As the Raiders move closer to their relocation to Las Vegas, it appears they’ve already hit the jackpot.
The franchise’s value has increased nearly $1.5 billion since talks heated up in 2016 to uproot the team from Oakland, California, and move it to Southern Nevada.
Following that increase the Raiders came in as the 12th-most-valuable NFL team in Forbes’ annual NFL team valuation rankings list released Wednesday, with a reported value of $2.9 billion. Forbes reported the franchise was worth $1.43 billion in 2015 — ranking 31 out of 32 NFL teams — before relocation talks to Las Vegas began.
Raiders owner Mark Davis said the team catapulting up the NFL team valuation list from the bottom to near the Top 10 is the result of long hours put in behind the scenes.
“I think being (ranked 12th) is a testament to all the people working so hard in our organization, beginning with (team president) Marc Badain,” Davis said Wednesday. “They’ve all done a wonderful job getting us to this point. The only way (rankings) would really mean anything to me is if I was looking to sell the team, and I’m definitely not selling it.”
Displaying what that hard work has done with regard to Las Vegas, the organization’s worth increased 20 percent in the past year alone, adding $480 million in value over that time.
Michael Ozanian, the Forbes executive editor who created the publication’s sports team valuation lists, said the under-construction, $1.9 billion Allegiant Stadium and sponsorship deals tied to it played a big role in the surge. Last month’s deal with Allegiant Air becoming the naming rights partner with the Raiders and the stadium is estimated to be worth around $20 million per year for 30 years.
The success of personal seat license sales for the new stadium, which allowed the Raiders to add $40 million in additional upgrades to Allegiant Stadium, also made an impact, Ozanian said.
“To group it all into one category, the selling of their inventory is going really well,” Ozanian said. “It looked like they’re moving to getting off to a really good start in the new stadium in terms of revenue.”
The Dallas Cowboys again led the league in team valuation with a value of $5.5 billion this year, a 10 percent bump from 2018’s $5 billion mark. The Buffalo Bills at $1.9 billion were again dead last in the team value rankings despite adding 19 percent to their worth in the last year.
With more founding sponsorship deals slated to be announced in the coming year, the team’s value should surpass $3 billion before they kick off the first game in Allegiant Stadium, Ozanian said.
“I think by the time they move in based on the new revenues that they’ll have at the stadium, it’ll probably be greater than $3 billion,” he said.
Before last year Ozanian had questions with how the Las Vegas market would react to Raiders’ personal seat license and season ticket sales. But already-strong PSL sales leading to unplanned upgrades at the stadium even before a single fan steps in the building indicate the Raiders should do well in their new home.
The success of the Golden Knights in their first two NHL seasons in Las Vegas is a further sign of good things to come for the Raiders.
Though Allegiant Stadium can fit almost four times the number of fans for a single Raiders game than T-Mobile Arena for a Knights game, there are far fewer home games in the NFL for fans to pack the stadium, Ozanian said.
“I wasn’t sure at all the NHL would go over as big as it has in Vegas, so I suspect if hockey could do well there, it points to the fact that football should do very well,” he said. “It’s easier to sell football in the aspect you only have eight regular season games, so each game is an event. Hockey is tougher in a sense because you have 41 home games during the regular season.”
With the honeymoon stage of having a new professional sports team and world-class venue expected to wear off in three to five years, it will be interesting to see if the success of the Raiders is sustainable, Ozanian said.
A big driver to keep that momentum will be winning. When a team is winning, fans are more engaged. If the Raiders don’t turn around their recent history of missing the playoffs, it could prove negative to their valuation.
Richard Sheehan, professor at Notre Dame’s Mendoza College of Business and a sports economics expert, said he isn’t sure Las Vegas will adequately support an NFL team if it’s not winning.
“When the novelty (of a new team and stadium) wears off, after about three years if you’re not winning, fans are only going to the stadium for the experience so many times, so winning helps a lot,” Sheehan said. “If you don’t put a good product on the field, the honeymoon doesn’t last so long.”
Davis believes the organization will fare well in Las Vegas.
“I think (12th) is a ranking based on where we stand right now,” he said. “I don’t think the potential value of the franchise for what it’s going to be once we get to Las Vegas has come close to being realized yet.
“Las Vegas is Las Vegas and the Raiders are the Raiders, and we always want to be No. 1.”