The Oakland A's Are Moving To Las Vegas

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Today At A Glance:

The Oakland A’s have announced their intention to move to Las Vegas. So today’s newsletter breaks down everything you need to know, including the backdoor business deal that destroyed the team and the $1.5 billion financials behind their new stadium.

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Friends,

The Oakland A’s are officially moving to Las Vegas, announcing last week they have entered into a binding agreement to purchase 49 acres of land off the Las Vegas strip.

They are paying Red Rock Resorts — owned by former UFC owners Frank and Lorenzo Fertitta — $225 million for the land. It is located just one mile north of Allegiant Stadium (home of the Raiders), and one mile west of T-Mobile Arena (home of the Golden Knights), and construction on a new stadium will start next year.

The stadium is expected to cost $1.5 billion, with $500 million in public funding.

It will include 30,000 to 35,000 seats and a partially retractable roof. And Oakland’s management team has even asked Elon Musk’s The Boring Company to include a future stadium stop as part of their underground Las Vegas tunnel.

But that’s only the beginning when it comes to the A’s decision to leave Oakland.

The real story involves a backdoor business deal, decades of secretive planning, millions of dollars saved, and a fanbase left in disarray (for the 3rd time in 4 years).

The Golden State Warriors are a first-class organization. They have won four NBA championships in the last eight years. They recently opened a brand-new $1.4 billion arena in San Francisco, and the team’s valuation has increased by more than 1,500% — from $450 million to $7.5 billion — since Joe Lacob and Peter Gruber’s purchase in 2010.

NBA’s Most Valuable Teams (via Spotico)

1. Golden State Warriors: $7.5 billion

2. New York Knicks: $6.6 billion

3. Los Angeles Lakers: $6.4 billion

4. Chicago Bulls: $4.1 billion

5. Boston Celtics: $3.9 billion

Of course, Stephen Curry, Steve Kerr, and Bob Myers played a role. But everyone in and around the sports business knows the operational expertise of their executive team is what really sets them apart. And this should’ve been true for the A’s, too.

That’s because Joe Lacob initially tried to buy the Oakland A’s when the team went up for sale in 2005. “It was a done deal,” Lacob told the San Francisco Chronicle last year.

But then MLB Commissioner Bud Selig came over the top and shut down the deal.

Instead, Commissioner Selig unilaterally awarded the team to Lew Wolff and John Fisher. Wolff and Selig were fraternity brothers in college, and despite several higher bids, the other owners knew Wolff and Fisher would be on their side in any disputes.

And this started a vicious cycle that eventually led to the destruction of a great franchise.

(Image: Oakland Athletics owner John Fisher)

The Oakland A’s have made the playoffs in 7 out of the last 18 years (38%), and they have a better winning percentage (.505) than half of MLB teams over the last 20 years.

But their opening day payroll last year ($32 million) was 42% below their opening day payroll in 2005 ($55 million) — despite the league average nearly doubling over the same period, from $72 million in 2005 to $135 million in 2022.

Oakland A’s Opening Day Payroll

• 2005: $55 million

• 2022: $32 million (-42%)

Average MLB Opening Day Payroll

• 2005:$72 million

• 2022: $135 million (+88%)

And this lack of investment has ruined their on-field product. For example, the A’s have let good players, like Matt Olson, Matt Chapman, Marcus Semien, and Sean Murphy, leave in trades or free agency. The New York Mets 2022 luxury tax bill ($111 million) is nearly 3x their entire 2023 opening day payroll ($43 million), and the A’s are currently on pace to set one of the worst run differentials in MLB history.

And the craziest part is that the situation is somehow 10x worse off the field.

Oakland’s current stadium, the Oakland Coliseum, is nearly 60 years old and one of the worst ballparks in baseball. The stadium’s lights have gone out during games. Players frequently complain about the field condition. There have been possums in the locker rooms, and raw sewage has even filled the dugouts and umpire clubhouses.

And when you combine the crumbling Oakland Coliseum with the ownership’s unwillingness to invest in the team, the city of Oakland and its fans have given up.

The A’s ranked dead last in MLB attendance last year, with an average of 9,849 fans attending home games. That was the lowest full-season average since 1979, and the team’s own AAA affiliate in Las Vegas outdrew them on several occasions.

MLB Average Attendance 2022

1. LA Dodgers: 47,672

2. St. Louis Cardinals: 40,994

3. New York Yankees: 40,208

4. Atlanta Braves: 38,641

5. San Diego Padres: 36,882

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30. Oakland Athletics: 9,849

So Major League Baseball and its highest-ranking executives have been asking the A’s to explore a new stadium since the late 2000s — but it hasn’t gone as planned.

The A’s have explored several new stadium options over the last decade, including Bay Area cities Fremont and San Jose, and even a $12 billion waterfront project in Oakland.

But for one reason or another, none of them have progressed. Now, it takes two to tango — but it’s not like the city of Oakland wasn’t trying to keep the team.

For example, Oakland spent years making concessions with the Athletics, fighting lawsuits from shipping companies that protested the Howard Terminal waterfront project, and the city even spent hundreds of millions of grant dollars on off-site infrastructure to support the eventual ballpark and surrounding real estate.

But many people believe relocating to Las Vegas was the A’s plan all along.

"At every opportunity, the A's have made increasing demands on Oakland, and at every opportunity we have risen to the challenge and overcome the hurdles placed before us,” Oakland Mayor Shen Thao told reporters last week. “Instead of working with us, they have announced a land deal in another city. And I want to be very clear, this announcement happened mid-negotiations, and it shows they had no interest in making a deal with Oakland at all." 

So now the A’s will turn their full and undivided attention toward Las Vegas.

(Image: The Las Vegas Aviators Ballpark)

Construction on the A’s new stadium is expected to begin next year. But with the opening not scheduled until 2027 at the earliest, the A’s have already mentioned their ability to share a stadium with their Las Vegas-based AAA affiliate in the meantime.

MLB Stadiums By Seating Capacity

1. Oakland Coliseum: 56,782

2. Dodger Stadium: 56,000

3. Coors Field: 50,144

4. Chase Field: 48,686

5. T-Mobile Park: 47,929

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31. Las Vegas Ballpark: 10,000

And while the attendance numbers in Oakland have been terrible, they should get a bit better in Las Vegas. The Raiders operate at 97% capacity throughout the season, and the Golden Knights operate at 103% (because of standing-room-only tickets).

And when you add in the fact that a 35,000-seat ballpark would be one of the smallest in MLB, a change of scenery (and increased payroll) could do wonders for the team.

Still, it’s hard to imagine why the A’s deserve to make this move. Las Vegas has added three professional sports teams over the last five years — Raiders, Golden Knights, and Athletics — and it appears the locals (and tourists) have an appetite for more.

But A’s owner John Fisher has been nonexistent over the last 15 years — he doesn’t ever talk to the media and didn’t even show up at the press conference when he purchased the team. So it’s hard to imagine that type of attitude will ever change.

I hope everyone has a great day. We’ll talk on Wednesday.

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Huddle Up is a 3x weekly newsletter that breaks down the business and money behind sports. If you are not already a subscriber, sign up and join 100,000+ others who receive it directly in their inbox each week.

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