Getting answers: Can the A’s afford a move to Las Vegas?
LAS VEGAS, Nev. (FOX5) - A source tells FOX5 a joint statement on negotiations with the Oakland A’s could come as soon as Wednesday. It comes after lawmakers reportedly reached a loose, verbal agreement with the team to finance a ballpark in Las Vegas. The plan is to build at the site of the Tropicana Hotel.
A source at the table says the state is offering $180 million in the form of tax breaks and bonds. That’s on top of $125 million in bonds and $25 million in direct funding Clark County would be expected to kick in. Some lawmakers want Clark County to split financing evenly.
Altogether, that leaves a $65 million gap between the $330 million on the table, which accounts for 22% of the estimated $1.5 billion it would cost to build the stadium, and the $395 million the A’s have said they want. The question becomes: can the A’s swallow that gap?
In order to answer that question, we first need to understand how the franchise handles its money.
According to publicly available data, since buying the team in 2005, John Fisher has seen revenue rise by more than 50%. Looking at just the last decade, the team’s average payroll has accounted for a third of the team’s average revenue. Compare that with the rest of the league, which spends more than half its revenue on player salaries on average.
It should be noted that half those seasons have ended in a winning record for the A’s, attesting to the front office’s experience in putting together a winner with low payrolls.
With the knowledge that Fisher has been able to save substantial amounts of money by keeping payroll low, the question then evolves: will that extra money Fisher has saved be enough to bridge the $65 million gap between his request and Nevada’s proposal of 22% public financing and funding?
Without a clear answer to that question, we can get hints at how manageable that 22% is by looking at the other big stadium project in the Las Vegas Valley.
When the Raiders got $750 million in public financing to cover the cost of Allegiant Stadium, it meant the public was footing 40% of the bill for the project. That money came from bonds and a hotel tax.
The 22% share of public financing on the table for the A’s is not only less than what the Raiders got, it’s also less than almost every other modern Major League ballpark.
In the last 25 years, MLB teams have built 18 new stadiums. Only two of them have been financed with less than 22% public financing: Yankee Stadium in New York and Oracle Park in San Francisco. The median percentage of public financing for MLB stadium construction in that time span is 67%.
The bulk of that financing usually comes from municipal and county bonds, similar to Nevada’s proposal. There are several teams that used money from hotel taxes, like the Raiders did, plus sales and car rental taxes.
T-Mobile Arena, another major sporting venue in the Valley, received zero dollars of public funding or financing.
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