The push for a Las Vegas Stadium for the Oakland Raiders is continuing without a private partner, as Majestic Realty is removing itself from the plan.
For most of this year, Majestic Realty has teamed with the Raiders and Sheldon Adelson’s Las Vegas Sands Corp. on a proposal to bring the franchise to Las Vegas. That plan’s fate is getting closer to resolution–a special session concerning the project and other issues began today–but Majestic Realty says it will no longer be involved as a partner.
Majestic Realty’s departure does not change much in the broader picture. Unlike the Raiders and Las Vegas Sands Corp., Majestic was not providing a financial contribution to the project. The company was also not represented at a few key meetings with the Nevada Southern Tourism Infrastructure Committee, the group that studied and eventually recommended the stadium plan to Nevada governor Brian Sandoval.
Mainly, Majestic was involved in the process because of its ties to UNLV. While UNLV is still expected to be a tenant in the proposed stadium, Majestic executive vice president Craig Cavileer says that the company could re-team with the university down the road. More from the Las Vegas Review-Journal:
“We’ve done everything we can do to get it to this point,” Cavileer said. “We’ve been loyal to this cause and worked closely with everybody to move this along. It’s moved to the point where it’s something Sheldon really wants to do with his family, so we’re willing to step back and let it go forward. We’re enthusiastic and supportive and happy to get involved in any way if somebody wants us to, but at this point, I think it will go off on its own.”
Cavileer said he’d be willing to help UNLV develop a smaller stadium if the Adelson-Raiders plan fails. Under proposed legislation, UNLV would have two years to raise $200 million for a smaller facility if the Raiders don’t relocate to Las Vegas.
If the Raiders do relocate to Las Vegas, the question on the minds of many is just how viable of a revenue stream the stadium can create. Both the Raiders and the Adelsons are assisting in the project’s funding, with their respective contributions coming in at $500 million and $650 million.
While the Raiders would inevitably walk into more revenue prospects and increase their value from where it is in Oakland, there are still some questions about how the project will satisfy all sides involved. There is the question of how the Raiders and Adelsons will split the revenue, and some are wondering if the stadium can attract enough non-football events to generate further revenue. In the past there has been some talk of Las Vegas bringing in an MLS expansion franchise, but there is a significant question of whether the MLS could compete with NFL and NHL francises, both of which would be established in the city.
There is, of course, the option to bring in friendlies and major tournaments from NCAA conferences and other sports. However, some are uncertain that the Raiders will see a major revenue windfall from the move. More from the Las Vegas Review-Journal:
Jeremy Aguero, a principal analyst with Applied Analysis in Las Vegas, modeled the stadium revenue projections that were displayed at this summer’s SNTIC meetings and will be presented to the Legislature. The aggregate event revenue in the stadium’s first year is estimated at $263 million. Including nonevent revenue, such as naming rights, the total is close to $290 million.
How the revenues are shared among the Raiders, the Adelson family and the stadium operating company will be negotiated among those sides. After expenses, the net operating income — projected to be $20 million to $25 million in the first year — would be the return for the stadium developers. Aguero said it’s unclear if the NFL team would share in the money or if that would be the return for the Adelsons.
“That’s a relatively modest return on a $650 million investment,” Aguero said. “Are the developers going to get rich off of it? No.”
According to Forbes, the Oakland franchise’s estimated worth was approximately $1.43 billion last year, putting the Raiders in the league’s bottom five with Buffalo, Cincinnati, Detroit and the Rams, who experienced a major boost in value this year after relocating from St. Louis to Los Angeles.
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