Oakland A's Owner John Fisher Drops Hint About Financials for Las Vegas Ballpark
For months now, fans and media alike have been waiting for some clarity on the Oakland A's attempts to relocate to Las Vegas. On Tuesday, we finally saw updated renderings. To celebrate their release, A's owner John Fisher spoke with Susan Slusser of the San Francisco Chronicle and offered one particularly interesting insight into how he plans to finance the ballpark itself.
Per the Chronicle, "The financing plans remain the same, Fisher said. The public will fund $350 million, $200 million will be debt, and his family will provide $500 million, with equity investors — still to be determined — responsible for the final $500 million. The hope is that Las Vegas bigwigs who have a particular interest in investing in the town will hop on board."
Just some quick back of the napkin math puts that at $1.55 billion for a $1.5 billion project. The numbers may have been rounded a bit since the A's were actually approved for $380 million in public funding, not $350 million, but after seeing the renderings, this ballpark looks to be more costly that the initial projection, too.
But it's that line towards the end about equity financing that's particularly interesting. Fisher has been saying that he wants to bring aboard a local investor, so that isn't surprising, but the amount he's looking for, $500 million, is basically a third of the ballpark project that he doesn't have the money for as things currently stand.
It's also worth noting, that if Fisher did end up finding an equity investor for $500 million, that would be roughly 42.4% of the team that he would be selling based on Forbes' current team value of $1.18 billion.
There are two other things at play here. The first is what kind of a valuation Fisher is trying to sell at. If an investor is looking at the Forbes value for the A's and Fisher wants a post-ballpark valuation of closer to $2 billion, then that could be one reason why he hasn't been able to find someone to sell part of the team to thus far. The difference between the $1.18 billion and $2 billion valuations is the difference between owning 42% and 25% of the team.
The other interesting aspect that we don't have clarity on is how exactly the flip tax works. Back when MLB owners agreed to the A's relocation in November, they also instituted a "flip tax" on Fisher, where if he sold the team in the next ten years, he'd have to pay a tax on the sale. It was their way of getting a relocation fee.
But what if he only sells a certain amount of the club and not a controlling interest? He'd still be the largest stakeholder in the club, so one could argue that he didn't sell the team in the way that the owners were expecting. He'd instead be selling part of the A's to finance the ballpark in Las Vegas. That may not violate the spirit of what the owners were protecting against, so the tax may not come into play if Fisher decides to only sell between 25-42% of the club.
The fact that he's looking to sell such a large portion of the club would suggest that the financing part of the relocation plan isn't going well.