Imagine this offer for a rabid Buffalo Bills fan:
For a nominal amount – maybe as low as $100 – you get a certificate that you can frame, similar to a stock certificate.
No, you don’t get any stock in the Bills. And you get repaid only if your investment isn’t used and the team leaves Buffalo.
But for your $100 investment, you get something that could be considered priceless – the satisfaction that you helped keep the Bills in Buffalo.
That’s a simple explanation of a complicated new plan being unveiled by directors of the Buffalo Fan Alliance, a crew of 30-something Buffalo boosters and Bills fanatics intent on finding a way to maximize the chances of the team’s staying here for the long term.
The idea is straightforward. The goal is to raise between $100 million and $170 million for a fund – the Buffalo Franchise Preservation Fund. The money in the fund would be offered interest free to someone buying the Bills and keeping the team here. It also could be used by the current Bills ownership toward stadium renovations or even a new stadium.
Here’s how the plan could work, using hypothetical numbers.
Let’s say the Bills were to be sold for $870 million. The new buyers could put up $470 million, borrow another $300 million at market interest rates and use the remaining $100 million, at no interest, through the fans’ fund. That $100 million might be repaid over 20 years, but to the fund, not to the individual donors.
The fund organizers have research suggesting they can raise more than that. Raising somewhere between $100 million and $170 million through the fund could, according to the fan alliance, save a new owner anywhere from about $7.5 million to $12.8 million in interest payments per year.
In return, the ownership group would have to guarantee keeping the Bills in Buffalo for a certain, specified amount of time.
To those who scoff at roughly a $10 million annual saving for multimillionaires, the fund creators say it’s the equivalent of an entire season of some teams’ luxury-suite revenues. And in the Bills case, it would buy the equivalent of 173,000 additional tickets for a season.
That’s no chump change, in any financial circle.
The fund organizers are seeking tax-deductible status for these donations, but whether they obtain it is unclear.
So why would fans line up, on the Internet anyway, to make what amounts to a donation to new mega-rich owners?
“It’s an opportunity to protect something that’s extremely important to them,” Matt Sabuda, president of the Buffalo Fan Alliance, said of the fans. “Owners may come and go, but the fans are forever.”
And, fund supporters suggest this would be a voluntary gift from those community members who’d want to donate, especially in an era when local governments have little interest in subsidizing multimillionaire pro sports owners.
Sabuda compared these donations to the $67 million of basically worthless stock sold in a 2011 “stock” offering for the Green Bay Packers. In both cities, he added, fans feel a huge emotional connection to a community asset that’s much stronger than rooting for a football team on Sundays.
For years, many Bills fans have felt the specter of relocation hanging heavily over the team. Brian L. Cinelli, CEO of the fan alliance, says that threat has existed since he was a young kid, going to games with his grandfather, or later watching the four Bills Super Bowls on TV with his high school buddies.
This effort gives these young community leaders a feeling of empowerment.
“We all feel so helpless,” the 37-year-old Cinelli said. “None of us are millionaires. None of us have a seat at the table. This gives us a chance to do something about keeping the team here.”
In a way, this effort is reflective of what many people see as the new Buffalo, with cranes in the sky, massive state investment and new, younger leaders helping turn around what once was seen as a dying community.
“Our belief is that Buffalo is starting to turn the corner,” Cinelli said. “There is a new generation of Buffalonians who feel we can aid in the renaissance. We feel this is something we can do.”
Concept has deep roots
The new plan isn’t just a product of a few guys sitting on bar stools or around a kitchen table one night.
The seeds of this new effort may have been sown in late 2010, when one of the current Fan Alliance directors, Steve Brady, offered a plan called Bills Bonds. The concept was similar, but the bond owners would be repaid, along with much lower than market-value interest rates.
But because those fans would have been investing in bonds that would be repaid to the individual investor, that concept would have required financial disclosure from the team. And that wasn’t going to happen.
“All of us have grown up loving this team, but we were told at some point it wouldn’t be our team any longer,” the 28-year-old Brady said of his rationale. “This is our way to protect against that.”
The Buffalo Fan Alliance leaders working on this plan for two years say they have met with a national law firm that has dealt extensively with the National Football League and with a Dallas firm that advises businesses on site selections. Both firms have found this concept to be a sound one that could curry favor with the NFL, the local group says.
NFL officials could not be reached to comment, through an email sent to them Friday, at the start of Super Bowl weekend.
In a sense, these fan-alliance members want to become a 2014 version of the old Business Backs the Bills committee, comprised of community business leaders who helped the team sell luxury boxes and premium seats dating back to the 1990s. But this group wants to expand that base of support, to include all rabid fans of the Bills.
The leaders of the group are Sabuda, the alliance president and a local real-estate investor; Cinelli, the CEO and a partner in a Williamsville law firm; and Brady, who attends the University of Pennsylvania’s Wharton School.
Key partners include Del Reid, co-founder of the Bills Mafia fan group, with more than 23,000 Twitter followers; Luke Russert, of NBC News, who has a strong national presence on social media and flashes the same passion for Buffalo shown by his late father, Tim; and Eric Mower and Associates, a local public relations, advertising and marketing firm.
The Green Bay model
For years, many Bills fans have clamored for the team to be owned by the community, the way the Green Bay Packers are.
That’s not going to happen.
In 1923, with the Packers franchise in trouble, the Green Bay community bought the team. More recent NFL rules require a small number of ownership partners, with the primary owner’s family owning at least 30 percent.
But the Green Bay franchise still serves as a model for the Buffalo Fan Alliance’s plan.
The Packers have sold “stock” to their fans five times, the most recent coming in 1997 and 2011. In each case, the offerings provided no control, monetary value or resale rights, just as with the Buffalo concept.
In those two years, selling “stock” at $250 per “share,” the Packers raised net proceeds totaling $91 million. While the Buffalo plan contains pages of statistical analysis, its directors believe the local Buffalo effort can come close to doubling the locally raised Green Bay amount; that’s because the larger Buffalo market – including Rochester, Southern Ontario and a small fraction of Toronto – is about twice the size of the Green Bay market.
Fund organizers want to offer lower possible amounts than $250. But they also want some mid-size and bigger companies to pay larger amounts. If the fund can work cooperatively with Bills officials, it could offer benefits such as an annual “stakeholder” meeting, tours of team facilities and lunches with team executives.
And if this fund worked in Buffalo, maybe the NFL might want to replicate the low-cost financing in other markets.
The fan alliance also notes one important distinction between the fundraising appeals in Green Bay and Buffalo: No one has ever threatened to move the Packers.
“We are not aware of the plan and do not know anything about its potential viability,” Bills President and CEO Russ Brandon replied via email Friday. “I will offer that it’s the tremendous passion of fans like these that fires us up everyday and spotlights the ‘greater purpose’ that Coach Marrone speaks of and everyone in our organization believes in!”
Rep. Brian Higgins, the Buffalo Democrat who has worked closely with the Buffalo Fan Alliance and been briefed on the concept, believes the idea deserves full consideration from anyone trying to preserve this “storied franchise.”
“It’s a creative way to take advantage of the incredible loyalty that Bills fans throughout the country have for this team,” Higgins said Friday. “So this concept is probably more viable than for any other team.”
Indeed, the Bills may be the only NFL team that has been mentioned as a relocation candidate, while still enjoying a huge fan base outside its city, what the fan group calls the “Bills diaspora.”
The Bills’ huge national appeal can be seen in the various home states of the letter writers to The Buffalo News sports section on Sundays. More evidence comes from the list of roughly 200 Bills Backers chapters across the nation and the world.
“We have hundreds of thousands of expatriates who would be excited to send some money back to Western New York to support the Bills,” Sabuda claimed. “It creates a very unique and attractive marketplace.”
Assemblyman Sean M. Ryan, who’s familiar with the alliance’s plan, lauded the group for using some of the Green Bay concept, even if Buffalonians can’t own their team.
“We have an opportunity to set up the Bills Bank,” Ryan said. “Instead of owning a share of the team like they do in Green Bay, we can own a share of the bank.”
The fund’s structure
The fund will be a 501c3 or 501c4 nonprofit organization, with no employees or salaries. In fact, the directors have spent their own time and money plotting this concept. And the administrative costs would be minimal.
So will the fund directors get anything tangible from their efforts?
As Sabuda quipped, “If this succeeds, I hope I would have to buy fewer beers when I go out.”