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Yesterday we looked at the Oakland Stadium situation for the A’s and the Raiders and explored the various venues that may work for a new facility. Today we will look at how to pay for it.
The Truth About Using Tax Payers Money:
Economists have overwhelmingly found that spending public money on stadiums has little economic benefit for the city and rarely creates the jobs and prosperity that the backers promise. This recently was seen in St. Louis with the Rams. The City of St Louis still owes $129 million to pay for the abandoned football stadium now that the Ram’s are leaving. The city of Oakland still owes $100 million from the Al Davis upgrades when the Raiders moved back. The numbers don’t lie. Using tax payer money would be very irresponsible. Some cities selling their souls for teams have done 30 year tax loans. Insanity. New stadiums may help keep the team in the city but the teams are the financial winners in the end.
The First Thing Mark Davis Should Do:
If I were Mark Davis I would hold a press conference immediately. I’d say, “Whatever has happened in the past or with the NFL vote is water under the bridge. I will do anything and everything that I personally can to build a permanent stadium in Oakland for the Raiders. My goal is not to hurt the A’s or the tax payers of Oakland in any way but I want a football only stadium to compete. It’s up to Libby Schaaf, the City of Oakland and my search team to get the funding that is needed. I have hired Carmen Policy and Disney CEO Bob Iger to help with this process. If the unfortunate happens and things don’t work out and we have to move, I want it be known that I did everything physically and financially possible to make this work”.
Leadership. That is what is needed. If Davis would do these things, I see a stadium being built no problem. Carmen Policy has MEGA stroke in the bay area. He is personal friends with many local and state politicians and corporations through out the bay area including Silicon Valley. His winery and his past dealings when he was with the 49ers have made him powerful in the bay area. Disney also obviously has a lot of pull anywhere. Hire anyone affiliated with the Giants/Jets situation or the 49ers new stadium. Anyone that knows what to do and how to get it done. Now let’s look at the nuts and bolts of the situation.
Ways to Get Revenue For A New Stadium:
- Corporate Money:
What the Raiders need for a stadium is lunch money to Technology companies. If you can’t get a sponsor out of Silicon Valley while having the clout of the NFL behind you then you flat out didn’t try or ask. This is the adult world and they are not going to come to you. The 49ers did a great job of doing this and in the end they had their pick of sponsors without using tax money. Knock on doors, wheel and deal. Hello Carmen Policy. If I was Mark Davis there isn’t a door I wouldn’t knock on or hand that I would not shake.
- Sell Part Ownership:
Mark Davis is a nice guy but he’s in over his head. Why can’t Mark Davis go to the CEO of Disney Bob Iger or any big wig rich guy and sell off 5-10% of the team. With the money from a new stadium and appreciation Davis will have more money in the end than he could ever imagine. Davis is still the managing general partner and he has more shares than anyone.
- Live Streaming:
THINK GLOBALLY. Some of you older fans may say huh? at some of these ideas but its time to think outside the box into tomorrow.
A total of 61% of all revenue is shared by the teams. What ISN’T shared is what the NFL calls territorial revenue. Any local tv, advertising, merchandise, or other revenue that is created within the teams local radius is totally kept by the team. Last year alone Green Bay made $151 million in Territorial Revenue, $34.9 million in their new local club houses alone; that included online and in person sales.
If I were the Raiders I would approach You Tube and/or Google or Direct TV and create a live stream with the local television affiliate. During the stream you can advertise, sell items or do whatever you want. I would even make a separate app that can be used on all tablets and phones.
When Yahoo did live streams on a few of the NFL games last year, the NFL was shocked at the numbers. In one of the games they had an average of 10-20 million viewers watching the stream every minute. You can taste the advertising money. Now that pales in comparison to television viewers, but you are now thinking globally because many of the people that would watch the games are not in the U.S. I actually researched the geographical breakdown and the fact is for one game on Yahoo at times 33% of the viewers were NOT in America. Even though we forget it sometimes, the world doesn’t revolve around the U.S. and there are a whole lot of new fresh faces to market to.
You are now entering into a huge untapped revenue source and your popularity can only grow. ESPN has done it for their college games without announcers. I’ve actually streamed it sometimes and it’s great. It’s starting small but growing in popularity. Streaming is the future and the present. Concerts are live streamed all the time, so why not NFL locally?
I would do marketing campaigns with local Hispanic, Indian, Chinese and other cultural based channels and advertise the live streaming and the merchandise. I would make the Raiders a world wide brand and market the Oakland Raider nation as a global entity. When it grows I would then do pre and post game shows in various languages (with advertising) on various foreign channels or stream them. People would drink it up like it’s got the antidote. No one has done this but the Raiders have a large following all over the world. If you can’t make money this way, then you just aren’t trying.
Why do you think dozens of countries are at WWE Wrestlemania and even TNA is now getting into India. GLOBAL MONEY. Wrestling has been marketing globally long before WWE. WCCW in Dallas had viewers all over the world they marketed to. I would also begin creating a social media like Twitter or Facebook JUST for Raider fans through out the world.
- Guaranteed Tax bonds:
Guaranteed corporate tax bonds are done all the time in the U.S.. The City of Oakland would be responsible for this. Go to Kaiser Health or another company and ask for a $300 million tax bond so you pay in time. Kaiser has so much money now that they are going to build a college. Health insurances are making hand over fist with the cuts to providers so this is doable. In the end you can possibly even make a little money after paying it back.
In smaller ways you can make a deal with Uber. Have a Raider fan app that will be exclusive for games giving Raider fans discounts on fairs in exchange for advertising money and cash.
6. Sell Office Space:
Another effective way to make money is to sell office space. If you walk in the back of the San Francisco Giants A T & T park, it is filled with medical offices. Oakland has tons of medical offices that would love to upgrade to new office space. This is year round revenue.
- Developer Rights and Part Ownership:
This is one that is a favorite of the City of Oakland and they’ve talked about it with Mark Davis and I don’t like it. First of all Mark Davis is obsessed with having a huge area for parking for tailgating. That is great but parking is not a year round revenue source. With BART, parking would be less of a need and would take up valuable land that could give the City and possibly the team year round revenue with stores and other businesses. With a new stadium you could make picnic areas outside the stadium for pre-game partying. Mark Davis also wants complete control of the land.
The City wants to offer a developer cheap land and part ownership in exchange for $300 million; that’s the short fall that is needed to build a new stadium right now. If this was San Francisco or the South Bay near Silicon Valley this is a no brainer that any developer would want. In Oakland, not so much. The City is also offering a 9 acre parcel of land as well. This seems to be a popular hope but in reality I like the previous ideas a thousand times better and I’m not thrilled that this is a good idea.
Above are just ideas off the top of my head. Smart people can figure it out if they drop their ego’s at the door. Too many people trying to be right instead of doing right. Of course they aren’t as cut and dry as I’m putting it but they also aren’t as complicated. Problem is you have ego’s, hurt feelings and insecurity with people in these deals and that’s where things go wrong. Where there is a will there is a way.
The City of Oakland needs to get off their butt and act. It’s also time for Mark Davis to prove people wrong and show the NFL that he is a real NFL owner. Will he hire people to work hard like he did for Carson or will he just have his hand out looking for corporate money from tax payers in cash strapped Oakland while pleading victim.
Do you think for a second that Stan Kroenke created his sports empire by just sitting by waiting for others to give things to him? Do you Think Al Davis would kick a can and say aw shucks, you fix it?
What is needed is confident and competent leadership. We will see if either side has these abilities. I hope that Mark Davis and Libby Schaaf put in the work and make it happen. Schaaf has to show business and political savvy and Davis needs to stop telling Oakland that he wants to stay and start showing it. The Raider fans have been through enough; Make it happen. There’s lots to do.