The Las Vegas Raiders? Raider Nation may have to adopt the name now that a move to Las Vegas is looking more probable than ever before. The Nevada Governor, Brian Sandoval, will sign a bill into law on Monday, October 17, 2016, to put $750 million in hotel tax money toward funding a new stadium for the Raiders.

Despite the bill’s approval, the Raiders cannot move to Las Vegas anytime soon. A team in the National Football League (NFL) has to apply for relocation. According to NFL rules, there is a process before a team can move to a different location, which is outlined in Article 4.3 of the NFL’s relocation policy.

  • Article 4.3 requires prior approval by the affirmative vote of three-fourths of the member clubs before a club may transfer its franchise or playing site to a different city either within or outside its existing home territory.

 

  • Article 4.3 confirms that each club’s primary obligation to the League and to all other member clubs is to advance the interests of the League in its home territory. This primary obligation includes, but is not limited to, maximizing fan support, including attendance, in its home territory.

 

  • Article 4.3 also confirms that no club has an “entitlement” to relocate simply because it perceives an opportunity for enhanced club revenues in another location. Indeed, league traditions disfavor relocations if a club has been well-supported and financially successful and is expected to remain so.

 

  • Relocation pursuant to Article 4.3 may be available, however, if a club’s viability in its home territory is threatened by circumstances that cannot be remedied by diligent efforts of the club working, as appropriate, in conjunction with the League Office, or if compelling League interests warrant a franchise relocation.

According to Sports Business Daily, the NFL’s relocation rules were adopted in 1984 after the league did not allow the Raiders to move to Los Angeles. The Raiders won their lawsuit against the league and were able to move to Los Angeles for the start of the 1982 season. The NFL follows the relocation rules strictly and a team must show an effort to stay within their market before attempting to apply for relocation. In addition, only the league can elect to relocate a team; not a team itself. The league has to receive 24 out of the 32 votes from the owners.

The Raiders cannot apply to relocate to Las Vegas until January 15, 2017. However, the relocation plan will be discussed at the NFL Owners’ Meetings that start this week.

To complicate matters more, the Raiders signed a one-year lease to stay in Oakland for the 2016 season. The lease was signed in February 2016. According to CBS Sports, the Raiders have a history of signing one-year leases “since the end of the 2012 season.” But, this lease has a provision that allows the team to renew for two one-year options through the end of the 2018 season.

The Legislative Process

On Friday, October 14, 2016, the Nevada Legislature approved the tax increase. According to ESPN, the hotel tax increase will put $750 million toward the stadium. The stadium will also be partly funded by billionaire and casino mogul Sheldon Adelson.

Governor Sandoval held a special session to discuss the bill, which was barely approved by the Nevada Legislature. The Nevada Constitution requires a two-thirds majority vote to pass a bill, which is outline in Article 4, Section 18 of the Constitution.

Sec. 18. Reading of bill; voting on final passage; number of members necessary to pass bill or joint resolution; signatures; referral of certain measures to voters; consent calendar.

‘[ ] Except as otherwise provided in subsection 2, a majority of all the members elected to each House is necessary to pass every bill or joint resolution, and all bills or joint resolutions so passed, shall be signed by the presiding officers of the respective Houses and by the Secretary of the Senate and Clerk of the Assembly.

      2.  Except as otherwise provided in subsection 3, an affirmative vote of not fewer than two-thirds of the members elected to each House is necessary to pass a bill or joint resolution which creates, generates, or increases any public revenue in any form, including but not limited to taxes, fees, assessments and rates, or changes in the computation bases for taxes, fees, assessments and rates.’

The bill reached the two-thirds majority vote. The Senate voted 16-5 and the Assembly voted 28-13. According to ESPN, Governor Sandoval “views the $1.9 billion stadium as a way to ensure Las Vegas’ continued dominance in tourism.” In total, the stadium will be funded through Adelson’s $650 million, $300 million from the Raiders, $200 million from a NFL loan, and then the $750 (million) from the tax increase.

Those in favor of the bill believe it will provide jobs and boost the economics within Las Vegas. In fact, tourists will finance the tax increase with each hotel stay on the Las Vegas Strip.

Although this is the beginning of bringing the Raiders to Las Vegas, more challenges might occur in the future; especially in influencing at least 24 owners to sign off on the relocation.


Follow Taylor on Twitter (@taylor__brisco) and connect with her on LinkedIn.

All Rights Reserved. No part of this publication may be reproduced or transmitted in any form without the express written consent of the MULS Sports Law Society Blog (“SLS Blog”). The opinions expressed by guests & writers of the SLS Blog are their own, not ones expressed by the SLS Blog. 

Sources

  • Daniel Kaplan, Relocation bylaw is not binding for NFL owners, SportsBusinessDaily (Nov. 9, 2015).
  • ESPN.com News Service, Nevada Legislature approves plan to build NFL stadium in Las VegasESPN.com  (Oct. 14, 2016).
  • Ian Rapoport, Raiders take a big step toward Vegas, but many hurdles await, NFL.com (Oct. 16, 2016, 10:45 AM).
  • John Breech, Raiders sign 1-year lease, will stay in Oakland in 2016: 3 things to know, CBS Sports (Feb. 11, 2016).
  • Ryan Van Bibber, The NFL’s Los Angeles relocation process, explained, SBNation:NFL (Jan. 12, 2016, 2:09 PM).
  • Sam Farmer, NFL reminds teams that only the league can make relocation decisions, Los Angeles Times (Feb. 9, 2015, 9:08 PM).
  • Sean Whaley & Sandra Chereb, Nevada Senate passes amended Raiders stadium bill; Sandoval to sign Monday, Las Vegas Review-Journal Capital Bureau (Oct. 14, 2016, 10:04 AM).
  • Nev. Const. art. 4, § 18.
  • Policy and Procedures for Proposed Franchise Relocations, NFL CBA art. 4.3
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