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San Francisco Business Times, January 17, 2003


Raiders in the black as success adds silver to coffers

Steve Ginsberg

With a Super Bowl trip in their grasp, the Raiders have a chance to escape the financial black hole that has sacked them since their return to Oakland in 1996.

Entering Sunday's AFC championship showdown with Tennessee, Al Davis' team is enjoying its best year financially since its first year back in the Bay Area.

With estimated revenues over $160 million for the regular season and two playoff rounds, a Super Bowl would put icing on a successful season.

More importantly it would improve the team's prospects when it attempts to sell 10-year personal seat licenses that have been unpopular. The new licenses start in 2005. A Super Bowl appearance might also spur luxury box sales that have not sold out and will likely increase revenues from media rights and merchandise sales.

"A year from now the new PSLs will go on sale. The team sold only 28,000 when they generated $56 million and created a financial gap. Getting to the Super Bowl wouldn't wipe that gap out, but will help PSL sales in the future." said Zennie Abraham, who headed Alameda County's unsuccessful efforts to win the 2005 Super Bowl and now has his own company, Sports Business Simulations. "They will need the help to sell those PSLs in today's economy. When they originally went on sale in 1995 we were in the midst of a long boom."

The Raiders declined to discuss their financials this week citing the time constraints of getting ready for the Tennessee game. The team has not been to a Super Bowl since 1984 and this is the closest it has come since 2000 when the Raiders were humbled at home by eventual Super Bowl champ Baltimore 16-3 in the AFC championship.

Tickets and TV

The team's two biggest chunks of revenue come from ticket revenues and shared revenue on the NFL's three television contracts with the networks. The team collects $62 million annually from the national broadcasts. The team also benefited in 2002 from a one-time $22.5 million expansion fee payout when the Houston Texans joined the league.

Using court documents and other financial materials available to county officials, Abraham estimates that this season has been the Raiders best after the inaugural season, when the team got a huge boost from a $64 million payout from Oakland-Alameda County Joint Power Authority for moving back to Oakland. This year's boost comes primarily because of the team's increasing popularity.

Attendance averaged over 60,000 a game during the regular season and included five sellouts, ending several years of television blackouts. Only three games were not shown on local television this season. The bigger gate coincided with increases in the average ticket price that, including luxury boxes, has crept up near $100 a ticket.

Abraham estimates regular-season ticket revenue at $43 million. Adding the two home playoff games would push that to over $55 million. He estimated that total revenues were around $113 million last year.

In letting coach Jon Gruden go at the end of last season, the Silver and Black reaped an additional $8 million benefit in its settlement negotiations with Tampa Bay, who it could meet in the Super Bowl. The team has also managed its salary cap well by signing older players like Rod Woodson and Bill Romanowski that other teams didn't want, according to Paul Staudohar, a sports business author and professor at California State Hayward.

"The Raiders have managed their salary cap better than the 49ers and didn't have to cut players and were able to sign players like Jerry Rice," Staudohar said. "By filling their stadium and selling high-priced tickets, they have achieved good revenues and are in good shape. But you have to be a real idiot to not make money in the NFL."

Just sue baby

The Raiders' fiscal morass has led to law suits and upcoming court dates that pit Davis' team of lawyers against Alameda and Oakland over financial guarantees. The team's success is taking the edge off that acrimony momentarily, because it is providing needed diversion from current economic realities.

"When you consider California's budget deficit will cut out $8.2 billion in funding to the counties, its makes our Raiders situation really a small problem," said Gail Steele, an Alameda County supervisor who serves on the Joint Powers Authority that brought the Raiders back.

"Getting this team to San Diego for the Super Bowl would be positive for all of us."

© 2003 American City Business Journals Inc.