Oakland’s Hail Mary
Oakland has decided to go on the offensive by filing a federal lawsuit against the Raiders and the NFL over the team’s impending move to Las Vegas. The legal arguments may be a bit of a stretch, but the chance to recover the $80 million in remaining debt from Coliseum renovations — and perhaps much more in damages — is well worth a try.
The upshot of the lawsuit is spot on: that the Raiders and the NFL ignored the league’s relocation guidelines and did not otherwise play fair in stacking the deck for Las Vegas, which dangled a $750 million public subsidy toward a new domed stadium in the desert. As Oakland Mayor Libby Schaaf recently told our Scott Ostler, the Raiders “stonewalled the entire time” since she became mayor in January 2015.
“There was no good faith there at all,” Schaaf said last month.
Of course, there is no law on the state or federal books that requires a business to act in good faith in choosing where to house its operation. However, NFL bylaws contain detailed guidelines that teams must meet before moving to a new market, with a requirement that it “work diligently and in good faith” to try to stay in its home territory. It expressly prohibits a franchise from granting “exclusive negotiating rights” to a community outside its current market — such as the Raiders effectively did with Las Vegas.
One of the points of contention in this case will be whether that is merely an agreement among the 32 owners to play fair with one another and/or advance the stability of the league, or whether a community that relied on those bylaws when investing considerable taxpayer money in a stadium should have standing to sue when they are breached.
It’s not a clear-cut legal matter, but it’s an argument that needs to be tested in court not only for Oakland’s sake, but for the interests of other cities that subsidize professional football to even greater degrees. Are you awake, Las Vegas?
On the broader antitrust argument, the Oakland lawsuit alleged that the NFL and its teams colluded as an “illegal cartel” to pressure communities to pony up big bucks for lavish new stadiums. To her credit, Schaaf refused to yield to the extortion game, offering public money only for infrastructure improvements to the Coliseum area that had benefits beyond the football stadium.
As the lawsuit notes, the owners of the 31 teams reaped a windfall by shunning Oakland’s privately financed alternative of a $1.3 billion open-air stadium on the Coliseum site: The other teams divided a $378 million “relocation fee” that the Raiders will be paying the NFL for the Vegas move.
The lawsuit is being handled on a contingency basis in which an outside legal firm will collect fees as a portion of any ultimate judgment against the Raiders. Thus, it does not put tax dollars at risk. It’s a bold move, and a wise one. Oakland should not be saddled with debt for refusing to cower to a cartel.