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Public vs Private Financing for All NFL Teams


Irv
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I wonder what the financial incentives would be for Pegula to finance the entire stadium? Would he get 100% of the concessions and other monies or would he still have to split with the other owners and NFL? One would think that he would reap many of the benefits INCLUDING major concerts and other events at the new digs.

 

Thoughts?

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13 minutes ago, boater said:

There's a lot of learning going on. By the time this is all done anyone in Bills mafia will qualify for an MBA in Finance.

 

lol, I didn't think I'd be googling interest rates for commercial new construction projects this morning. 

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35 minutes ago, section122 said:

 

I read that teams prefer to be tenants so they are not responsible for upkeep and depreciation.  No idea if that is true but it does make some sense especially as you said it has limited use for the NFL.

 

I await to be educated: what uses would a new outdoor football stadium in WNY have, outside of the NFL?

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4 minutes ago, Fan in San Diego said:

If they want it publicly funded then they should make it a publicly traded and we buy shares on it to raise the money. I'd buy into it.

Why would you want to own shares of a stadium?

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Just now, Allen2Diggs said:

Making taxpayers pay for a billionaire's property is just public theft.

 

Unless the lease terms are profitable... The 49ers pay 25 million per year over 40 years. 

 

The Vikings pay 8.5M + 3% interest per year over 30 years.  

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1 hour ago, PromoTheRobot said:

Someone called Rich/RWS/NewEra/Highmark Stadium a cement pond. Good analogy. Anything that's mostly in the ground is cheaper to build. That's why I don't get the $1.1B price quote.

 

You also do not get the Pegulas released a statement saying they did not ask for that amount of money.

 

They likely will not build a "cement pond" again.

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12 minutes ago, Allen2Diggs said:

Public financing would be the community buying shares of ownership in a team like the Packers did.

 

Making taxpayers pay for a billionaire's property is just public theft.

More like legal extortion.  Unfortunately it seems as though cities have to pony up if they want to retain their major sports franchises.  Smaller markets, which are usually less able to raise money than larger markets, are under an increased threat of relocation too since there are comparable markets waiting to snag a team.  Some of them would be happy to pony up.  It’s a big political win.

 

The flip side is that politically it is usually catastrophic to lose a team - especially an NFL team.  So politicians are at a big disadvantage in negotiations.  They almost always have to come up with a way to make team owners happy.  And we all know who pays the bill for that. 

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Two can play at this game, time for Chuck Schumer to start floating anti-trust threats with the NFL brass again. He is our Senator and thus has a very large vested interest in the conversation down the road and keeping his constituents (particularly voting constituents) happy.

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In terms of leverage, it’s pretty much all on the govt negotiators side.  Bills fan base has elevated their game to legendary status.  NFL would take a huge hit moving team out of WNY. 
The problem with spending that kind of money for something new in Orchard Park is that it provides minimal revenue upgrades over the current situation. If your gonna spend close to a billion dollars on a stadium in WNY, the only way it could ever make any financial sense is putting it in Niagara Falls.  

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Indianapolis experience was taxes, taxes and more taxes. And the agency running the dome has huge shortfall, operating expenses v. income.

 

A sobering quote from wikipedia:

Quote

Financing

The total cost of Lucas Oil Stadium was $720 million. The stadium is being financed with funds raised by the State of Indiana and the City of Indianapolis, with the Indianapolis Colts providing $100 million. Marion County has raised taxes for food and beverage sales, auto rental taxes, innkeeper's taxes, and admission taxes for its share of the costs. Meanwhile, there has been an increase in food and beverage taxes in the eight surrounding doughnut counties (with the exception of Morgan County) and the sale of Colts license plates.[3]

The County Commissioners of each county voted whether to levy the 1% food and beverage tax proposed by Marion County. Sweetening the deal for those counties was the fact that half of the revenue from the tax would stay in the respective county. Morgan County was the only county to turn down the offer, yet in a later vote, it levied its own 1% tax – thus keeping all of its additional generated revenue.

Budget shortfall

In August 2006, the Capital Improvement Board, which operates the stadium, estimated that daily operating expenses of the new stadium would be $10 million more per year than the RCA Dome. The board urged the Indiana General Assembly to authorize funding to cover the shortfall.[34] The Indiana Legislature considered a bill to raise sales taxes statewide to cover the shortfall, however this plan faced stiff opposition from legislators outside the Indianapolis metro area.[35]

The assembly ultimately authorized a tax increase in Indianapolis-Marion County. In addition, the CIB trimmed staff and cut $10 million from its budget. Still, the agency anticipated a $20 million operating deficit for Lucas Oil Stadium in 2009. Anticipated expenses are $27.7 million—far outstripping the $7.7 million CIB expects to collect from its share of revenue from stadium events.[36] The Colts organization has been criticized for the favorable lease terms and the high percentage of revenue it can keep under the terms of its agreements with the stadium authorities and there have been calls for the team to cover the shortfalls of the CIB. The Colts responded to these criticisms in an open letter to fans on September 16, 2009.[37]

 

And all these taxes hit the little man. The interesting thing: they built for 720mil with a dome (2008 money). So 1.1 billion domeless in 2023 money sounds about right.

 

Regarding additional events: they only average one concert per year. They are a downtown stadium connected to a convention center, so being downtown isn't the magic elixir some suggest.

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3 hours ago, Hapless Bills Fan said:

 

I await to be educated: what uses would a new outdoor football stadium in WNY have, outside of the NFL?

 

Same as the Ralph does now.  Concerts, other football (ncaa for example - maybe a bowl game), outdoor hockey.  Not much though so again why I could see the Pegula's wanting it publicly funded and owned.  Then it doesn't matter what happens outside of the NFL product.

 

 

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