Las Vegas Sands Chairman and CEO Sheldon Adelson has walked away from the partnership he largely forged to build a .9 billion domed stadium to bring the Oakland Raiders to Las Vegas. The stadium would also be the home field for the UNLV college football team.
Reports are the billionaire casino tycoon, whose political muscle was instrumental in getting the state of Nevada to fork over $750 million in taxpayer money to fund the 65,000-seat coliseum, was miffed that the Raiders pitched a lease agreement to the Las Vegas Stadium Authority without his buy-in?or even his knowledge.
The Raiders and the Adelson group had been tussling for weeks over naming rights for the team, operation of the stadium, and other issues, according to news reports. Then things broke down entirely when in the midst of negotiations between Adelson and Raiders owner Mark Davis the team’s president, Marc Badain, and Executive Vice President Dan Ventrelle went to the Stadium Authority independently to propose a $1 annual stadium lease and total control of operations, including naming rights for the facility.
Adelson said in a statement he was surprised by the proposal and claimed it “sent shock waves through our community.”
“It was certainly shocking to the Adelson family,” the statement said. “We were not only excluded from the proposed agreement; we weren’t even aware of its existence.
“It’s clear the Raiders have decided their path for moving to Las Vegas does not include the Adelson family. So, regrettably, we will no longer be involved in any facet of the stadium discussion.”
The Raiders issued their own statement, saying they “deeply appreciate the efforts of the Adelson family to bring the Raiders to Las Vegas.”
“We know this project could not have advanced to this point without them,” their statement said. “The Raiders remain steadfast in honoring Mark Davis’ commitment to Governor (Brian) Sandoval and the state of Nevada to pursue relocation to Las Vegas.”
The Adelson family had pledged $650 million to fund the stadium as part of a three-way deal that included a $500 million commitment by the Raiders and $750 million in public bonds backed by a 0.88 percent increase in Clark County’s hotel room tax.
The room tax, which benefits the Las Vegas Convention and Visitors Authority, has long been a bone of contention with Adelson, whose Sands Expo center competes directly with the Las Vegas Convention Center. Some saw the stadium’s public financing as a bid by Adelson to divert room tax money away from the LVCVA. The LVCVA, however, stood to benefit from the tax increase to help fund a $1 billion-plus expansion of the Convention Center. So all sides apparently were happy?except, as it now turns out, Adelson.
On the other side it’s speculated that having secured the support of Sandoval and the Nevada legislature with immense pressure from the Adelson camp, the Raiders weighed Adelson’s involvement with increasing skepticism once negotiations with the tough-minded casino boss turned contentious, which is what appears to have happened, according to reports. It’s been rumored also that the team may have been looking to scuttle the partnership after the National Football League, whose owners must approve the team’s relocation, quietly informed Davis that it was cool to the idea of a casino operator’s involvement. This may have prompted the Raiders to propose a deal they knew Adelson would refuse. And when the team went to the NFL to announce publicly that investment banking giant Goldman Sachs was coming in as a backer, with or without Adelson, the casino mogul reportedly was furious.
The glitch now, however, is that Goldman has pulled out as well, according to news reports, saying its support was contingent on involvement by Adelson, whose publicly traded Las Vegas Sands Corp. is a major customer of the bank.
“Without Adelson, there isn’t a deal,” Los Angeles Times reporter Nathan Fenno said on Twitter last week.
Vince Sapienza of Las Vegas TV station KVVU confirmed the news after reportedly speaking with Goldman Sachs representatives.
“(Sachs) had deal to finance LV stadium with Adelson and Raiders,” Sapienza reported. “With no Adelson, no deal.”
Plans for the stadium also include hosting other major sporting events, concerts and other events too large for existing Las Vegas arenas.
Some experts suggest that part of the deal between Davis and Adelson called for Adelson buying a piece of the team once the move has been made. Davis was resistant to that suggestion, observers say, which could have precipitated the bad blood.
And then in his annual press conference in the run up to last week’s Super Bowl, Commissioner of the National Football League Roger Goodell was asked about possible ownership by casino operators.
“I don’t see an ownership position in a team from a casino,” Goodell said. “That is not something consistent with our policies. Not likely a stadium either.”
Goodell’s statement didn’t slow speculation that perhaps the owners of Station Casinos, Frank and Lorenzo Fertitta, might step into the vacuum left by Adelson’s departure. The brothers are football fanatics, with a stadium named after them at national high school football powerhouse, Bishop Gorman of Las Vegas. They reported pulled to strings to get former Gorman coach Tony Sanchez named to lead UNLV two years ago. And both are rolling in dough after selling Ultimate Fighting Championship, a company they bought for $2 million, to a Japanese conglomerate for $4 billion last year. Neither Fertitta commented on the speculation last week.
The Raiders, in the meantime, have already applied to the NFL to relocate the team to Las Vegas. The owners are expected to vote on the request in March. Twenty-four of the 32 owners must vote yes for the move to go through.
Steve Sisolak, chairman of the Clark County Commission, reported himself “very disappointed, very disappointed” upon learning that Adelson had withdrawn.
“If (the Raiders) have a Plan B, I’m not aware of it, and the owners meeting is coming up in two months.”
Stadium Authority Chairman Steve Hill said his group “will continue to work with the Raiders organization to fulfill the authority’s responsibilities as set forth in the Southern Nevada Tourism Improvements Act. In doing so, the authority will continue to ensure the stadium project is developed in a manner consistent with the clear direction of Nevada lawmakers.”
Sandoval’s office issued a similar statement, saying the state remained committed to the project and the Raiders.
“The terms of the legislation do not change, and the state’s contribution will not increase as a result of this announcement,” the governor said. “I am hopeful that the Raiders are working to secure the additional funds that would have been provided by the Adelson family.”
Under that legislation, the Stadium Authority has until mid-2018 to attract an NFL team to the planned venue. If a team is not secured by then, the authority would be dissolved and the University of Nevada, Las Vegas, whose collegiate football team is to share the venue, would be required to deliver notice to the governor of their intent to build a smaller stadium for their team. UNLV officials would have two years to raise $200 million toward the smaller stadium, and tax revenue generated by the increased hotel tax would be dedicated to that effort instead.
“At a minimum, we have set up a framework and funding source for building a stadium for UNLV,” Sandoval said. “The process in place outlines that the Stadium Authority board will continue to evaluate stadium site locations and development plans and vet all operating agreements.”
