It seems that the city of Oakland has run out of patience with the Raiders. In a long-awaited move, the city has taken legal action against its once beloved football franchise for what it calls an “illegal move” to Las Vegas concocted by the National Football League and each of its 32 clubs.
The suit claims that the NFL and its teams instituted a cartel operation whereby each club would benefit from the move by receiving a portion of the relocation fee the Raiders will pay the league to move to Las Vegas.
In addition, the city claims that “the NFL’s demand for the public to bankroll new stadiums under threat of club relocation has pushed cities like Oakland out of the marketplace for professional football teams, caused skyrocketing ticket prices and enriched the NFL owners.” City of Oakland v. Raiders, No. 4:18-cv-07444.
Although Oakland’s proposal for a new stadium received greater funding than Las Vegas ($1.3 billion compared to $750 million, respectively), if the Raiders were to stay in the East Bay, the NFL and member clubs would lose out on the $378 million relocation fee that would be paid in the event of a move to Las Vegas.
That relocation fee goes directly to the league and its owners, which the city argues constitutes an anti-trust violation under the Sherman Act, since the money is not actually used for relocation-related purposes, and instead, lines the pockets of the commissioner and the owners. 15 U.S.C. Section 1.
Citing the 9th U.S. Circuit Court of Appeals, the city claims that the NFL has broken its own rules by engaging in unreasonable restraint of trade. Los Angeles Memorial Coliseum Commission v. National Football League, 726 F.2d 1381 (9th Cir. 1984).
In that decision, the 9th Circuit cited considerations including population, economic projections, facilities and fan loyalty as elements that ought to guide where NFL teams are located. In light of this ruling, the NFL added Article 4.3 to its own Relocation Policies which holds that relocation should favor a team’s current city to promote stability.
Article 4.3 makes it clear that home territories are favored and that the primary obligations of the team are to that city and its fan support.
Arguing that an anti-trust violation took place, however, may not be the city’s strongest argument. The move to Las Vegas is not a restraint imposed by the NFL, and, in fact, is the very opposite. The NFL did not stand in the Raiders’ way when the team decided to move from Oakland.
In theory, the fee should serve as a deterrent; discouraging teams from moving. On the other hand, Oakland would likely argue that the fee was incurred solely because the league and team owners wanted that money in their own pockets.
In addition, the city claims that the Raiders never considered staying in Oakland and, thus, had been negotiating in bad faith. Over the years, there have been several issues between the parties, including disagreements over the distribution of ticket revenue, stadium costs and the Raiders’ previous move to Los Angeles in 1982.
Mark Davis, owner of the Raiders, has publicly stated support for remaining in Oakland. The city claims, however, that Davis has done so while also exploring moves to San Antonio, San Diego, Los Angeles and Las Vegas. Oakland noted that it has invested and borrowed more than $240 million in reliance on Davis’ support, constituting possible damages for the city.
Oakland’s ability to recover those damages will not be easy. Incurring damages is the key to standing in court, and although the city claims that the loss of tax revenue constitutes damages, Raiders games have actually cost Oakland considerable expenses.
The executive director of the Oakland Alameda County Coliseum Authority, the Raiders’ landlord, admitted that the authority was barely breaking even and that it would be “a bigger loss to the city if they stay and a bigger gain if they go.”
Costs to the city include police, security and field conversion (from football to baseball and vice versa). The Oakland Coliseum itself does not fill up for most athletic contests, and may soon see its other tenant, the Oakland Athletics, depart soon in light of disagreements with the city over coliseum upgrades.
The NFL could make the city’s lawsuit even more difficult with a countersuit. The league will likely argue that it was in compliance with its own rules as well as anti-trust laws and that it gave Oakland a fair chance to retain the Raiders.
The NFL will discuss how the Las Vegas proposal opened up the greatest possibility for prosperity. The league has recordings of all owners meetings and could quickly dispel several of the city’s claims if those recordings and writings clearly show that the NFL underwent an extensive vetting process in approving the Raiders’ relocation to Las Vegas.
The Raiders could also be facing an additional dispute with the fans in Oakland. The NFL Rams, formerly of St. Louis, dealt with several lawsuits from fans regarding their personal seat licenses, or PSLs, when the team moved to Los Angeles.
These cases ultimately settled for $31 million. The judge in that case held that the PSLs were only valid for Rams home games played in St. Louis. However, the Rams failed to meet its obligation to offer those fans the opportunity to purchase season tickets in Los Angeles. Ronald McAllister, et al. v. The St. Louis Rams LLC, No. 2:17-MC-00157.
A settlement seems very possible based on the foregoing evidence.
Oakland does not actually allege that it wants the Raiders to return to the city. Oakland has actually moved to kick the Raiders out of the coliseum starting with this season. Davis recently stated that while he personally wanted to stay in Oakland, there was no incentive for him to pay rent to the authority if it was going to use the money to sue the Raiders. Options for next season include San Diego, San Francisco and possibly even London.
With the Warriors, Raiders and possibly the Athletics moving out of town, Oakland has become the city of former champions with no real future in any major sports league.