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What happens in Oakland...stays in Vegas: The legal implications of the Raiders’ relocation

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Roger Abrams
Roger I. Abrams Richardson Professor of Law See More
This week, the National Football League approved a bid by the Oakland Raiders to relocate to Las Vegas, a move that will likely set up the franchise to begin playing in Sin City by 2019. Seeking improved facilities, the team can expect a new billion-dollar stadium. And while the move may disappoint some fans, it shouldn’t have too great an impact on Oakland’s coffers, according to Roger Abrams, Richardson Professor of Law at Northeastern. We asked Abrams, a leading authority on sports and labor law, about some of the other legal consequences of the team’s relocation.

What negotiations need to happen for a franchise to move from one city to another?

Under the NFL constitution (signed by all franchise owners), a franchise needs at least a three-quarters vote, or 24 teams, to relocate. On the Raiders’ vote, team owners voted 31 to 1 to allow the Oakland team to relocate to Las Vegas. As a matter of practice, the NFL requires teams to attempt to stay in their franchise cities, as stability helps the bottom line. In this case, the city of Oakland and Alameda County were simply unwilling to raise taxes to give the Raiders a better stadium.

How much revenue do cities typically lose after a franchise leaves, and how much revenue can the new city expect?

Franchise movements make economic sense only for the franchise owner. The Raiders will receive a new stadium with a $750 million contribution from Las Vegas. It is a great waste of public money.

Most cities do not lose revenue when they lose a franchise. Persons who buy stadium tickets will generally spend the money elsewhere in the city if they can’t spend it on that franchise anymore—in this case, to attend Warriors or A’s games in Oakland, for example. The new city experiences the same phenomenon; very few permanent jobs are created and little extra revenue is added.

This holds true for cities that lose their only professional sports teams. Discretionary spending on entertainment remains level, but need not be limited to sporting events. Go to hear the symphony or catch a movie.

In either scenario, the real impact is in terms of a city’s prestige, a significant business interest. Cities lose a measure of prestige when they lose a major league franchise.

Can a city retain the rights to a franchise name and logo if the team leaves? So, in this case, could Oakland hold on to the “Raiders” for a possible future football team?

When the Browns moved from Cleveland to Baltimore, the NFL commissioner ruled that the team name would stay with Cleveland until an expansion franchise started there and could take the name “Browns.” As a general matter, when franchises relocate they keep their names and so you have anomalies like the Utah Jazz (Utah and Jazz?) or the Cardinals in Arizona (Are there any cardinals in the desert?). I doubt that Commissioner Roger Goodell would keep the Raiders name in Oakland.

Haven’t the Raiders moved out of Oakland before? What happened then?

The Oakland franchise has a long history of leaving Oakland in the lurch. Former Raiders owner Al Davis thought he deserved the bright lights of Los Angeles—and relocated the team there in 1982—until he tired of them and returned to Oakland in 1995.

For law professors, the moves were important, since Davis sued the NFL when it initially denied him permission to relocate, in 1980. Davis alleged that the owners of the NFL clubs “colluded” to deny him the right to do business where he wished (at that time, in L.A.). The 9th Circuit Court of Appeals sided with Davis’ argument that the injunction was an antitrust violation when it ruled that the NFL agreement constituted a “contract, combination or conspiracy in restraint of trade” and there were no “pro-competitive” justifications for keeping Davis in Oakland.

Since then, the NFL owners have approved every request from a team owner to relocate.

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