The Las Vegas Raiders are set to lose $571 million in ticket revenue after announcing they will not … [+]
Getty Images
It’s the unintended consequences of the ongoing COVID-19 pandemic and the economic downturn that has come with it. NFL teams facing the real possibility of hosting games during the 2020 season without fans in attendance. With this comes revenue losses we have not seen in the modern history of sports.
This is no more true than in Las Vegas where the Raiders are set to open up their inaugural season in the desert metropolis. The Raiders announced earlier this week that they will not have fans in attendance at Allegiant Stadium off the Vegas strip.
“There is nothing more important to the Raider Organization than the health and safety of our players, coaches, staff, stadium workers and fans,” the club said in the statement, via the NFL’s official website. “After intensive consultation with healthcare officials and state and community leaders, we have made the difficult decision to play the Las Vegas Raiders 2020 inaugural season at Allegiant Stadium without fans in attendance.”
Much like the multi-billion dollar Southern California venue, the revenue fall out from not being able to host fans at new stadiums is going to be absolutely huge.
According to Ticket IQ, the Raiders are set to lose a whopping $571 million in ticket revenue this coming season alone. This is startling in every imaginable way. That’s especially true given that Raiders owner Mark Davis is not among the wealthiest at his position in the NFL. The son of the late-great Al Davis, he’s said to be worth a mere $500 million. To put that into perspective, Forbes estimates that Dallas Cowboys owner Jerry Jones is worth a cool $8.7 billion.
A team that relied on outside investors and local tax revenue to help foot the bill for the $1.84 billion Allegiant Stadium, the Raiders are not in the same standing as other big-market NFL teams with wealthy owners.
The NFL itself is expecting to lose $5 billion in revenue this season if games are playing without fans in attendance. That’s a broader example of the economic situation around the league right now.
Per the league’s restructured collective bargaining agreement with the NFLPA, this is going to have wide-ranging ramifications on the salary cap moving forward. The two sides agreed that this season’s salary cap would remain unchanged at $198.2 million. Though, it could be as low as $175 million in 2021 depending on league-wide revenue stream this fall and winter.
Interest in the Raiders’ brand in Las Vegas has been huge. (Photo by Ethan Miller/Getty Images)
Getty Images
This is especially difficult news for the Raiders given the interest in their brand in Las Vegas. The Raiders sold out their 2020 tickets all the way back in May. Meanwhile, they had seen a record revenue stream as it relates to personal seat licenses (PSLs). That can now all be thrown out the window.
These latest developments certainly paint a bleak picture for both the Raiders and the broader NFL heading into a 2020 season that could also be on very thin ice given the current status of the pandemic in the United States.
As we have seen around the Major League Baseball world, attempting to play a season outside of a bubble has proven to be an issue. While there’s been some reports that the NFL is looking to potentially play the season in a bubble-like atmosphere much like the NBA and MLS (in Orlando) and the NHL (in Canada), logistics just don’t favor that. After all, we’re less than five weeks from the start of the 2020 regular season.
We can expect the NFL to get creative when it comes to creating more revenue for the 2020 season. How that might look is anyone’s best guess, but it will have wide-ranging ramifications for a Raiders team that was seemingly ready to take Vegas by storm less than a calendar year ago.
Such is the nature of the beast amid the current economic uncertainty around the world.
