Las Vegas

Las Vegas Stadium Authority: Latest Meeting Decoded

Marc Badain’s status update on the Las Vegas Raiders lease

After two hours of legal talk by Mark Arnold, the attorney for the Las Vegas Stadium Authority, most of you were probably drooling on your keyboard if you were still watching or watched the meeting at all. Fear not, the Winter Reporter is here to chop this up and make it more palatable for the layman, or woman.

Raiders Vice-President, Marc Badain, started off by thanking the Adelson family, Governor Brian Sandoval, and Commissioner Steve Sisolak. Governor Sandoval was following my live tweets and liked that quote from Mr. Badain, so that comment did not fall on deaf ears. Well done Mr. Badain.

So let’s dive into the nitty-gritty here, shall we? First, here is a link to the lease. Please understand that the lease is about 75% complete, and still just a draft. However, if you like noodling contracts like I do, feel free. The first thing that jumps out is the term StadCo. Thankfully, its human nature to shorten things, and StadCo is short for Stadium Events Company. For those who do not remember or know, StadCo will be owned wholly by the Raiders as its own LLC.

StadCo revenue is also the collateral for the $850 million dollar Bank of America line of credit. This is called financial factoring, which uses accounts receivable as collateral for a loan. Now, before you get your knickers in a wad, the line of credit number had to be almost 25% above what was expected to be used. This is to satisfy the Las Vegas Stadium Authority (LVSA). Based on a few people I have spoken to close to this, the Raiders are expecting to use only half or less of that LoC.

The Raiders are paying nothing for rent in Las Vegas, or are they?

The biggest thing that has really bugged out some people is the “zero” rent terms. It’s indeed true that the Raiders will not pay a yearly sum for use of the stadium, but they’re paying all that up front. $900 million dollars plus, roughly.

You see, the owners of the stadium and land will be the LVSA, IE: the Tax Payers of Nevada. So that $900-plus million is basically the Raiders lease payment in one, upfront, lump sum. Let’s spread that out shall we:

  • 30 years would be $30 million+ a year
  • 40 years would be $22.5 million+ a year
  • 50 years would be $18 million+ a year.

As you can see, the longer the Raiders stay at the stadium, the better their return on their investment becomes.

Speaking of which, the minimum term is 30 years. Likewise, sources the Raiders are also negotiating the option years. It’s expected, but not guaranteed that these will be four, maybe five-year options for the StadCo.

Another issue that is still being negotiated is the “No Move” clause. However, it’s in the Raiders interest not to move. Not only that, but Bank of America is also expected to have their own “No Move” agreement with the Raiders until the loan is satisfied. There’s the standard “NFL Premium Venue” escape clause, but for better or worse, the Raiders would have to be hard pressed to enact it.

Contractual structure laid out

Another interesting tidbit to be presented at the meeting was a picture outlining the structure. This is a concept picture only, but it does a good job explaining how this deal is being structured.

So now let’s break down the different entities here:

  1. The LVSA is the government entity that will own the Stadium, collect the room tax, collect the taxes from the stadium revenue, issue the stadium bonds, and enter into a contract with the StadCo.
  2. StadCo is a LLC that will be owned by the Raiders, enter into a lease agreement with, the Raiders, NFL, UNLV, and other event entities. It will also act as the defacto developer for the site.
  3. The Raiders are an NFL team that will lease the stadium from the StadCo.
  4. UNLV football is the local university that will lease the stadium from the StadCo, however those terms are still being negotiated. The fee will be operations cost only as detailed in Nevada Law SB-1-2016.

There is another thing to note here; Mr. Arnold said that if the StadCo was in breach of contract with UNLV, it would automatically put them in default with the LVSA. That is a huge concession by the Raiders, and fantastic for supporters of UNLV football.

Various notes and sundries

The LVSA will be able to request the Raider financials for audit purposes, but must sign a confidentiality agreement. Again, this is a very important agreement as the 49ers and Santa Clara are currently in a lawsuit over this very issue.

Neither the Raiders, Stadium, nor any physical property owned by the team or LVSA is securing the BofA loan.

Arnold talked about this lease needing five or six months to wrap up. However, Chairman Steve Hill quashed the suggesting that if there was a deadline the lease could be done in 4 days, if that was the deadline. In fact, Chairman hill stressed a quicker resolution by suggesting a deadline to be discussed at the May 11 LVSA meeting.

On a personal note, I have spent enough time around attorney’s discussing contracts to come to the opinion that Mr. Arnold was a fantastic hire by the LVSA. His firm’s unique experience in stadium contracts has been apparent in these meetings. Also, it is clear to me that both the Raiders and LVSA are working diligently to get this lease knocked out.

There is more to this agreement yet to come, and I will report and clarify this as more is hammered out.

As Governor Sandoval has said, “This is a win for everyone”

So far, I concur.

Stay tuned to for all your latest updates on the stadium deal and relocation news, and if you haven’t done so then please feel free to check out Scott’s previous work on the relocation saga.

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