The NFL’s 32 team owners met in Phoenix on Monday, where 31 of them voted yes to allow the Oakland Raiders to relocate to Las Vegas.
This is certainly a controversial move for a league that has appeared to be against any association with “Sin City” for many years. There is in fact still a rule in place that forbids any owner of a gambling company from becoming an NFL team owner.
Beyond the complicated philosophical questions, there are simpler business doubts about whether an NFL team can be successful in Las Vegas, a city of tourists. Many skeptics have said the move doesn’t make sense for the team or for the Las Vegas Strip.
But having an NFL team in Las Vegas makes clear financial sense for the local economy.
It’s why elected officials in Clark County, Nev., where the $2 billion mega-stadium will go up, voted to approve $750 million in public funding for the stadium—the largest public subsidy ever given to an NFL stadium. (The money will come from a small hike in hotel room taxes.) And it’s why Raiders owner Mark Davis pushed so hard for this move.
The Raiders can sell tickets in Las Vegas just fine, and the team and the stadium can be an economic boon for Las Vegas. Here’s why.
“Two loyalties” for local NFL fans
To those that say there won’t be a strong fanbase for the Raiders in Vegas, Las Vegas Sands CEO Sheldon Adelson had an answer for that.
Adelson was originally signed on to contribute $650 million to the stadium effort, but has since dropped from the project. In an interview with Yahoo Finance last summer, Adelson explained why he felt an NFL team could thrive in Las Vegas.
Residents of Las Vegas are mostly transplants from somewhere else, but Adelson argued that even if those transplants have allegiance to their original hometown team, there’s no reason they can’t have a second team.
“I’ve said in the past that the citizenry was too transient and they come here with loyalty to another team,” he said, “but hey, they could have two loyalties… They may not be as enthusiastic or want to spend the same money they would on the team they’ve supported for decades, but they certainly would go to the stadium when their former hometown team comes in.”
Obviously, local football fans who only go to Raiders games when their original hometown team is visiting wouldn’t be enough to sell out games. But the team will be attractive to corporate groups, who will buy suites. (The Chargers, in their move to Los Angeles, have a similar plan.) And to bolster the numbers, local hotels and travel companies will surely offer travel packages.
Packages for tourists and visiting fans
You can expect the hotel-casinos that line the Vegas strip, and NFL teams themselves, to offer packages to fans of visiting teams. Think discounts on combined airfare-and-hotel for a weekend when the New England Patriots are playing the Las Vegas Raiders, just like teams offer to their season ticketholders when they make the Super Bowl.
Adelson, whose real estate footprint in Las Vegas (The Venetian and The Palazzo) is the biggest of any casino owner, outlined in no uncertain terms how the local hotels could boost their own capacity and also ensure that visiting tourists go to the games: “We could package our rooms with prime seats in the stadium… And all the other hotels could do that too. They could buy tickets to the events and offer to their guests.”
If you imagine a couple visiting Vegas to gamble, or a group of young people visiting for a bachelor or bachelorette party, or even a solo traveler in town for a business trip, all of those are people who might be interested in going to a football game if there’s a sweetener in it for them, like a discounted ticket or a discount on an additional show or hotel room.
But that only covers stadium traffic during the NFL season. What about the rest of the year?
Non-football events at stadium
This part is easy enough: expect Davis and the Raiders to schedule a wide range of non-football events at the stadium during the NFL offseason. The stadium will have a retractable roof, so all manner of sports and shows can take place there.
Las Vegas is still the boxing capital of America, so this creates an additional fight venue to the MGM Grand. They can host soccer friendlies; college games; MMA fights; and concerts. And the runoff from those events would presumably get injected into local restaurants, bars, and hotels.
During the long process of getting approval for the $750 in public funding, members of the Las Vegas Stadium Authority repeatedly indicated they were anxious about the stadium hosting enough events to make the funding worth it. Now that the funding is approved, and now that the team’s move is approved, all that remains is to build the stadium, which Bank of America is backing.
You can bet that once the stadium goes up, local authorities will do everything they can to ensure that a lot more than football happens at the stadium.
—
Daniel Roberts is the sports business writer at Yahoo Finance. Follow him on Twitter at @readDanwrite.
Read more:
Goldman Sachs pulls out of Las Vegas NFL stadium deal
Inside Sheldon Adelson’s plan to fund a $1.9 billion NFL stadium in Las Vegas
An NFL lawyer hints at the league’s changing stance on gambling
