Oakland Raiders Las Vegas NFL UNLV Stadium Hampered By $600 Million Project Funding Gap
The Oakland Raiders face giant hurdles on the road toward completing the planned Raiders Las Vegas NFL UNLV Stadium near the Las Vegas Strip. Basically, the Raiders, as the stadium development company, are looking at a project funding gap that is just under $1 billion, as of this writing.
To answer why, we have to look at a breakdown of project costs and revenues based on what was presented to Las Vegas and Nevada public and private officials who sat on the Southern Nevada Tourism and Infrastructure Committee from 2015 to 2016.
Total Project Costs
Construction Costs $1,350,000,000
Land, Infrastucture, On-Site Costs $350,000,000
Practice Facility $100,000,000
Contingency $100,000,000
Total Stadium Construction Costs $1,900,000,000
Off-Site Transp Infrast Costs (NDOT) $250,000,000
Off-Site Non-Trans Parking Costs $195,000,000
Total Stadium Development Costs $2,345,000,000
Total Project Costs $2,715,000,000
Funding Sources
Raiders Team Investment $500,000,000
Public Investment $750,000,000
Private Investment (B of A Loan) $850,000,000
Additional Private – Public Investment $0
Total Funding Sources $2,100,000,000
Total NFL Stadium Project Net Income -$245,000,000
Est. Stadium Retained Revenue
Total Annual Event Revenue (30 yrs) $934,323,450
Total Annual Non-Event Revenue (30 yrs) $309,632,820
Total Stadium Revenue $1,243,956,270
Total Stadium Operating Expenses $646,119,390
Stadium Net Operating Income $597,836,880
Debt Service And Capital (From SNTIC Model)
Bank of America Loan +LIBOR $885,190,000
Capital Expenditure $75,000,000
Total Debt and Capital $960,190,000
Free Stadium Operating Cash Flow -$362,353,120
Total Project Operating Cash Flow -$607,353,120
The total funding gap consists of a lack of publicly reported additional financing and because of the twin problems of offsite infrastructure costs and parking land costs. That produces a financing gap of $245 million with respect to project costs.
The other problem is produced by the low retained stadium operations revenue with respect to the additional cost caused by the need to pay back the Bank of America loan. The SNTIC Consultants originally called for a naming rights agreement of $210 million – that’s reflected in the “Total Annual Non-Event Revenue” of over $309 million. But the loan from B of A produces a need for an additional set of sponsorships totaling just over $362,353,120. That is the second shortfall and representing Stadium Operations.
Here, it must be reported that the total expected annual stadium revenue was $264 million, but that money goes to diferent organizations: the concessionaire, the NFL, event organizers, and the Oakland Raiders. Of this, the NFL and event organizers take 76.4 percent of that money. That’s not for stadium operations, and unless you might believe otherwise, suite revenue is included in what goes to stadium operating costs annually. Premium Seat Revenue is assumed to go 100% to the Raiders, as is true for stadium concessions – those monies help run the football operations side of the organization, separate from the stadium.
In the original proposal, with Sheldon Adelson involved, stadium operating costs and construction overruns were to be covered – not here. The Raiders have to find an additional $607 million in sponsorship revenues, and public and private investment. Now, this spreadsheet represents stadium operating costs and revenues spread over a 30 year period, but the fact remains they are there.
On the stadium construction side, the Raiders may say they can borrow that $245 million, but from what revenue source do they propose to pay it back? Parking revenue is already accounted for in this model, so one can’t just slap another fee structure here and assume it will translate into people actually paying it – that could add up to over $100 per car, per game. It’s crazy to think patrons will pay for that, even for a Super Bowl Game.
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