Oakland Raiders Add Bank Of America And New Problems To Las Vegas NFL Stadium Plan
Oakland Raiders Add Bank Of America And New Problems To Las Vegas NFL Stadium Plan - Video
Oakland Raiders Add Bank Of America, And New Problems, To Las Vegas NFL Stadium Plan It was The Oakland Raiders versus Oakland Mayor Libby Schaaf in a high-stakes battle for and against the sports future of Oakland – all played out in sunny Boca Raton, Florida, and before the National Football League's Stadium and Financing Commitees. The small set of Raiders fans in Las Vegas (let's face it, many residents just don't care or if they do, they like another NFL team like the Dallas Cowboys) are overjoyed that the “two Marks” (as they're called by some in the media) have been able to gain Bank Of America as a financial partner in the plan for a stadium near the Las Vegas Strip. Casino barron Sheldon Adelson, pissed over what he saw as the Raiders' attempt to double-cross him, bowed out of the deal, and took his $650 million with him. That, along with the massive bad-mouthing Mr. Adelson exacted on the “two Marks”, seemed to completely wreck the idea. But Oakland Raiders Owner Mark Davis, like Captain Ahab after his great white whale, refused to give up, and dispatched his deputy Raiders President Mark Badain to find someone or some organization to 'replace' Adelson. The best The Raiders were able to do is a reported partnership with B of A. At first, this reads nice, but many forget, if they ever knew, one thing: banks come with a price. In this case, $88 millon in financing costs and a base level of $738 million in free-and-clear money in a revenue stream that goes back to Bank of America. Plus, that does not include the debt coverage ratio. As I've repoerted before in this space, a debt coverage ratio of 1.5 to 1 causes a need for $1,107 billion. So, the Raiders have to find a revenue stream that will generate that level of extra cash for the bond issue's debt coverage ratio hurdle to be met. Well, the only way to do that is via luxury suites, and that's because the Raiders want 100 percent of naming rights. (Well, okay, the Raiders want 100 percent of suite revenue, too – but in truth the Silver and Black wants 100 percent of everything. Well this time, they can't get it.) But let's say they have (we've done this before) 200 suites at an average of 200,000 each. That leaves $1.2 billion over 30 years, or about $93 millon more than what the debt coverage hurdle rate would call for. Now, if you are saying that Bank of America is willing to forgo the debt coverage ratio consideration, and then they're out of the woods, I have news – you are wrong. Let's say the Raiders were able to sell 60 percent of the luxury suite offerings at $200,000 over 30 years . Okay? That means they would get $720 million, and they would be about $18 million short of the bond issue requirements. Which means the Raiders would have to sell about 61.5 percent of the suites over a 30 year period. The main problem here is this: can the Las Vegas market throw off that kind of cash given that it's just about 1/4th the size of the San Francisco Bay Area? The answer, given that there's no comparable for this in Las Vegas, and along with the other population variables, would appear to be a flat no. And then, there's another problem: colateral. In order for this to work, the Raiders would have to put up the stadium as backing for the bond issue. But here's another problem: Clark County, and NOT the Oakland Raiders, own the stadium. Clark County does this because it has the $750 million bond issue to worry about. Ouch. So, the Raiders just gave themselves a new set of complications in Las Vegas. Any NFL Owner approving this deal would have to have their head examined. Stay in Oakland.
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https://youtu.be/bS1hJMUlHvs
Oakland Raiders Add Bank Of America, And New Problems, To Las Vegas NFL Stadium Plan It was The Oakland Raiders versus Oakland Mayor Libby Schaaf in a high-stakes battle for and against the sports future of Oakland – all played out in sunny Boca Raton, Florida, and before the National Football League's Stadium and Financing Commitees. The small set of Raiders fans in Las Vegas (let's face it, many residents just don't care or if they do, they like another NFL team like the Dallas Cowboys) are overjoyed that the “two Marks” (as they're called by some in the media) have been able to gain Bank Of America as a financial partner in the plan for a stadium near the Las Vegas Strip. Casino barron Sheldon Adelson, pissed over what he saw as the Raiders' attempt to double-cross him, bowed out of the deal, and took his $650 million with him. That, along with the massive bad-mouthing Mr. Adelson exacted on the “two Marks”, seemed to completely wreck the idea. But Oakland Raiders Owner Mark Davis, like Captain Ahab after his great white whale, refused to give up, and dispatched his deputy Raiders President Mark Badain to find someone or some organization to 'replace' Adelson. The best The Raiders were able to do is a reported partnership with B of A. At first, this reads nice, but many forget, if they ever knew, one thing: banks come with a price. In this case, $88 millon in financing costs and a base level of $738 million in free-and-clear money in a revenue stream that goes back to Bank of America. Plus, that does not include the debt coverage ratio. As I've repoerted before in this space, a debt coverage ratio of 1.5 to 1 causes a need for $1,107 billion. So, the Raiders have to find a revenue stream that will generate that level of extra cash for the bond issue's debt coverage ratio hurdle to be met. Well, the only way to do that is via luxury suites, and that's because the Raiders want 100 percent of naming rights. (Well, okay, the Raiders want 100 percent of suite revenue, too – but in truth the Silver and Black wants 100 percent of everything. Well this time, they can't get it.) But let's say they have (we've done this before) 200 suites at an average of 200,000 each. That leaves $1.2 billion over 30 years, or about $93 millon more than what the debt coverage hurdle rate would call for. Now, if you are saying that Bank of America is willing to forgo the debt coverage ratio consideration, and then they're out of the woods, I have news – you are wrong. Let's say the Raiders were able to sell 60 percent of the luxury suite offerings at $200,000 over 30 years . Okay? That means they would get $720 million, and they would be about $18 million short of the bond issue requirements. Which means the Raiders would have to sell about 61.5 percent of the suites over a 30 year period. The main problem here is this: can the Las Vegas market throw off that kind of cash given that it's just about 1/4th the size of the San Francisco Bay Area? The answer, given that there's no comparable for this in Las Vegas, and along with the other population variables, would appear to be a flat no. And then, there's another problem: colateral. In order for this to work, the Raiders would have to put up the stadium as backing for the bond issue. But here's another problem: Clark County, and NOT the Oakland Raiders, own the stadium. Clark County does this because it has the $750 million bond issue to worry about. Ouch. So, the Raiders just gave themselves a new set of complications in Las Vegas. Any NFL Owner approving this deal would have to have their head examined. Stay in Oakland.
via IFTTT
https://youtu.be/bS1hJMUlHvs
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