Bank of America Agrees to Replace Sheldon Adelson’s Funding in the Las Vegas Stadium Project
The Oakland Raiders have received funding to replace Sheldon Adelson’s role in the Las Vegas football stadium. The Raiders informed the stadium and finance commmittees of the National Football League that Bank of America plans to finance the NFL-ready stadium.
It is a key announcement just weeks before the 32 NFL owners vote on whether to approve the Oakland Raiders’ move to Las Vegas. To receive league approval, the Raiders need 75% of the owners to approve their relocation during NFL meetings in Phoenix on March 26 through March 29. A modern stadium is a key selling point, so solid financing is a key element of the Raiders’ plan.
Nevada Hotel Tax Would Pay $750 Million
The stadium plan involved a public/private partnership with three key parts. The Oakland Raiders would pay $500 million, the state of Nevada would pay $750 million, and Sheldon Adelson’s group of investors would pay $650 million. That amounted to a $1.9 billion project.
Last month, Sheldon Adelson said his group was pulling out of the project. A spokesman said the Raiders were being selfish with their demands, pretending others who would share the stadium were not as important. Weeks before the NFL vote, the Raiders lacked the funding for the project.
NFL Uncomfortable with Casino Connections
Behind the scenes, the story was a bit more complicated. ESPN reported that a number of NFL owners were not comfortable with a casino mogul involved in the funding. According to the same source, owners became more concerned when reports surfaced “that he wanted partial ownership for his investment, or a path to ownership”. The public statements might have been a face-saving tactic, when Adelson continues to support the project.
NFL Commissioner Roger Goodell gave vague support early in the process, but recently began making more sharply-worded statements that the NFL wanted to distance itself from Las Vegas’s casino industry. Goodell said, “I don’t see an ownership position in a team from a casino. That is not something that is consistent with our policies…not likely a stadium, either.”
In short, the NFL was ready to approve a Las Vegas stadium, but not if casino money was involved in the project — and certainly not on the agreement that a casino executive might one day own a part (or all) of an NFL franchise.
Roger Goodell: “We Haven’t Made a Determination”
Roger Goodell appeared as if he and the owners were willing to play hardball. The commissioner used the carrot-and-stick approach, dangling one of the NFL’s most recognizable franchises, but suggesting there were lines the league would not cross.
Even though the process is in the late stages before a vote, the commissioner suggested the NFL was still evaluating the whole process. Goodell added, “We haven’t made a determination about Las Vegas as an NFL market. That’s part of the relocation process. The Raiders submitted an application; it’s one that we’re considering carefully. But there’s a great deal more work to be done, and there are several elements of that — financing the stadium is just one.
“Obviously, the stadium project itself, the depth of the market, all of those are things that we’ve studied over the last several months. But that will increase in intensity over the next month or so as we move forward in that process.”
Goldman Sachs Considered Financing the Plan
After Adelson left the project, Goldman Sachs considered financing the stadium, but eventually declined to do so. That is when Bank of America joined the project. The NFL is America’s premier sports league with billions of dollars in television contracts — contracts which include all the major networks. While the price tag for the Las Vegas stadium is large for Bank of America, investing in the NFL is considered a safe bargain.
The Oakland Raiders have chosen a lot for their stadium. It is a 62-acre plot on Russell Road on the west side of Interstate 15, near to the Mandalay Bay Resort and Casino on the south end of the Las Vegas Strip on Las Vegas Boulevard. A lot closer to the airport was first considered, but the airport’s ownership looked as if it would try to stop the development. When completed, the stadium will be home to the Raiders and the UNLV Runnin’ Rebels football team.
Sheldon Adelson Played a Key Role
Despite the pullout, it should be noted that Sheldon Adelson’s stadium group got the ball rolling. Not only did the $650 million offer of funding start the talks of an NFL stadium in Las Vegas, but Adelson and his allies lobbied the state of Nevada to fund $750 million of the project. Hotel taxes that largely fall on tourists will pay for the state’s funding of the project.
