Yesterday, The oakland raiders announced that Allegiant Airlines purchased the Las Vegas Stadium naming rights. While the actual number was not disclosed, this space speculated that the level of planned payments was $20 million a year over 20 years, or $400 million.
The original level sought was $30 million a year over 30 years according to Vital Vegas, or about $600 million. But that was way too far outside the justified level of value.
Given that Las Vegas is the 42nd largest media market, it’s hard to justify that “ask” but then, there are several factors at play here:
1. Las Vegas itself is a unique city in American Culture. Just the very name implies fun and freedom and escape.
2. Allegiant Airlines is a Las Vegas-based business. It seems there was a lot of behind the scenes pressure for local firms to come to the plate and assist in financing Las Vegas Stadium. Like from the Governor of Nevada:
— Steve Sisolak (@SteveSisolak) August 5, 2019
3. Dallas Cowboys Managing Partner Jerry Jones (I’m moving away from using the term “owner” unlike JT The Brick) is also the founder of Legends Hospitality, which is the firm responsible for the sale of suites and naming rights at Las Vegas Stadium. I was there when Jerry Jones pitched Las Vegas Stadium to an audience at CES Las Vegas 2019. He has an idea that you should sell as if you have “two dollars in your pocket and the rent is due tomorrow.” And Jerry Jones is now a billionaire. I have no doubt this Allegiant Stadium / Las Vegas Stadium deal has Jones written all over it.
4. This, Las Vegas Stadium, and now Allegiant Stadium for Allegiant Airlines, marks the first building of its type ever built in Nevada. Large events centers that seat over 55,000 come with their own marketing economics; from that perspective, and considering its Las Vegas, Allegiant Airlines pay out of $400 million over 20 years is right on the mark. Still, it’s a stretch for Allegiant Airlines, given that it’s almost 10 percent of the firm’s net operating income – an unheard of level of commitment. United Airlines and American Airlines, which have naming rights on various stadiums and arenas, have net incomes of well over one billion.
Allegiant Stadium’s Las Vegas Stadium Topping Out But Still A Long Way To Go
Also, Allegiant Stadium’s Las Vegas Stadium was topped out, but that doesn’t mean its finished. It just means the last beam was put in place for the facility. There’s still a lot to be done. For example, some of the trusses still have to be set in place, and the last report (July 18th) from the Stadium Authority read:
Similar to the Construction Monitor’s findings, Grand Canyon Development Partners (“GCDP”) noted a continued focus on the steel erection and the upcoming cable net roof system installation, noting that the ring beam centering, originally scheduled to be completed by the end of July, is now scheduled on or before the week of August 19, 2019. Notably, GCDP cited “substantial progress in steel erection” during the past month with twenty-one of twenty-four canopy sections installed, three canopy sections on the ground in various stages of assembly and the expectation that the project will be “topping-off” on August 5, 2019.
So, that Allegiant Stadium “topping-off” happened, but there’s a long way to go. Remember, that the schedule now calls for finish, and not “substantial completion”, to be October 31, 2020, not August.
Allegiant Stadium’s Naming Deal Reduces Stadium Deficit To $700 Million
The oakland raiders and Legends have a long way to go in landing founding sponsors. The President, or the “racist in chief”, has made that job harder with his new China tariffs and their expected negative economic impact. Now, the Allegiant Stadium deal puts the partners closer to what they need, but still at $700 million to go. They only have four founding partners signed up and need 10 to 14 founding partners, or about $1.1 billion. Landing them is going to be slow-going, even with the Allegiant Stadium deal.
In closing, President Trump has really made a racist mess of things – we as Americans have to clean it up. The Las Vegas Stadium story should be a fun one, so let’s move to make it that way.
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