awarded Las Vegas a Super Bowl, simply because the league does not know when it will be ready to host a Super Bowl Game. That’s a fact. And, for that reason, there’s no guarantee the NFL will grant Las Vegas a 2025 Super Bowl date, or for 2026 either.

The Raiders best option is the Oakland Coliseum, lawsuit or no. Oakland Raiders President Marc Badain may say the Raiders won’t play in Oakland if the City files a lawsuit, but such a decision would be against the best financial interests of the team. Moreover, the Raiders have been in lawsuits against Oakland before, and still played at the Coliseum.

The Raiders were in a lawsuit against Oakland, and the City of Oakland still went after the 2005 Super Bowl in 1999 – 2001. I should know because I ran the Super Bowl Bid effort – the Raiders would have gained control of Super Bowl Tickets with a collective street value of $3 million because of my work.

So, the 49ers legal loss to Santa Clara doesn’t mean the Raiders will be the Niners financial rescuer. The Oakland Coliseum is still the best option for the Raiders, even with the climate of a lawsuit – just like the old days.

Stay tuned.

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Zennie Abraham is the CEO of Zennie62Media

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News: 49ers Legal Loss, Higher Rent At Levi’s Stadium, Doesn’t Change Oakland Raiders Coliseum Lease Options - The San Francisco 49ers lost a legal battle to the...

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Zennie Abraham
Zennie Abraham is the CEO of Zennie62Media