ONN – With Raiders On Hook For $650 Mil BofA Loan, Las Vegas Stadium Event Cancellations Add Worry
With the cancellation of the Cal vs. UNLV Football Game, now some sports business industry observers wonder if the Las Vegas Raiders can weather the financial storm caused by the Coronavirus? The focus of their concern is the $650 million loan (plus interest) that the former Oakland Raiders agreed to with Bank of America.
The primary revenue stream that was to be used to pay back Bank of America was the expected $1 billion and more in sponsorships the facility called Allegiant Stadium was expected to generate. The cost of the sponsorships were based, in part, on an expected number of events. But so far, one of two of those events has been cancelled and the other is expected to be cancelled and rescheduled.
The first event is the Cal vs. UNLV Football Game. That contest set for August 29th, was to be the game that marked the course for the future of not just UNLV Football, but the University of Nevada Las Vegas, itself. It was nixed when the Pac-12 announced it was planning to hold a “conference-only” season schedule. Now, everyone’s looking at the Garth Brooks Concert.
The tickets for the August 22nd Garth Brooks Concert went on sale March 13th, and sold out in 45 minutes: 65,000 seats were accounted for. But that was on the same day that Nevada government organizations were just trying to figure out how to cope with the Pandemic. Later that month, the very Las Vegas Strip itself closed down.
Now, there’s question after question of when the concert producers will announce the expected and logical action: to cancel the concert and move the date, and the tickets that were purchased.
Then, there’s NFL Football. If the preseason is trimmed from four to zero games, that also harms sponsorship value. Allegiant Stadium would have lost four large events in the space of month due to COVID-19. With that has to mean less than the expected $1 billion and more in sponsorships, and those payments are not all upfront, but on a “for-performance” basis tied to events, downstream.
The question is, will the government step in to help? And what about Sheldon Adelson? Originally, he was expected to be the source of the $650 million, but he reportedly went away when it looked like he was being double-crossed by the Raiders. While I think that was just a game to land the NFL Owners approval (since a casino owner was not wanted in the NFL Owner fold), the question now is, will Adelson work to gain some control of the Raiders, and will Mark Davis give that up? Or will Davis draw another partner? In either case, he will need one.
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