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In addition to the deep dive-style article that will be the mainstay of the newsletter, we’re going to try a few short sections at the end with other happenings around the sports world as a palate cleanser. Let me know what you think!

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Good Thursday Morning. Here’s the rundown of this week’s Sports Business Playbook:

• This week’s deep dive is a continuation of last week’s topic: sports in Las Vegas. Vegas has been on a hot streak the last decade, but can they maintain this success with their biggest challenge yet: the Oakland Athletics’ impending move to the city

• New in this week’s newsletter (both are NFL Draft themed after the event occurred this past weekend):

  • “Whoa of the Week” — you better believe there’s a Keanu Reeves gif from Bill and Ted’s Excellent Adventure down in that section!

  • Two reminders that sports is awesome

Hey team,

As noted in last week’s newsletter, Las Vegas has rapidly become the hottest sports destination in America. .

The city has landed a number of marquee sporting events that create massive value for the community — Vegas officials are anticipating almost $2B in economic impact from two events alone: the 2023 F1 Las Vegas Grand Prix and 2024 Super Bowl.

Where Las Vegas has truly exceeded expectations, though, is with the success of their in-market teams, the NHL’s Golden Knights and WNBA’s Aces, that play a higher volume of games (VGK: 41 home games, Aces: 20).

So, Vegas has shown the ability to handle in-market teams, and the city is hungry for more. With the Oakland Athletics’ impending move, Sin City is getting its wish. Will it work, though?

Not Oak-ay

The A’s have called Oakland home since 1968, and the club has achieved varying levels of success during their roughly 50 years in the East Bay, including true dominance in the 1980’s and becoming ground zero of the “Moneyball” revolution in the early aughts.

Since then, they’ve slipped into general irrelevance on the field, and they have become most known for their home stadium: the dystopian concrete nightmare known as the Oakland Coliseum.

The stadium and its problems are the stuff of legend. Here’s a quick rundown of what you can expect on a given day at the Coliseum:

• Broken seats

• Feral cats

• A Moth infestation

• Plumbing and water leaks that have flooded dugouts with feces

• A new possum boogeyman (or a boogeypossum, I suppose) that has used chemical warfare to stake its claim to the visiting team’s TV booth

Safe to say, it’s long past time for an upgrade.

The club has been working with the city government for almost two decades on trying to get a new stadium built, and it looked like they were making progress recently on a $12B stadium development project at the Howard Terminal in Oakland.

In parallel with this plan, though, the A’s also started to publicly flirt with Las Vegas in 2021 as a potential relocation spot if they couldn’t get a deal with Oakland done. Given the recent announcements, it would appear that a deal was not done.

I’m not going to get into who is to blame for what’s happened. Both the club and the local government have pointed fingers at each other and said the other never intended to actually follow through. The reality is that the culpability is most likely shared by both sides due to a deadly combination of bad faith negotiations, stubbornness, and general mediocrity.

Regardless, the biggest loser in all of this is unfortunately the Oakland fanbase, and it would appear that the A’s are on their way to Las Vegas.

A Win-Win?

On its face, the move to Vegas looks like a net positive for both the A’s and the city.

Vegas gets its fourth major league franchise that will create incremental value for the community and continue to showcase the city’s resurgence as a sports and entertainment hub.

For the A’s, they’re leaving the aforementioned dumpster fire in Oakland and stepping into:

• A local Vegas residential community that wants to continue to show it can support its in-market clubs

• A new stadium and being the only baseball show in town instead of the little brother to the San Francisco Giants

• Vegas’ welcoming economic climate for entertainment properties, namely a potential $500M in public funds for the A’s new Vegas stadium

These factors, coupled with baseball’s current renaissance following much needed rule changes this offseason, suggest that the Las Vegas A’s could work.

(Stephen A. Smith voice): HOWEVA…

I’m not convinced it’s a slam dunk. Let’s dig into what challenges the A’s may have in Vegas.

Volume Play

First, the length and timing of the MLB schedule create a series of inherent challenges that must be overcome.

There are double the number of home games (82) in baseball as the arena sports, and even with baseball’s rule changes, we’re still talking about a slower, less exciting product that does not naturally lend itself to the showmanship and glamor of Vegas entertainment. The weekend series will be packed with opposing fans who will have made a trip out of it, but I expect a challenge convincing fans to come to a Wednesday game against the Marlins.

To be fair, there are some positive data signals for baseball in Sin City. The A’s Triple-A team actually plays in Vegas right now and has led their league in average attendance in prior years, but for me it comes down to a a question of scale.

Averaging 6,800 fans is great for a minor league team; it’s a disaster for an MLB club when the league average was ~26,000 last year.

Plus, most of the season will take place during the spring and summer when it is mind-meltingly hot in Vegas. A domed stadium is a part of the proposed plan right now and could help with that, and yes, there is a precedent with other desert-based teams (Arizona), but the question remains if local fans will be prepared to leave their AC for a Tuesday game against the Reds — I’m going to run this example type into the ground!

In Need of a Bigger Bankroll

The biggest question mark for me on whether this will be a successful relocation long term, though, is with the A’s leadership.

Flat out, this team stinks. And it’s their owner’s fault.

Joe Pompliano does a comprehensive takedown of A’s owner John Fisher and his questionable ownership over the last 20 years, but here’s one nugget that gives you all the information you need:

The A’s 2023 opening day payroll was a league-low $59M, which is essentially flat with their payroll in 2005 ($55M), the year Fisher acquired the team. For comparison, the league average in 2005 was $72M, and this year it’s just over $160M.

As you can imagine, the team’s performance this year has not been…great.

The A’s are a small market club and have always had to be scrappy to compete (despite Fisher’s $2.2B net worth), but the last two years in particular — 2022 payroll was $32M — signal gross mismanagement and it’s hard to see how it’s not intentional given the A’s stadium woes.

Because of the poor play on the field, the business performance has suffered greatly, and the guidance from ownership seems to be that they just need to survive until they get to their new home and everything will be better.

Now, they’re a “lame duck” franchise who can’t draw flies in Oakland — they drew 2,500 fans to a game this week! — and won’t until they leave, and even once they go to Vegas, they’ll most likely be playing in a diminutive, 10,000 seat ballpark until their stadium is complete in 2027.

Do any of these things scream “Vegas, baby!”?

Put It All on Green?

So, how will John Fisher handle his team’s move to Las Vegas?

As noted in the sections above, Vegas is rolling out the red carpet, but is Fisher ready to ante up? Not doing so could be a disaster.

When you think Vegas, you think of words like “big”, “flashy”, and “star power.” There’s a reason the city’s hotels and casinos bring in the biggest names in entertainment to play at their establishments, and it’s a constant race to one up each other.

In this context, the A’s rolling out a similar roster to the 2023 team in Vegas next year is the equivalent of giving a SoundCloud mumble rapper a lifetime residency at the hot new hotel on the Strip.

Fisher has to spend money to improve the club or risk squandering a golden opportunity to entrench the A’s with the city’s fans and businesses. He has the means, but the question is if he has the will.

If he is amenable to opening the war chest, this could be a massive turnaround story and another feather in the cap for Las Vegas.

But if the status quo continues, the A’s may be able to get by for a while on being the new kid on the block, but the sponsors and fans will eventually take their dollars to the other in-market teams and events, and the A’s will find themselves back in a familiar position: the resident black sheep.

Personally, I hope it works out.

There are a lot of good people working in the business and player ops departments for the A’s that do their best with what they’re given, and they deserve a fresh start that gives them a fighting chance to compete.

More importantly, the fans and local community of Las Vegas deserve it. The A’s have already obliterated one fanbase; let’s hope they don’t double down on it.

“Whoa” of the Week

Insane, mind-blowing things happen on a daily basis in the sports world.

This week, here’s a reminder that despite the reports of its impending demise, the NFL is still the apex predator of the entertainment world.

Weekly Reminder That Sports is Awesome

This newsletter is, of course, mostly centered on the business side of sports and the things that happen off the field. That being said, it’s important to remember why we fell in love with sports in the first place, though.

This section is meant to highlight the amazing things that happened in sports this week that serve as that reminder.

This week, we’ve got two wholesome NFL Draft moments. As noted above, the Draft is big business, but these videos illustrate the emotional and financial impact on the players and their families when they hear their names called.

Video 1: Quentin Johnston Gives His Mom an Early Mother’s Day Gift

Video 2: Dallas Cowboys’ Scout Gets to Draft His Son

Not going to lie, someone started chopping onions next to me when the dad said “do you want to come to work with me next week?”

Thanks for reading! Let me know what feedback you have.

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Until next time, sports fans!

-Alex