NFL VP Eric Grubman sheds light on meeting with Oakland/Lott Group

While the Oakland Raiders keep plugging away at their plan to relocate to Las Vegas, the city of Oakland is trying to put together a stadium plan to keep them in the Bay Area.

And on Monday, they filled the Raiders and representatives from the National Football League in on the details.

It comes in the form of a $1.3 billion stadium plan Oakland and the County of Alameda have been working on with former NFL great Ronnie Lott, who has partnered with money management firm Fortress Investment on a development deal on the 105 acres on which the current Raiders stadium sits.

You can read more about the plan from the East Bay Times here.

According to multiple league sources, there are significant issues with the proposal in that it puts a third party developer between the Raiders and the land and that stadium and infrastructure funding will lean on NFL driven revenue.

The NFL has long maintained to Oakland and other cities it looks unfavorably on stadium deals in which its teams take a secondary place behind third-party real estate developers. That was a major issue with the NFL in last year’s failed effort in Oakland backed by Floyd Kephart.

It also has issues when public contribution toward infrastructure and stadium construction relies on revenue generated by the presence of the team. For example, a bond that will ultimately be paid for by new taxes on the stadium such as the one Oakland is proposing.

“The Raiders revenues will underwrite the infrastructure,” said an NFL source. “That is an issue because there are currently no such taxes.”

Or, as a high-ranking NFL executive described it: “That’s not a contribution, that’s a loan.”

The NFL was represented at Monday’s meeting by league vice president Eric Grubman, who agreed on Tuesday to share his impressions.

Grubman will be in Dallas on Wednesday as NFL owners meet to discuss, among other things, the Raiders plans to relocate to Las Vegas and where the Chargers stand in San Diego or the option they hold to join the Rams in Los Angeles.

Q: You met yesterday with Oakland reps and the Lott group. From a league perspective do you feel they have a proposal in place the NFL deems on the right track to being viable?

EG: It is important to understand that there is no proposal on the table to the Raiders. The term sheet represents the basis under which Fortress/Lott would gain an exclusive right to complete their negotiation with the city and county.

Q: Based on what you heard and saw, would you advise the Raiders to pursue this deal?

EG: No comment.

Q: If not, what are the issues the NFL has with the proposal?

EG: There are several major unknowns, including a plan for the A’s, the timing of construction, and the financial basis on which Fortress would put in hundreds of millions of dollars.

Q: Have you advised Oakland and the Lott group to make any adjustments?

A: We did not negotiate yesterday. The meeting was requested in order for them to describe their initiative.

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  • bigben_usa

    This all means that there is not going to be a stadium solution for the Raiders for some time. The reality is that the Raiders simply do not have any great clear options. The Vegas deal offers public funding but does the NFL really want Adelson as a business partner? In addition, the long term viability of the Vegas market is still hotly debated. The NFL would probably prefer to take a conservative approach and see how the NHL develops there first. The Lott headed deal in Oakland sounds complicated from the traditional owner to city relationship that the NFL prefers. But one can argue that Lott and Wesley Edens (the head of Fortress Investments and owner of the Milwaukee Bucks) is probably a less controversial partner than Adelson. Also, the Bay Area is one of the nation’s three most attractive markets and the NFL has been pretty clear about wanting the Niners and Raiders there. The last and least like lily scenario that some Raiders fans in LA dreams about is the Raiders joining the Rams in Hollywood Park. But anyone with an econ 101 background knows that the league is unlikely to want 3 teams in a SoCal market when the Rams needs time to rebuild their presence and the Chargers stadium issue is even more challenging than the Raiders. From the league perspective, the Raiders have a wild card option in Levis Stadium as the NFL mandated the stadium can accommodate two home teams when it was constructed. While no one can force Davis to move into Levis, but such potential and the reality of the Bay Area market limits other options for the Raiders. Kicking the can down the road seems like the most likely outcome for the foreseeable future.