Al Davis Must Weigh Profit vs. Control In LA Move

This morning, Profootballtalk reported AEG has spoken to five teams about purchase and relocation to Los Angeles. One of the five teams is the Raiders.

The Raiders are one of many teams needing a new stadium, something being offered in the deal to move to LA. Any team moving to LA would be set up handsomely in regards to corporate sponsorship and future revenues.

With uncertaintly and the likely demise of many of the revenue sharing provisions of the past decade, large media markets become that much more important for profit generation in the NFL.

Los Angeles has an ability to attract top players and that would certainly help the product on the field as well.

Al Davis and any team needing a stadium would be crazy not to jump at the chance to move to Los Angeles, if it wasn’t for one significant detail. Control.

AEG, the company behind the Los Angeles stadium plans wants to purchase majority interest in the relocating team.

As we all know, the NFL is a lucrative business and relinquishing majority interest in an NFL team moving into the second largest media market is going to be difficult.

Of course, Al Davis doesn’t own the majority interest of the Raiders today, but he owns 100% of the controlling interest in the Raiders.

If AEG wants to move a franchise to Los Angeles and have control of that franchise as well, Al Davis is not likely very interested, bu they might be willing to accept less.

Al Davis leaves Amy Trask to control the business half of the Raiders and if AEG seeks a non-conrolling interest or control merely of the business side of team operations, he might be inclined to entertain an offer to move.

Al Davis enjoys control of the Raiders from a minority stake, because the other people who own part of the Raiders are splintered and fractured and disorganized. Many are likely even elderly.

If AEG were to attain even a non-controlling majority stake, Al Davis would be at risk of AEG challenging for controlling interest.

Given Al Davis’ age and without a successor on the football side of team operations, the Raiders would be attractive option for AEG, who within a decade or so may be able to attain control of the team.

By waiting a few years, AEG may be able to get its hands on a team that would otherwise be so lucrative no one would sell it.

AEG would have to convince Los Angeles to take Al Davis back, something that may be a tough sell after their previous dealing with the iconic owner.

Still, the Raiders have an established fan base in Los Angeles and one that is extremely mobile as well which may give the Raiders an edge over teams like the Chargers and Rams.

Given the economics, it makes good sense for Al Davis to explore a move back to LA. The heart of the Raiders will always be in Oakland, but the head may be better off in LA.

Update: Amy Trask issued a statement in which she announced the Raiders are not for sale and that the Raiders ownership would remain with the Davis family.

AEG might want a majority stake, but they may have to settle for less, given the Raiders along with San Diego and Minnesota have already announced they are not willing to sell.

The best they can hope for is a majority stake, but no controlling interest. Something Al Davis would entertain if the price is right.

Posted in Los Angeles Raiders, Stadium Tagged with: , , , , , ,

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