How NFL money to help fund a new Bills stadium - Update NYS & and Erie County agree to pay nearly $1 billion. Owners meeting $200 M Vote

[boater]

12 hours ago, JaCrispy said:

This might be a dumb question, but would the Pegulas own the new stadium after it is built?

 

I only ask because I thought I heard somewhere that they would be paying a lease on the new stadium like they do Highmark Stadium...

Pegs would be renters from the county. Which surprises me.. how many renters do you know pay for the house the landlord is building? It's nonsensical.

 

[boater]

8 hours ago, JakeFrommStateFarm said:

Mercedes benz was opened in 2017 at a cost of 1.5 billion. It has a retractable roof.

 

Rams owner almost payed for his entire stadium by himself with very little public financing. He makes his money back in PSLs and corporate luxury boxes. Sofi stadium was 5B

oh yeah... that same formula will work in WNY... NOT.

 

Corporate boxes are slim pickings, M&T Bank can only take you so far. PSLs will go over like a fart in church.

[RiotAct]

1 hour ago, boater said:

oh yeah... that same formula will work in WNY... NOT.

 

Corporate boxes are slim pickings, M&T Bank can only take you so far. PSLs will go over like a fart in church.

don’t forget Mighty Taco, Rachels, and the BFLO Store!

[Mr Info]

1 hour ago, BUFFALOBART said:

I'm 34 years in, but when the PSL's hit, I am OUT.

I have made this same comment in similar threads. PSLs already exist for Club Seats. I have seen it on my invoice but unsure how much %. Certainly, these would be more expensive in a new stadium and prob extend to all seats. But PSLs have been in effect for Club Seats for a while and has not resulted in reduction in demand. 

Edited March 27, 2022 by Mr Info

[ganesh]

On 3/26/2022 at 3:04 AM, TheyCallMeAndy said:

So NFL pays 200m, taxpayers pay the rest?

The Pegulas will be on the hook for another 200M

[Doc Brown]

6 hours ago, BUFFALOBART said:

I'm 34 years in, but when the PSL's hit, I am OUT.

I remember me and my brother driving home in just my boxers after the '08 Giants game because my clothes were soaked and there was a 50/50 chance I had frostbite.  That was mine "I'm done" as far as season tickets go.  I'm interested to see how they do control for weather and maybe I'll be in again.  This team is too fun to watch.

[nucci]

10 hours ago, boater said:

oh yeah... that same formula will work in WNY... NOT.

 

Corporate boxes are slim pickings, M&T Bank can only take you so far. PSLs will go over like a fart in church.

how, people will laugh?

[ddaryl]

15 hours ago, Mr. WEO said:

 

 

In 2021, the revenue given (through league revenue sharing) equally to every team was 274 million.  The salary cap was 183 million.  

 

So every team every year has their player and staff salaries covered, without selling a single ticket or jersey yet, whether the team is a perennial playoff contender or the worst in the league.

Insurance, utilities, coaches, trainers, office personnel, Janitorial, Stadium Maintenance, out of pocket upgrades to facilities etc.....

The NFL and its franchises are a business's and that money is not free it was generated by a successful business model. Bills still are not "raking it in:" after expenses etc... IMO

Can the  Pegulas afford their share of $200 - $500 million... Sure but I just disagree with the thought process that the Pegula's are making money hand over fist being the owner of the Bills.. They poured a lot of it back into the franchise.

[SlimShady'sSpaceForce]

12 hours ago, boater said:

Pegs would be renters from the county. Which surprises me.. how many renters do you know pay for the house the landlord is building? It's nonsensical.

 

many companies build property on land owned by another party.   
 

mine did so about a decade ago.

[Mr. WEO]

25 minutes ago, ddaryl said:

Insurance, utilities, coaches, trainers, office personnel, Janitorial, Stadium Maintenance, out of pocket upgrades to facilities etc.....

The NFL and its franchises are a business's and that money is not free it was generated by a successful business model. Bills still are not "raking it in:" after expenses etc... IMO

Can the  Pegulas afford their share of $200 - $500 million... Sure but I just disagree with the thought process that the Pegula's are making money hand over fist being the owner of the Bills.. They poured a lot of it back into the franchise.

 

 

Yes, there's plenty for that in the shared revenue sum as well (for every team).  The Forbes numbers for "operating margin" are "earning before interest, taxes, depreciation and amortization"---after all of the expenses you have listed have been accounted for.  383 million of that over 8 years.

 

The county owns the stadium so it pays for any stadium janitorial and maintenance.  Pegula has chipped in a one time 35 million for the stadium upgrades a few years ago. 

 

The money is free because no single team had to earn it.  It's mainly from TV contracts, the rest from merchandising and NFL Ventures.  So, really, the most popular teams in the league generate a ton of TV and merchandise revenue that then goes to teams that really don't.  That's free money.  How many other businesses can you name where competitors have to give money to others who can't generate as much money?

 

Either way, the Bills are certainly raking it in, compared to what they contribute proportionally to the NFL.

[SoCal Deek]

19 minutes ago, Mr. WEO said:

 

 

Yes, there's plenty for that in the shared revenue sum as well (for every team).  The Forbes numbers for "operating margin" are "earning before interest, taxes, depreciation and amortization"---after all of the expenses you have listed have been accounted for.  383 million of that over 8 years.

 

The county owns the stadium so it pays for any stadium janitorial and maintenance.  Pegula has chipped in a one time 35 million for the stadium upgrades a few years ago. 

 

The money is free because no single team had to earn it.  It's mainly from TV contracts, the rest from merchandising and NFL Ventures.  So, really, the most popular teams in the league generate a ton of TV and merchandise revenue that then goes to teams that really don't.  That's free money.  How many other businesses can you name where competitors have to give money to others who can't generate as much money?

 

Either way, the Bills are certainly raking it in, compared to what they contribute proportionally to the NFL.

So if your numbers are correct that works out to approximately $40 million per year on a $1.5 billion investment. Once again…not a stellar margin by any investment measuring stick. Now, if he puts down another $1.5 billion on a stadium, that puts his rate of return at less than 2.0%. (Less than the typical rate of inflation.) Would you make that investment? 

[ddaryl]

1 minute ago, Mr. WEO said:

 

 

The money is free because no single team had to earn it.  It's mainly from TV contracts, the rest from merchandising and NFL Ventures.  So, really, the most popular teams in the league generate a ton of TV and merchandise revenue that then goes to teams that really don't.  That's free money.  How many other businesses can you name where competitors have to give money to others who can't generate as much money?

 

Either way, the Bills are certainly raking it in, compared to what they contribute proportionally to the NFL.

Disagree the business is the NFL, the franchises are part of the business under the NFL umbrella. Franchises are not in fiscal competition with each other. The revenues are shared to help maintain the league, which is the business. This also ensures a solid distribution of fans in multiple territories. This in turn brings more value to the NFL. Get rid of revenue sharing and so many teams would either fold up,  be perennial bottom feeders, and/or half the league would be fighting to move to new homes in the largest populated areas with the biggest wages. Most likely that would start to eat at viewership and over all NFL value. I know I would lose interest if the league was all top/high market teams. This eventually would start eating at the overall profits. Franchises have the ability to maximize their profit margins but the TV contracts belong to the NFL and are distributed equally because of the vast fiscal differences in the NFL markets. Parity has proven to bring stability and has increased NFL revenues

There are some balances with socialistic, and capitalistic values to the NFL business, and those values are proving to actually bring more value to the NFL by creating a balance of Wealth in the NFL and allowing the game to thrive in high populated high wage areas as well and Lower populated blue collar markets.

 

The Bills TV viewership has always been decent and has increased a bunch as the Bills started winning. So the Bills are doing their part considering the region 

Now if you had $1.4 billion to invest, the NFL is not any where's close to the best business decision for your money.  They are making large equity on their investment but the only way to tap into equity is to sell, or take out a loan against your business. I don't thank the Pegulas' or any NFL team is getting "free money" They are receiving their equal distribution of revenues well deserved for a $1.4 billion + investment and they do well re-investing back into it.

[WhoTom]

10 minutes ago, SoCal Deek said:

So if your numbers are correct that works out to approximately $40 million per year on a $1.5 billion investment. Once again…not a stellar margin by any investment measuring stick. Now, if he puts down another $1.5 billion on a stadium, that puts his rate of return at less than 2.0%. (Less than the typical rate of inflation.) Would you make that investment? 

 

Much like a yacht, a private jet, and a hot sports car, an NFL team is a luxury and a status symbol, not an investment. And unlike the aforementioned luxuries, the team increases in value over time, while the others depreciate. 

 

 

[nucci]

3 minutes ago, WhoTom said:

 

Much like a yacht, a private jet, and a hot sports car, an NFL team is a luxury and a status symbol, not an investment. And unlike the aforementioned luxuries, the team increases in value over time, while the others depreciate. 

 

 

if your business turns a profit of $50M-$70M a year, that's kind of an investment. You mentioned increase value over time...again that's an investment. 

[oldmanfan]

You want to be a major league sports city, it’s the price you have to pay.  Not saying it makes financial sense but it’s just reality.

[Mr. WEO]

2 hours ago, SoCal Deek said:

So if your numbers are correct that works out to approximately $40 million per year on a $1.5 billion investment. Once again…not a stellar margin by any investment measuring stick. Now, if he puts down another $1.5 billion on a stadium, that puts his rate of return at less than 2.0%. (Less than the typical rate of inflation.) Would you make that investment? 

 

As I have stated several times already, the 1.4 billion initial investment will have doubled in less than 10 years.  Why haven't taken that into account?  The annual profit is just a nice dividend on his initial investment--with zero risk. 

 

If I had billions I would jump at the chance to buy the least expensive NFL franchise.  You would have to be crazy not to.  Guaranteed income, guaranteed appreciation, zero investment risk, unimaginable exclusivity and prestige....is that a serious question?? lol

 

1 hour ago, ddaryl said:

Disagree the business is the NFL, the franchises are part of the business under the NFL umbrella. Franchises are not in fiscal competition with each other. The revenues are shared to help maintain the league, which is the business. This also ensures a solid distribution of fans in multiple territories. This in turn brings more value to the NFL. Get rid of revenue sharing and so many teams would either fold up,  be perennial bottom feeders, and/or half the league would be fighting to move to new homes in the largest populated areas with the biggest wages. Most likely that would start to eat at viewership and over all NFL value. I know I would lose interest if the league was all top/high market teams. This eventually would start eating at the overall profits. Franchises have the ability to maximize their profit margins but the TV contracts belong to the NFL and are distributed equally because of the vast fiscal differences in the NFL markets. Parity has proven to bring stability and has increased NFL revenues

There are some balances with socialistic, and capitalistic values to the NFL business, and those values are proving to actually bring more value to the NFL by creating a balance of Wealth in the NFL and allowing the game to thrive in high populated high wage areas as well and Lower populated blue collar markets.

 

The Bills TV viewership has always been decent and has increased a bunch as the Bills started winning. So the Bills are doing their part considering the region 

Now if you had $1.4 billion to invest, the NFL is not any where's close to the best business decision for your money.  They are making large equity on their investment but the only way to tap into equity is to sell, or take out a loan against your business. I don't thank the Pegulas' or any NFL team is getting "free money" They are receiving their equal distribution of revenues well deserved for a $1.4 billion + investment and they do well re-investing back into it.

 

 

The bolded is proof as to why my post is accurate (and why there will never be a serious challenge to the NFL's "antitrust exemption").  Without the hundreds of millions of free money to every franchise, teams like the Bills in Buffalo would have no value whatsoever.  With the shared revenue, the value rises every year for every team, no matter how awful the product on. the field is.  No other business operates like this (each team is a separate business).

 

The highest revenue generating teams and those in the biggest TV markets are driving the overall league annual revenue.  All teams are getting "equal distribution", but they are not getting an amount proportional to what they contribute to league revenues, so it is not exactly "well deserved".  Do the Browns deserve equal shares despite showing zero interest in putting a competitive product on the field that no one in the country wants to watch?  Of course not, but they do.  So it is money they get but that is not earned.  Therefore, it I free money.  

 

As for return on investment, any asset's value is its actual or estimated sale price.  No sense pointing that out in regard to a major sports team. 

[Billy Claude]

 

3 hours ago, SoCal Deek said:

So if your numbers are correct that works out to approximately $40 million per year on a $1.5 billion investment. Once again…not a stellar margin by any investment measuring stick. Now, if he puts down another $1.5 billion on a stadium, that puts his rate of return at less than 2.0%. (Less than the typical rate of inflation.) Would you make that investment? 

 

It is true that owning the Bills are not a great rate of return although it is completely unfair to not include appreciation.  

 

However, you have to include risk factors when evaluating an investment.   Owning a NFL team must be one of the lowest risk investments you can make since costs are controlled (versus the NBA, MLB or soccer).  Even if they lost money in 2020, I bet they made up for a lot of it in 2021 due to the lower salary cap.

 

I do agree that most owners are primarily in it for the ego trip.  Profit is important but secondary.

 

 

 

Edited March 27, 2022 by Billy Claude

[WhoTom]

2 hours ago, nucci said:

if your business turns a profit of $50M-$70M a year, that's kind of an investment. You mentioned increase value over time...again that's an investment. 

 

Agreed, but it's not like an investment that's intended purely for making money. People are comparing it to the stock market; my point is that it's not that type of investment. It's more of an expensive toy or a membership card to a very exclusive club, but it also happens to make money.

 

 

[SectionC3]

3 hours ago, SoCal Deek said:

So if your numbers are correct that works out to approximately $40 million per year on a $1.5 billion investment. Once again…not a stellar margin by any investment measuring stick. Now, if he puts down another $1.5 billion on a stadium, that puts his rate of return at less than 2.0%. (Less than the typical rate of inflation.) Would you make that investment? 

I totally agree with this.  But doesn’t this analysis ignore appreciation?  COC is not a good measuring stick for an NFL franchise value.  But mix the float in the value of the franchise in and all of a sudden it’s not so bad. 

[TheFunPolice]

So now that the downstate baseball and basketball teams got their arenas/stadiums done with public money and it's WNYs turn we suddenly have found our moral outrage.

 

These deals are getting done regardless so why should our community take the hit and not get the same treatment? 

 

Don't worry... They will feel really, really bad for us when the team leaves. Plus, then we'll have the extra money to build another stadium in NYC!

 

After all, we'll have seen the damage that the Bills leaving did and we get it now and can't let that happen again.

 

Sorry I'm not in favor of losing our team. If you argue against the deal you are arguing for the Bills to relocate. It's that simple.

 

 

 

 

Edited March 27, 2022 by TheFunPolice

[ddaryl]

2 hours ago, Mr. WEO said:

 

The bolded is proof as to why my post is accurate (and why there will never be a serious challenge to the NFL's "antitrust exemption").  Without the hundreds of millions of free money to every franchise, teams like the Bills in Buffalo would have no value whatsoever.  With the shared revenue, the value rises every year for every team, no matter how awful the product on. the field is.  No other business operates like this (each team is a separate business).

 

The highest revenue generating teams and those in the biggest TV markets are driving the overall league annual revenue.  All teams are getting "equal distribution", but they are not getting an amount proportional to what they contribute to league revenues, so it is not exactly "well deserved".  Do the Browns deserve equal shares despite showing zero interest in putting a competitive product on the field that no one in the country wants to watch?  Of course not, but they do.  So it is money they get but that is not earned.  Therefore, it I free money.  

 

As for return on investment, any asset's value is its actual or estimated sale price.  No sense pointing that out in regard to a major sports team. 

I disagree completely with your concept of free money. Yes larger markets produce some larger numbers, but the league as a whole just saw a nice uptick in TV viewership across the board. Even though Dallas is top dog on the TV viewership many weeks. GB, Buffalo, Cleveland also show up with solid ratings. This in return drives the entire NFL which increases viewership across the board for all teams, and that increases TV revenues. 

Its not the large markets driving the increase its the NFL product as a whole, and that is increasing because of the revenue sharing that allows parity in the league and makes it exciting for fans and creates newer fans.

IMO That's not free money that's an investment back into the overall product and the majority of that investment does cover much of the expenses> The Pegula's only windfall will be the equity they have in the Franchise. The TV revenue is mostly placed back into the Franchise and small proportion of it it in ending up in the Pegula's pocket, but its no where's near a windfall.

The Browns deserve equal share because they are an NFL franchise. They are very interested in putting up a competitive product, they just do a bad job of it. The Browns have spent money and made moves for players.





 

[BillsfaninSB]

1 hour ago, TheFunPolice said:

So now that the downstate baseball and basketball teams got their arenas/stadiums done with public money and it's WNYs turn we suddenly have found our moral outrage.

 

These deals are getting done regardless so why should our community take the hit and not get the same treatment? 

 

Don't worry... They will feel really, really bad for us when the team leaves. Plus, then we'll have the extra money to build another stadium in NYC!

 

After all, we'll have seen the damage that the Bills leaving did and we get it now and can't let that happen again.

 

Sorry I'm not in favor of losing our team. If you argue against the deal you are arguing for the Bills to relocate. It's that simple.

 

 

 

 

Completely agree with you but there is a difference with the NY City stadiums  compared to WNY.  They can get the numbers to be more palatable by assessing a tourist tax on hotels, etc.

 

Don’t have that luxury here unless they make the tax more widespread around the State. 

[dwight in philly]

Get the thing built.. all the "taxpayer watchdogs" , horse manure out there..   stop .. its not "taxpayer dollars "given to NFL owners, that is  the most simplistic predictable "argument " against the state forking over the money.. the obvious  positive intangibles the stadium will bring more than justifies  building it.. ridiculous ..the over thinking is nuts.. 

Edited March 27, 2022 by dwight in philly

[Beast]

Finally...something that my tax dollars go to that I am happy with!!!

[dwight in philly]

1 minute ago, Beast said:

Finally...something that my tax dollars go to that I am happy with!!!

Exactly.. 

[Heitz]

My takeaway from this thread - I should be able to get seasons in the new stadium since I’m not adverse to paying for a PSL 🤣🤣🍻🍻

[716er]

 

[Beast]

24 minutes ago, 716er said:

 

 

Thanks for the post but it seems Tim Graham has told us stuff like this before. If he's right he'll probably pump his own tires telling everyone he broke it.

[Mr Wild]

 

Him saying the money can be interpreted many ways sounds bad for taxpayers haha

[YoloinOhio]

 

[MPT]

On 3/26/2022 at 8:17 AM, SoCal Deek said:

Owning an NFL Team is not ‘one of the most lucrative businesses in the history of business’. In fact I’m not sure if a single owner makes the majority of their money from owning a team. They make their real money in another market. ( I could be wrong.) Is it an investment? Yes it is. But it’s a long term play, not a short term flip. 

 

There are several owners whose only source of significant income (aside from capital gains) comes from their NFL franchise. Obviously anyone who has bought an NFL team since the merger had to be obscenely wealthy from other ventures first. Some of those, like the Pegulas, sold their original business and now their sports team(s) are their main source of income. 

 

The NFL makes more money than over half the companies in the Fortune 500. Obviously the owners have to split that, but that's why I said they buy "a share of" the business, not the entire business.

 

Anyway, my point was that buying an NFL franchise is one of the easiest and safest (and most fun) ways to grow your net worth if you have the investment capital. It's not philanthropy. The Pegulas have already seen an $800 million increase in the value of their investment over 8 years. I can appreciate their commitment to Buffalo while at the same time realize that their investments are benefiting them more than anyone else.

[RiotAct]

Lock in those materials costs now, boys!

[purple haze]

Most people have little knowledge of all of the items their taxes help pay for nor the exact figures from their taxes that are funneled to any specific item in a state/federal budget.  Taxes are paid by all of us for things we might never use.  

 

I get the principal of not using public money to fund billionaires.  But in the specific case of this Bills Stadium how much of ones taxes do they think is going toward its construction over the next 4 years?   Probably not that much if it’s broken down.

 

 

[Mr. WEO]

17 hours ago, ddaryl said:

I disagree completely with your concept of free money. Yes larger markets produce some larger numbers, but the league as a whole just saw a nice uptick in TV viewership across the board. Even though Dallas is top dog on the TV viewership many weeks. GB, Buffalo, Cleveland also show up with solid ratings. This in return drives the entire NFL which increases viewership across the board for all teams, and that increases TV revenues. 

Its not the large markets driving the increase its the NFL product as a whole, and that is increasing because of the revenue sharing that allows parity in the league and makes it exciting for fans and creates newer fans.

IMO That's not free money that's an investment back into the overall product and the majority of that investment does cover much of the expenses> The Pegula's only windfall will be the equity they have in the Franchise. The TV revenue is mostly placed back into the Franchise and small proportion of it it in ending up in the Pegula's pocket, but its no where's near a windfall.

The Browns deserve equal share because they are an NFL franchise. They are very interested in putting up a competitive product, they just do a bad job of it. The Browns have spent money and made moves for players.





 

 

Without the shared revenue, teams like the Buffalo Bills would cease to exist because they wouldn't earn that money outside of a revenue sharing agreement.  So if an entity is given money it otherwise could not earn in the same business....it's free money, plain and simple.  And what other of Pegula's billions has created almost another billion in wealth in 8 years?  

 

Local ratings are nice and all, but small markets bring smaller ad revenue per 30 second spot, so they aren't as valuable/generate less revenue for the networks laying out the billions for NFL broadcast rights.  Those billions aren't driven by the Buffalo and Cleveland Browns.  Ask any network CEO what teams  they would rather have at the top of their divisions and go deep every year into the playoffs...

 

The Browns may recently be putting in some money, but no one can be bad for the decades they have been by ineptitude alone. 

[ddaryl]

Just now, Mr. WEO said:

 

Without the shared revenue, teams like the Buffalo Bills would cease to exist because they wouldn't earn that money outside of a revenue sharing agreement.  So if an entity is given money it otherwise could not earn in the same business....it's free money, plain and simple.  And what other of Pegula's billions has created almost another billion in wealth in 8 years?  

 

Local ratings are nice and all, but small markets bring smaller ad revenue per 30 second spot, so they aren't as valuable/generate less revenue for the networks laying out the billions for NFL broadcast rights.  Those billions aren't driven by the Buffalo and Cleveland Browns.  Ask any network CEO what teams  they would rather have at the top of their divisions and go deep every year into the playoffs...

 

The Browns may recently be putting in some money, but no one can be bad for the decades they have been by ineptitude alone. 

At this point I can't even remember the original point of this discussion.  

 

[What a Tuel]

What are the protections for taxpayers (and bills fans) that the NFL just doesnt change their mind in 10-15 years and move the team? Will they own the stadium? Or will we own it and just be stuck with it if they ever decided to jump ship?

 

20-30 years we could be looking at another ownership change. Hope the stars dont align for NFL wanting another new stadium, WNY saying no, and whoever the Pegula's sell or will the team to say they are moving to... I dont know, Toronto?

Edited March 28, 2022 by What a Tuel

[Bangarang]

6 minutes ago, What a Tuel said:

What are the protections for taxpayers (and bills fans) that the NFL just doesnt change their mind in 10-15 years and move the team? Will they own the stadium? Or will we own it and just be stuck with it if they ever decided to jump ship?

 

20-30 years we could be looking at another ownership change. Hope the stars dont align for NFL wanting another new stadium, WNY saying no, and whoever the Pegula's sell or will the team to say they are moving to... I dont know, Toronto?

Take a deep breath my man. 

[CountDorkula]

I still think its super short sighted to build an open air stadium in the waste land where it is now.

 

I know Buffalo has a low chance of holding any significant sporting event such as college bowl games, march Madness elite 8 or anything else, but this all but guarantees you never will. 

[BillsFan4]

13 hours ago, 716er said:

 

I was just starting to get nervous that it wouldn’t get done before the budget deadline approaching very quickly (Apr. 1st iirc).

 

I’ll be relieved when it’s officially announced.

[ExWNYer]

Bills owners Terry and Kim Pegula issued this statement on the New Bills Stadium project:

 

"We took another step today to solidify our collective goal of constructing a new stadium for the Buffalo Bills in Orchard Park. We are grateful for the time, efforts and unwavering commitment made by Governor Hochul and her team throughout this process. While there are more hurdles to clear before getting to the finish line, we feel our public-private partnership between New York State, Erie County, led by County Executive Mark Poloncarz, and the National Football League will get us there."

 

https://www.buffalobills.com/news/statement-from-terry-and-kim-pegula-on-the-new-bills-stadium-project