In 1999 during my time with the Vancouver Grizzlies we seriously explored Las Vegas as one of our relocation locations along with Anaheim, Louisville and Memphis. Commissioner David Stern was not a fan of putting a team in “Sin City” and our lobbying efforts both in Nevada and NBA headquarters came up snake eyes.
As the speculative talk continues relating to the Oakland Raiders relocation and the NHL awarding an expansion franchise to Las Vegas there are a number of complex considerations that will come into play before any franchise actually plays a full regular season in Nevada.
Size of Market and Demographics:
Las Vegas comes up every time a major professional league considers relocation or expansion. The size of the market and its unique demographic profile presents a significant hurdle for franchise success.
Las Vegas is 28th in population.
Las Vegas is the 42nd largest TV market.
Las Vegas would be the 5th smallest NFL TV market behind Green Bay, Buffalo, Jacksonville and New Orleans with 720,000 TV households.
Las Vegas has a large service industry population whose work hours are nine to five, that’s 9PM to 5AM. Retirees won’t necessarily spend their nest eggs buying seat licenses or tailgating. They may not be interested in attending any night game that doesn’t contain some sort of “Early Bird” special.
The leagues are taking a conservative position on how legalized gaming will work on the perception of their games, their superstar athletes, media scrutiny and overall business positioning.
NBA Commissioner Adam Silver had these comments on legalized betting:
“I think sports betting may happen sooner than anyone would have thought. But we’ll see. It depends what party is controlling Congress and who the President is. But I think it makes perfect sense especially when all these jurisdictions are in need of tax dollars, with crumbling infrastructure that if people don’t wanna raise taxes over here and if people are going to continue to gamble on sports illegally let’s protect the integrity of the league's, let’s regulate it, let's tax it.”
The NFL has a longstanding opposition to sports betting. That being said it is estimated that $4.2 billion dollars were bet on Super Bowl 50 with 97 percent of the bets made illegally. Legalized gaming might be preferred and present another massive revenue stream.
Commissioner Roger Goodell and several powerful owners may be softening their position based on the Raiders ongoing relocation challenges. With the ongoing controversy of CTE facing the NFL is now the time that they want to take on the multiple issues connected to moving a franchise to Las Vegas?
Whenever the NFL or NHL decides to open their doors in Las Vegas they will be facing a significant amount of competition in a town that embraces mega-events:
- World Championship Boxing
- MMA and UFC
- Entertainment - Want a superstar concert or performance, there’s one every week. Cirque du Soleil and other long running shows don’t have long losing streaks
- Gambling - Oh yeah, that’s why people come to Las Vegas
- “What Happens in Vegas stays in Vegas”- Every General Manager for a team playing in Vegas will have this line memorized and not in a good way.
- UNLV Sports
- College basketball has found a home in Vegas for its postseason basketball tournament success with the Pac-12, WCC (West Coast Conference) WAC (Western Athletic Conference)
If you happen to be a losing franchise playing another bottom feeder up against several mega-events who will be coming to your game? That is going to be a team marketer's nightmare.
NFL Relocation fees:
Mark Davis hasn’t publicly talked about the cost that his fellow owners may decide to bill him for relocating the Silver and Black to the neon lights of Vegas. The speculation is that the fee could be from $250 million to the $550 the Rams paid to move from St. Louis to Los Angeles. Where are the Raiders going to get that relocation money considering they are already $750 million short of what they need to build a stadium in Las Vegas?
Relocation or Expansion:
Let’s say that the NFL decides that Las Vegas should be an expansion market with one other team (maybe London) creating a 34 team league. What if the league decided to wait a few years and make a play for legalized betting on all of their games? They could set a number for Las Vegas and London which would create stratospheric levels never seen before. Let’s say $3 billion dollars expansion fee per city.
Put yourself in position of being an NFL owner and direct depositing 1/32nd of the new pile of revenue from relocation or expansion. Do the simple math. Would you rather take 1/32nd of $250 million or more for a Raider’s relocation or be a bit more patient for 1/32nd of $6 billion dollars wired to your bank?
The NHL has targeted $500 million for an expansion fee and they are planning to add only one team to get to an uneven 31. The Vegas franchise is expected to begin play in the 2017-18 season in the new T-Mobile Arena. The NHL last expanded in 2000 with Minnesota and Columbus who each paid $80 million dollar expansion fees. The Vegas franchise has said that they have 14,000 season ticket deposits. It is hard to understand how this franchise will make money when you add up all the factors plus paying back a half billion dollars for the privilege of being the first of the big four sports franchises to play in las Vegas. The NHL Board of Governors are meeting this week and could decide to spin the Vegas wheel.
Las Vegas is not “State of the Art” sports venue heavy.
The brand new $350 million dollar T-Mobile Arena seating has just opened run by AEG and MGM Resorts.
Thomas & Mack Center-UNLV sports
Sam Boyd Stadium-UNLV Football
MGM Grand Garden Arena
Mandalay Bay Events Center
Cashman Field- The only professional team that is currently playing in the neon city is the Triple-A Las Vegas 51s affiliate of the New York Mets.
The Las Vegas Team Burial Ground:
Leagues - MISL, IBL, CFL, RHI, CISL, AFL, UFL, XFL, NASL, ABA, CBA, NPSL, IHL, ECHL.
Football - Cowboys, Gladiators, Locomotives, Posse, Outlaws, Sting.
Basketball - Bandits, Prolyms, Rattlers, Silvers, Silver Bandits, Slams, Stars.
Soccer - Dustdevils, Quicksilvers, Stallions, Strikers, Tabagators
Hockey - Thunder, Wranglers
Roller Hockey - Coyotes, Flash
Las Vegas with population of 2.2 million is the largest city in the country without a major sports franchise. If Vegas is such a safe bet how come none of the Big Four sports has rolled the dice and put a team there.
Ladies and gentlemen place your bets.