In 2020, the Oakland Raiders moved to Las Vegas. As part of the arrangement, the city agreed to contribute $750 million towards the construction of the stadium (The total cost is estimated at $1.8 billion). Because there are only 8 or 9 NFL games per season that will be played at the stadium, the direct revenue from the games will not come anywhere close to $750 million any time in the near future. Why then, is the city willing to contribute such a high amount to the construction of the stadium?

In 2020, the Oakland Raiders moved to Las Vegas. As part of the arrangement, the city agreed to contribute $750 million towards the construction of the stadium (The total cost is estimated at $1.8 billion). Because there are only 8 or 9 NFL games per season that will be played at the stadium, the direct revenue from the games will not come anywhere close to $750 million any time in the near future. Why then, is the city willing to contribute such a high amount to the construction of the stadium?

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter12: More Realistic And Complex Pricing

Section: Chapter Questions

Problem 12.2IP

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