November 27, 2023

By Cody Malloy

Free Agent Lawyer

The Oakland Athletics have finally figured out their stadium nightmare, and it involves a massive change of scenery: from the Pacific Ocean to the desert in Nevada.

On Nov. 16, 2023, all 30 Major League Baseball owners unanimously approved Oakland’s move to Las Vegas. In order for an MLB franchise to relocate, 75% of the owners of the 30 teams (rounding up, 23 votes) must vote in favour of relocation to approve the move.

Legally, the A’s are only obligated to play their home games at Oakland Coliseum (owned by the Oakland Alameda County Coliseum Authority, which is a joint powers agency between the City of Oakland and Alameda County) through the end of the 2024 season, when their lease expires.

Another interesting legal consideration in relocation is whether a team in the new location will infringe on another team’s existing geographical market.

Think back to the 29-1 relocation vote when the Montreal Expos moved to become the Washington Nationals. The Baltimore Orioles were the sole club that objected to the relocation, as they are only roughly 40 miles from Washington, DC. This time around, zero teams took issue with the A’s relocating to Sin City.

Teams that come to mind in somewhat close proximity to Vegas that could have taken issue with the move include:

_ Los Angeles Dodgers

_ Los Angeles Angels

_ San Diego Padres

_ Arizona Diamondbacks

Also consider, how many A’s fans will become San Francisco Giants fans? Some teams can gain market share as a result of another team’s relocation.

The result of the relocation vote should be no surprise given:

_ The A’s have had struggling attendance numbers in recent years. They’ve had the worst attendance out of all 30 teams the last two years in a row.

_ In May, the A’s received approval from the Nevada legislature and governor for up to $380 million (all figures USD) in public funding for a new Stripe-side ballpark.

Before I rave about how good I think the Oakland A’s moving to Las Vegas is for the league, I want to make one thing abundantly clear: Oakland A’s fans deserve better.

The Oakland A’s have quite the history. They began as the Philadelphia Athletics in 1901, before becoming the Kansas City Athletics in 1955, and finally the Oakland Athletics in 1968. The franchise won five World Series titles before moving to Oakland.

Soon after moving to Oakland, the franchise won three consecutive World Series titles in 1972, 1973, and 1974. Their last World Series title was in 1989 against the nearby San Francisco Giants, when the famous earthquake rocked the Bay Area right before Game 3. Legendary players such as Rickey Henderson, Reggie Jackson, Dennis Eckersley, Catfish Hunter, and Vida Blue (to name a few) made the Oakland A’s a powerhouse team in certain eras.

The A’s tried for years to reach an agreement with Bay Area local governments and the state government to obtain public funding for a new local stadium, as the Oakland Coliseum has been falling apart. With those efforts constantly being unsuccessful, the latest collective bargaining agreement (CBA) signed before the 2022 season included a clause that the A’s had to either find a new local stadium or finalize relocation plans to another city by 2024. Otherwise, the A’s would miss out on revenue sharing. The league had ultimately run out of patience.

Although devastating to fans in Oakland, the franchise moving to Las Vegas is such a win for baseball for a few reasons:

_ Vegas is an entertainment powerhouse

_ The Vegas Golden Knights and Las Vegas Raiders have already seen success in Las Vegas

_ Zero state income tax in Nevada

_ Opportunity to rebrand

Allow me to explain further below.

It’s Vegas

The Strip, the Sphere, Las Vegas Grand Prix, Las Vegas Raiders, Vegas Golden Knights … need I say more?

Vegas is the centre of all things entertainment. The Strip speaks for itself. We have all seen the crazy videos of the Sphere, both from the inside with U2’s recent residency shows, to the crazy visuals from the outside (the venue doubles as a massive state of the art billboard for advertising). The Sphere has captivated social media since it opened two months ago. Additionally, major boxing matches and UFC fights constantly occur in Sin City.

Consider how the long-anticipated Las Vegas Grand Prix hit the streets of Vegas this month. Formula 1 (F1) has committed to a 10-year contract to race in Vegas through 2032. F1 built a ~$500 million paddock building next to the Strip. Clearly, F1 sees Vegas as its centre piece for North America.

Furthermore, there is the obvious attraction being associated with a city where people go to gamble. MLB’s official sports betting partnership is with FanDuel, and surely the sports betting powerhouse loves the idea of getting more exposure in Vegas.

The A’s will move to a brand-new stadium in a highly accessible area (right next to the Strip). Vegas sees about 100,000 visitors arriving every day (I found various statistics for this, so I estimated this as a happy medium figure), so there is never a shortage of people looking for entertainment. There is a ton of upside for the game to build its brand right next to the Strip.

Early rendering of the Strip-side ballpark to open in 2028 (Oakland A’s)

If there is any city that knows how to draw attention, it is Las Vegas, Nevada.

Build off the successes of the Golden Knights and Raiders

All of the valuations discussed below are according to Forbes’ historical and current valuations.

_ The Vegas Golden Knights of the National Hockey League (NHL) saw early success in their inaugural season (2017-2018) by making it to the Stanley Cup Finals. In terms of attendance, the Golden Knights have surpassed 100% capacity in every season since their inception (aside from the 2020-2021 Covid season). Compare the growth in valuation of the Golden Knights vs. the A’s since 2017:

Golden Knights: valued at $575 million during the 2017-2018 season, and $965 million during the 2022-2023 season (67.8% increase)

_ A’s: valued at $1 billion in 2017, and $1.18 billion in 2023 (18% increase)

The Oakland Raiders of the National Football League (NFL) moved to Vegas in 2020 (becoming the Las Vegas Raiders), and made their first (and only) playoff appearance since their move in January of 2022. Since full attendance was allowed in 2021 after the Covid capacity restrictions, the Raiders have managed to fill at least 94% of Allegiant Stadium’s almost 72,000 seat capacity. Compare the growth in valuation of the Raiders against the A’s since 2020:

Raiders: valued at $3.415 billion in 2020, and $6.2 billion in 2023 (81.6% increase)

A’s: valued at $1.1 billion in 2020, and $1.18 billion in 2023 (7.3% increase)

Las Vegas Raiders playing at Allegiant Stadium (Stadiums of Pro Football)

Why these staggering jumps in franchise values for the Golden Knights and Raiders in a relatively short period of time you may ask?

With the Golden Knights and Raiders being located so close to the Strip, the casinos see sports as a perfect opportunity to lure in high rollers. Casinos are undoubtedly some of the biggest customers for season tickets and luxury suites for the local sports teams. The casinos alone will provide an influx of fans to ball games that the corporate scene in Oakland simply just cannot. In a similar fashion to stage performances on the Strip, casinos buy up tickets and suites, and then compare them to their rewards members as a way to attract gamblers. Depending on a reward member’s status (which is based on how much time and money they spend gambling, amongst other things), the casino may even pay for their flights and/or comp their accommodations. The casinos know they just need to get their clients on site to generate revenue. The house always wins.

Lastly, consider the current sports void in Vegas during the summer, since hockey and football are both active during the fall/winter. All of those flocking to Vegas during the summer to attend the elaborate pool parties at the casinos will soon have even more entertainment options at their disposal.

Zero state income tax in Nevada

Before I make this point, the A’s have been known as notorious low spenders on player payroll. Yes, they had the lowest payroll in 2023 out of all 30 teams. However, the move to Vegas will allow the team to attract a lot more sponsorship revenue from casinos and companies alike. In theory, they should be able to spend more on payroll to bolster their roster. Combine that with the fact that Nevada has zero state income tax, their ability to attract free agents will be much greater.

The exact calculation depends on how a player files taxes with respect to their marital status, but the highest marginal tax rate in California is 12.3%. Allow me to provide an overly simplistic example. Picture what a hypothetical high-impact player making $25 million per year would roughly pay in state income tax in California: ~$3,075,000.

Wouldn’t you be much more inclined to sign in Las Vegas, as opposed to Oakland, knowing you’d save roughly $3 million in tax? Again, the team’s spending philosophy would need to drastically change, but assuming it does in the long run, it certainly makes it easier to attract better players and put a better team on the field.

Rebrand

When the Expos got approval to relocate, the franchise obviously needed to rebrand to identify with Washington, DC. The Las Vegas Raiders opted not to rebrand when they moved to Vegas in 2020. Should the Oakland A’s rebrand?

You can certainly debate both ways. Similar to the Las Vegas Raiders when they moved from Oakland, the LA Rams and LA Chargers opted not to rebrand when they moved from St. Louis and San Diego, respectively.

The A’s should consider a complete rebrand when they settle into their new ballpark in 2028 (their stadium situation from 2025-2027 is currently unclear). Despite being a storied franchise known for their yellow and green (and white shoes), a fresh clean slate would benefit the brand.

Rebranding would require a lot more legal work. It would mean completely revamping the franchise’s intellectual property holdings by redesigning the logos, uniforms, and colour schemes (certainly not an exhaustive list).

Making the franchise Vegas’ own with a name that screams “Vegas” would do a ton of justice for merchandise sales and building the brand. Although the Golden Knights are an expansion team, within about a year of their inception I got a Golden Knights hat. Why? I fell in love with their logo and colour design. The Golden Knights’ identity seemed incredibly unique to me, and I found their merchandise incredibly visually appealing.

Ever wonder why teams change logos, colours, add new third jerseys, etc.? It gives people an excuse to buy new swag. New logo, new colours, new identity … more revenue.

Conclusion

Sports is entertainment, and entertainment is business. For a league that’s desperately trying to adapt to a short-attention spanned society (mind you, I think MLB did a phenomenal job shortening game times with the rule changes in 2023), relocating a team struggling to fill seats to a stadium next to one of the busiest streets in the world will surely fix their attendance problems.

More attendance and sponsorship means more revenue for the league. More revenue for the league means more money for the players. The A’s franchise gets an opportunity to build a strong fan base in what is arguably the entertainment capital of the world.