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NFL owners made it official on Monday by approving the Oakland Raiders relocation bid to Las Vegas by a vote of 31-1 with the Miami Dolphins the lone team to dissent. The Raiders will play in a 65,000-seat domed stadium expected to open in 2020. Taxpayers will contribute $750 million to the project, largely through a hotel tax, the NFL is kicking in $200 million as part of its G-4 stadium fund and the Raiders on the hook for the rest. This is the third NFL team relocation in 15 months. Like most things with the NFL, you need to follow the money.
Oakland Raiders fans are crushed by the team's relocation bid. (Photo by Tim Warner/Getty Images)
The average NFL team is worth $2.34 billion with every team worth at least $1.5 billion per Forbes latest NFL franchise valuations. Every team is profitable and worth 10-figures thanks to the NFL's massive TV contracts, which spit out more than $200 million per team before a ticket, beer or jersey is sold. But what separates the NFL's haves from the relative have-nots is the stadium.
Baseball teams and to a lesser extent NBA teams are often separated financially by their local TV deal. Los Angeles teams like the Dodgers and Lakers can generate ten times as much as other teams from their local cable deals. Not so in the NFL where local TV contracts are small and only cover the preseason with the networks controlling all of the regular season and playoff inventory.
Stadium economics are what pushes a team like the Dallas Cowboys to a franchise value of $4.2 billion and keeps the Bills at the bottom of the NFL table at $1.5 million. The Raiders have the NFL's worst stadium situation playing in the antiquated Oakland-Alameda County Coliseum, which opened in 1966. The Raiders generate the least stadium revenue in the NFL year after year. The Raiders stadium revenue was an estimated $69 million for the 2015 NFL season from tickets, premium seating, concessions, sponsorships and parking. Compare that to the Dallas Cowboys, who generated more than six times as much at $440 million, including their hefty merchandise sales. The Raiders are $76 million below the league average of $
The Raiders are $76 million below the league average of $145 million. That gap would continue to grow with new stadiums in Minnesota and Los Angeles.
Jerry Jones stands to be one of the biggest winners in the move. He reportedly brought Bank of America to the table. B of A agreed to loan the Raiders $650 million towards construction after Goldman Sachs backed away from the deal. Jones will reap 1/31 of the Raiders relocation fee of roughly $350 million. He'll also cash in through his stake in Legends, the hospitality group Jones owns in conjunction with the New York Yankees. The Raiders are not going to catch the Cowboys in revenue, but Legends will handle the sales and marketing of premium seating and sponsorships for the Raiders in Las Vegas with Jones reaping his slice of the pie. Legends also secured the sales duties for the Rams after their move to Los Angeles, which Jones was instrumental in orchestrating.
Below is a breakdown of the top and bottom NFL teams for stadium revenue during the 2015 season net of annual stadium debt service payments.
NFL Stadium Revenue
1. Cowboys: $440 million
2. Patriots: $279 million
3. 49ers: $212 million
4. Giants: $204 million
5. Redskins: $203 million
League Average: $145 million
28. Bills: $94 million
29. Lions: $88 million
30: Rams: $87 million (before move to Los Angeles)
31: Vikings: $74 million (before new stadium opened)