In March the NFL owners decided to allow the Oakland Raiders to move to Las Vegas, in a decisive 31-1 vote. They will continue to play in Oakland for the next two seasons but their brand new $1.9 billion stadium in Nevada will not be ready until 2020 so it is unclear where they will play in 2019. This marks the third NFL team to relocate in the last fourteen months. Last year the Rams moved from St. Louis to Las Angeles and previously in this offseason the Chargers also made the move to Las Angeles but from San Diego. With all these relocations one might wonder exactly why it is appealing for these teams to move.
For years people have been thinking the NFL would want to put a team in Las Angeles because it is one of the biggest markets in the United States. It did not make sense that the most popular American sport did not have a team in one of its biggest markets before the Rams came this past season. However, does this mean that having two teams is a no brainer economically? I do not think so. First off, the NFL is not like other sport leagues so it does not benefit the league as it may others such as the MLB, NBA, and NHL to have a team in a huge market like LA. In those leagues, a lot of money is made through local advertising and broadcast rights. This is not the case in the NFL where a majority of its money comes from nationwide TV contracts. The teams split all of these profits evenly. Also, it could prove to be financially detrimental to the Chargers and Rams to figure out a way to split stadium revenue. While moving teams to such a large market may seem like a no brainer, in reality it might not be as economically beneficial for the teams and NFL as one might expect.
Unlike Las Angeles, Las Vegas is a much smaller market. Some economists have thought that it is a bad idea for the Raiders to move here because there is not much economic room. For instance, sports economist John Vrooman stated, “The Broncos rule the Mountain West. The [Cardinals] now rule the Southwest desert. The 49ers have got [Northern California] locked down, and that leaves the Rams and Bolts to split SoCal. There is no … economic room for the Raiders and the Vegas market doesn’t have the size or depth to carry the club.” In addition, Las Vegas will be the NFL’s fifth-smallest media market. There might not even be enough people in Las Vegas to support the team. The NFL likely believes that tourists visiting Las Vegas will pay lots of money to go to the Raiders’ home games. This might certainly be true but is still a risk. Overall, there are certainly some other positive reasons these teams have had to find a new home but one cannot help but wonder if all this relocation will definitely economically benefit the NFL and its teams.