American professional sports leagues are going to weather the COVID-19 crisis — at least through 2020. Revenue for most major organizations well outpaces expenditures. The question was so much whether they could stay afloat, so much as how much risk they needed to take to stay profitable during a pandemic.
One exception to this dichotomy could be the Las Vegas Raiders. The longtime Oakland squad was already taking a big risk in moving their team to Las Vegas, with all the stadium-building and broadcasting instability that comes with such a move.
On top of all that, they’re landing into the uncertain terms of a pandemic shutdown season, with no ticket sales to bolster their earnings. Could the Raiders be the most at-risk NFL team in 2020?
The terrible timing of the move to Las Vegas
At the start of the pandemic, there was some question that the Raiders’ Vegas move would be dashed entirely. Their $1.9 billion stadium deal still got pushed through, and construction remains underway. The largely outdoor work was not particularly slowed by social distancing requirements. The checks are cashed, and the Raiders appear on track to play in the new Allegiant Stadium this fall.
Clearly, they couldn’t have picked a worse year for the move. The NBA bubble, difficult as it was to set up, has proven to be a major success. Meanwhile, the NFL is, as of this writing, going with a model more like the one that has nearly failed MLB.
Teams with multiple COVID-19 positive tests have seen weeks-long disruptions, throwing the entire season in doubt. Teams like the St. Louis Cardinals missed over two weeks of play, Yahoo! Sports reports. That’s in the context of 60 regular season baseball games. Lengthy absences from play on that level would devastate NFL standings.
Estimated losses for the Raiders are over half a billion dollars
As Forbes reports, the biggest problem for the Las Vegas Raiders is one they can’t do much about. In-person attendance is impossible, given the state of the pandemic throughout much of the United States. The lost revenue is hitting every team, but the $571 million in estimated losses lands harder after that aforementioned $1.9 billion stadium bill.
The Forbes report also points out that the entirety of the NFL is looking at $5 billion in losses over a lack of fan attendance. This implies that the ticket prices in Las Vegas in particular were meant to shore up the construction bill almost immediately.
The next several years for the new Vegas team should prove to be a financial tangle to manage. The situation is far more acute than most teams for more reasons than the move, however. The unique status of the owner puts it all in a different light.
Can Las Vegas Raiders owner Mark Davis weather the losses?
The Las Vegas Review-Journal reports that Las Vegas Raiders owner Mark Davis is personally worth $500 million. That number obviously isn’t anywhere near poor, but most NFL owners are well in the billionaire range. Davis lacks the financial leverage that many of his competitors will retain regardless of the issues caused by one year without fans.
Unlike most owners, Davis needs the Raiders to run at a large profit to keep his many creditors at bay. There is no going back for 2020. Construction progressed to the point where it is now ready for both players and fans, even if no fans are in sight.
If the pandemic status quo stretches for too long, affecting 2021, Davis may have to take extreme measures to keep the Raiders afloat without selling.