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If the Raiders move to Vegas, does it help the Chargers stay in San Diego?

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Catching up on some of the big Raiders news regarding a potential move to Las Vegas, and how it could impact the Chargers’ attempts to stay in San Diego past 2017.

Here's the deal.

There's not much to report in San Diego. What we see now during the San Diego Chargers' signature gathering drive is an extension of the San Diego political scene we've seen for much of the last ten years.

Further, the Chargers are pursuing a Citizen's Initiative. This means they don't need (but would prefer, obviously) support from anyone except the voting public.

So, let's ignore the new frosting on the same molded cake for now and instead take a look at what's happening in Las Vegas with the (now Oakland) Raiders.

The Raiders of the West

If you all recall, the relocation vote back in January which was won by the (now Los Angeles) Rams and owner Stan Kroenke gave the Chargers and Dean Spanos the first bite at sharing the Los Angeles apple.

Essentially, the deal was that the Chargers have the first option to move to Los Angeles, but would need to invoke that option by January 2017, unless:

  • The Chargers get approval on a new stadium in San Diego, without any court challenges. In this case, the option to move to Los Angeles defaults to the Raiders in 2017.
  • The Chargers get approval on a new stadium in San Diego, but the deal is challenged in court. In this case, the Chargers receive a one year extension of their option, in the event, the project is stalled indefinitely by lawsuits or defeated outright. The Raiders would not get their chance at Los Angeles until 2018 in this case.
  • The Chargers simply allow the option to pass with no deal in San Diego.

However, now that Davis has set his sights on Las Vegas, it might not matter.

On April 28th, Davis announced he would commit $500 million to a potential $1.4 billion stadium in Las Vegas. Of the remaining $900 million; $150 million would come from the Las Vegas Sands Corporation owned by Sheldon Adelson and Majestic Realty owned by Ed Roski (who once pitched the plan for a stadium in City of Industry). The other $750 million would come from Nevada tourism tax revenues, either via increase or diversion from other uses, by vote of the Nevada State Legislature - which could happen as early as August if a special session is called.

It's worth noting that Las Vegas Mayor Carolyn Goodman (wife of former Mayor Oscar Goodman - former attorney for Frank "Lefty" Rosenthal, who was the inspiration for Sam "Ace" Rothstein in Casinohas indicated that if Oakland keeps the Raiders in the East Bay, the Chargers would be the next team of interest for Las Vegas.

If a deal is struck in Las Vegas, it would require approval from 24 of the NFL's 32 owners. Dallas Cowboys' owner Jerry Jones spoke in favor of the move while New York Giants' owner John Mara spoke against it back in March.

Here's the thing for me: the old guard owners hate the gambling element while the new guard simply wants to maximize revenue. If the Nevada Legislature approves a deal with $750 million in public financing, I simply can't see 24 NFL owners leaving that money on the table - unless the NFL is that desperate to force Davis out.

Also, I think a lot of owners recognize having a team in Las Vegas is a win-win. This is my supposition, but it seems that if the Raiders perform well, games are sold out, and ticket prices are driven super high by people traveling to see a contender playing in Vegas for a sports weekend, especially Sunday night football games and playoff games. If the Raiders struggle, tickets are still bought by people traveling to Vegas to see their team play for a sports weekend. Having a national brand like the Raiders in Las Vegas only adds to the appeal.

The downside... you think Sunday night travel from Las Vegas to Los Angeles or San Diego is bad now? Just imagine adding several thousand football fans to that commute.

How this Could Impact San Diego

If the Raiders secure a deal to move to Las Vegas, the Chargers (and San Diego) potentially get the luxury of pursuing more than one stadium deal.

In other words, if the Chargers' Citizen's Initiative fails to qualify for the ballot, or fails to pass in November, the team and City theoretically might still have one year to work out a deal before having to make a final decision. Such a scenario might take the "convadium" off the table completely - which would please San Diego's political establishment to no end (unless the Citizen's Plan passes).

* The original deal parameters for Los Angeles were that the Rams could not begin making money from the Inglewood Stadium (e.g. PSLs, naming rights, luxury boxes, etc.) until February 2017, unless an agreement was in place with a partner/tenant before that point. Which means the Chargers do run some financial risk if they chose to stay in San Diego beyond 2016 without a stadium solution in place.

On the other hand, here's how an additional year on the Los Angeles option could benefit the Chargers:

  • Keeps the Chargers in their financially agreeable (for them) arrangement at Qualcomm Stadium.
  • Reduces the amount they'd have to pay the City to exit their current lease.
  • Saves them the trouble of finding a temporary home in Los Angeles until necessary.
  • Saves them from having to pay the relocation fee and moving expenses until they can realize revenue closer to when the Inglewood Stadium is completed.

However, if the Chargers' Citizen's Initiative fails, the NFL could just be done with San Diego and refuse to extend the option, forcing Spanos to take his chances in Los Angeles with the Rams. At this point, it's conjecture.

In Closing

Mark Davis taking the Raiders to Las Vegas seems to be a shrewd business move. If he can secure the public financing, I am of the opinion the NFL owners will vote to allow him to relocate to Las Vegas.

Assuming the Chargers' Citizen's Initiative fails, the Raiders moving to Las Vegas potentially helps the Chargers and San Diego if the NFL extends the Chargers' option to join the Rams in Los Angeles by another year. The Chargers save money staying in San Diego for another season, and San Diego's political establishment gets another chance at a stadium deal, possibly without the "convadium" element.

Of course, it's also possible the NFL tells Spanos to "shit or get off the pot" regardless of what the Raiders do in Las Vegas, and decide against extending the Chargers 1-year option to go to Los Angeles.

We'll know more once the fate of the Raiders' Las Vegas plan is decided.

* Hat tip to Beau Lynott (@lemonverbena) for pointing me toward an article with more accurate information. Post has been updated from its original material.