The Revolution of NFL Stadiums: An Analysis of Deal Structure & Related Rewards

Sep 8, 2023

By Alexander Chester and Robert Davydov

In recent years, NFL franchises have transitioned away from the standard, cookie-cutter stadiums common in the late 20th century in favor of sustainable, cutting-edge venues with indoor-outdoor features and capabilities. The goal: maximize franchise profits, provide fans with the ultimate game day experiences and improve the economic health of the surrounding communities.

Standout examples of this new generation of high-end sports venues include the spectacular, privately financed SoFi Stadium in Los Angeles—at $5.5 billion, the home of the Rams and Chargers is the most expensive stadium ever built—and the Raiders’ lavish Allegiant Stadium in Las Vegas. Both raised the bar by incorporating new technological innovations and catering to changing consumer expectations. 

Such advances carry a hefty price tag. However, those stadiums have been cited as beneficial investments by backers and host communities for boosting fan attendance and city tourism, creating a positive economic impact and enriching the surrounding area through new infrastructure and public parks. Since these two venues opened their doors to spectators in 2020, several other NFL teams have begun the process of either major renovations or full-scale replacements of their homes, including the Tennessee Titans, the Buffalo Bills, the Chicago Bears, and the Jacksonville Jaguars.

In what follows, we’ll explore some of the creative ways—including lease agreements, deal funding and improvements to the stadium and surrounding area—these teams are structuring stadium deals or plan to engage in potential deals aimed at generating favorable outcomes for all parties involved. 

1. Tennessee Titans

Location: Nashville, Tennessee

Projected cost: $2.1 billion 

Public share: 60%, the largest public stadium subsidy in U.S. history 

Deal hallmark: Removes Metro Sports Authority’s maintenance obligation and puts 66 acres back under its control

In April, the Nashville and Davidson County Metropolitan Council approved the Tennessee Titans’ plan to move forward with a new stadium project. The deal involves a new, 30-year ground lease and non-relocation agreement with the Metropolitan Government Nashville and Davidson County Sports Authority (Metro Sports Authority), which owns the current stadium and its surrounding campus. 

Lease Changes and Deal Funding

Under the previous lease, the stadium was 100% taxpayer-supported and the Metro Sports Authority was financially responsible for stadium maintenance and upgrades. The terms of the new deal:

  • Eliminate the Metro Sports Authority’s $1.75 billion-plus obligation to maintain and upgrade the stadium. 
  • Waive $32 million owed by the Metro Sports Authority for money spent maintaining the current stadium, and to pay off the remaining $30 million in bonds owed for the venue. 
  • Return control of 66 acres, including the current stadium site and adjacent land, to the Metro Sports Authority. 

The new facility will be funded primarily by the state of Tennessee, the Titans, tourists visiting the city of Nashville, game attendees and revenues generated from the new campus development. The state of Tennessee will contribute $500 million, and the Metro Sports Authority will issue $760 million in revenue bonds.

The Titans, with the help of a $200 million loan from the NFL, will provide the remaining $840 million of stadium funding as well as any cost overruns. The Titans will utilize personal seat licenses (PSLs, i.e., paid licenses that entitle holders to the right to buy season tickets for certain seats in a stadium) to offset the team’s financial burden. 

Stadium Improvements & Community Benefits

The planned 1.75 million square-foot stadium would be an enclosed structure featuring a translucent roof with a capacity of approximately 60,000 and an advanced design meant to minimize waste, net energy, and net water status. The stadium will also include a 12,000-square-foot community space.

Reversion of the land to local control will give Nashville an opportunity to generate new revenue from the property. The city plans to employ locals for construction of the capital project and prioritize local businesses in vendor contracts. The new neighborhood set along the Cumberland River is projected to bring in over a billion dollars to the city over the first 30 years of its development, which could be a significant and material financial upside to taxpayers.

The Tennessee Titans released renderings of the potential new stadium Tuesday, Oct. 25, 2022. The stadium would encompass 1.7 million square feet with a capacity of about 60,000 people.

Visual of stadium concept by the Tennessee Titans:

2. Buffalo Bills

Location: Orchard Park, New York

Projected cost: $1.54 billion

Public share: 55%

Deal hallmark: Use of Personal Seat Licenses (PSLs) to offset out-of-pocket costs for team/owners

In May, the Erie County Legislature unanimously approved the Buffalo Bills to enter into a 30-year lease to construct a new stadium. The current stadium, which opened in 1973, was 100% publicly financed, as was standard at the time. 

The state of New York will own the new stadium. The deal includes a standard non-relocation agreement as well as a community benefits agreement, where the Bills will invest at least $3 million a year into the community, adjusted annually by the price index, subject to a maximum annual increase of 2.2%, which will result in over $100 million raised over the term of the lease. 

Deal Funding

The new facility will primarily be funded by municipal subsidies in the amount of $850 million, including $600 million from New York state and $250 million from Erie County. Bills owners Terry and Kim Pegula will be responsible for the remainder as well as any excess costs. The owners plan to utilize PSLs to assist in funding from the team side and reduce their out-of-pockets costs.

Stadium Improvements/Concerns

The new, open-air stadium will be located in Orchard Park, New York, close to the team’s practice facility, and will not have a done, though it will include a canopy overhang to cover 65% of the seats. A perforated, multidimensional exterior skin of the stadium will create “wind confusion” to prevent strong winds during the poor weather common in Western New York in late fall and winter from reaching the field. 

The biggest project ever built in western New York, the stadium will feature state-of-the-art video, new scoreboards, improved sound system, lighting, locker rooms and premium areas, including suites, ledge seats and clubs. However, it will also have fewer seats, and that, coupled with the introduction of PSLs for season tickets, have provoked public backlash. That said, all nine NFL franchises that have constructed new stadiums since 2009 have utilized PSLs, and nearly two-thirds of NFL franchises currently require some form of PSLs.

Visual of stadium concept by the Buffalo Bills:

3. Chicago Bears

Location: Arlington Heights, Illinois

Projected cost: $5 billion, including development of entertainment district and residential quarter 

Public share: TBD as team would pay for stadium construction but requests local government support to develop other parts of property

Deal hallmark: Hinges on outcome of a property tax battle

In February, the Chicago Bears purchased a 326-acre property in Arlington Heights (formerly the Arlington International Racecourse) for $197.2 million to secure the potential opportunity for a $5 billion development project of a new stadium, entertainment district and residential quarter. 

Outstanding Debt and Deal Funding

The Bears’ lease for their current stadium in Chicago lapses in 2033 but permits the Bears to exit the agreement as of 2026 by paying $90 million to the city. Furthermore, the Illinois Sports Facilities Authority alleges that Chicago taxpayers still owe $640 million on bonds issued in 2002 to pay for the stadium’s renovations from two decades ago, including more than $250 million in interest alone. 

The Bears are interested in pursuing a private-public partnership to ensure an economically feasible investment. They do not seek taxpayer funds to help construct the stadium itself.

The team plans to construct an enclosed, state-of-the-art stadium to protect the team and fans from the Windy City’s infamous winter weather. Aside from the stadium, the team envisions developing shops, restaurants, parks, gyms, office space, hotels, and residential buildings in the surrounding area. The stadium construction is projected to generate $9.4 billion in economic impact for Chicagoland, while the completed multipurpose development project could create $1.4 billion in annual economic impact. 

An Uncertain Future

A reassessment earlier this year of the Bears’ recently acquired property set its value at $197 million, which would raise the 2022 tax bill to $16 million, a significant increase from the $2.7 million paid in 2021 before the racetrack was closed. 

In June, Churchill Downs Incorporated, the former owner of the Arlington International Racecourse and the party responsible for the 2022 tax bill, reached a settlement setting the property value at $95 million and establishing the tax bill for 2022 at $7.9 million—but only for 2022, so that the Bears will need to renegotiate the property value to lower the tax bill for the following year. The team has stated that it will not proceed with a stadium deal without settling the property tax dispute. 


Visual of stadium concept by the Chicago Bears:

4. Jacksonville Jaguars

Location: Jacksonville, Florida

Projected cost: $2 billion 

Public share: 50% 

Deal hallmark: The stadium renovation could produce the most expensive public building in the city’s history

In June, the Jacksonville Jaguars unveiled plans to completely revamp their existing stadium and develop the surrounding area for a total estimated cost of about $2 billion. Team president Mark Lamping states that of the $2 billion total estimated cost, stadium improvements alone would cost about $1.4 billion—while constructing a new stadium would require at least an additional $1 billion. If renovation plans come to fruition, the stadium will become the most expensive public building in Jacksonville history. 

Extension of Lease and Deal Funding

Jaguars owner Shad Khan and the city of Jacksonville are willing to share the development project expenses 50-50—so long as they can agree on the terms to extend the team’s current lease. The respective calculations show that the team and the city will each be responsible to pay about $1.034 billion for the project.

Improvements to the Stadium and the Surrounding Area

The Jaguars’ renovation plan would “keep the bones and replace everything else” in a bid to build a reimagined, sustainable multipurpose entertainment venue, with energy-efficient features including a mirrored exterior and passive cooling system, according to the design firm. It would have a standard capacity of approximately 62,000 seats for Jaguars games, with an ability to expand up to 71,500 seats for concerts and other entertainment events, and offer new digital technology to modernize its appearance and improve game day experiences.

The Jaguars expect that the development project, coupled with the ongoing enrichment of the Jacksonville Shipyards, will build momentum to develop adjacent neighborhoods.

Visual of stadium concept by the Jacksonville Jaguars:

Successful Endeavor 

NFL franchises are making strategic moves to engage in stadium deals in order to maximize profits, provide fans with immersive experiences and improve the economic health of the surrounding communities. When structured correctly, stadium deals can generate positive results for team owners, players, and fans, as well as public officials and residents.

Disclaimer: The opinions expressed are those of the authors. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

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