The latest stadium project for an NFL team is poised to eclipse the amount of public money going toward a new facility for the Buffalo Bills.
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The Tennessee Titans are closing in on an agreement for a new stadium, and the City of Nashville and Tennessee could be pumping in up to $1.26 billion in public money for what will reportedly be between a $2.1 billion and $2.2 billion project to build a domed stadium.
That would exceed the approximately $850 million in public funds earmarked for the $1.4 million project to build an open-air stadium in Orchard Park.
But as a percentage of total cost, the public funding for both stadium projects is roughly equal, at around 61% for the Bills and 60% for the Titans.
Before the Bills deal, the high mark for public funding was set by the $750 million in taxpayer money going toward Allegiant Stadium, the home of the Las Vegas Raiders since the 2020 season. The Bills, state and county are still finalizing their new stadium agreement. The sides reached an initial outline for the deal in March.
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“The Bills only held the record for about six months, and then Tennessee came along and said, ‘Here, hold my beer,’ ” said Victor Matheson, a professor of economics at the College of Holy Cross.
However, the structure of the two deals, funding sources and the differences between the two cities should be considered when comparing the stadium projects, said Marc Ganis, an expert in sports and stadium finance who is the president of international film platform Jiaflix.
Ganis believes Tennessee’s new stadium is going to be a “great project for the Titans,” with major economic impact for the Nashville area.
He said the growth coming into the Nashville market makes it more palatable to attach money from those revenue streams to the stadium cost, and doesn’t take away funds from other parts of the community.
A new 1% hotel and motel tax, an in-stadium sales tax and a 50% sales tax for the stadium and area around the building will help pay the tab for the city.
“These funds are much easier to generate in a market that is growing,” Ganis said. “Nashville is one of the most dynamic communities in the country.”
The Titans would also be putting in nearly $300 million more as a team – $840 million in all – than what the Bills are contributing to their new stadium.
In addition, the Titans would absorb $62 million owed to them by the city as part of the current stadium lease, and assume future costs of upkeep and maintenance for the life of a new 30-year lease.
For the Bills, the state will pay $6 million per year for 30 years into a capital improvement fund for the stadium, and $6.67 million per year for 15 years into a maintenance and repair fund – or $280 million over the length of the lease. A portion of that money will be coming from revenue generated by surcharges on new stadium ticketing, parking and concessions.
“This has become like an arms race where individual clubs and cities are caught bidding against one another,” Matheson said. “They think if Buffalo can come up with this kind of money and can get a $1.4 billion stadium, Nashville should be able to afford well more than that. Buffalo’s deal gives some ammunition to everyone else.”
Both stadium deals are indicative of a trend in which localities are doing what it takes not to lose their teams, providing the franchises with much of the leverage in negotiations, said Robert Duffy, the former New York lieutenant governor, who worked on the Bills last lease agreement finalized in 2013. He only can see that public funding number going up around the NFL in future years.
“If you play hardball with negotiations, teams are being recruited by other cities offering more in amenities, so you put keeping the team at risk,” said Duffy, now the president and CEO of Greater Rochester Chamber of Commerce.
While Duffy does not believe Bills owners Terry and Kim Pegula ever considered leaving Buffalo, it would not have been a good idea to put them in a corner and test that loyalty.
“Despite all of the criticism of the deal, I support that New York State and Erie County got it done, and I think we see now that other communities will pay even more,” Duffy said.
The Titans are planning to open the new stadium as early as 2026, with a potential groundbreaking in fall 2023. It will replace Nissan Stadium, which originally opened for the 1999 season as Adelphia Coliseum, and will be built east of the facility in the area occupied by team parking lots.
The 1.7 million-square-foot stadium will include a turf playing surface and capacity for up to 60,000 people. Existing personal seat license holders will likely get the first crack at season tickets at the new stadium and receive a credit toward the new cost based on what they paid for PSLs for their current seat.
"Nashville's new stadium will be a game-changer for the community, enhancing the national and international reputation of our great city and state and delivering world-class events to our doorstep that we could never have dreamed of 25 years ago," Titans president and CEO Burke Nihill said in a statement.
Ganis said the Titans stadium is set up to be a major tourist attraction, putting a renewed spotlight on Nashville. He added that the dome on the downtown stadium will only help bring bigger events.
Plans for new infrastructure, parks and green space and affordable housing could also be part of the surrounding area of the new stadium in Nashville.
“It’s a way for Nashville to present itself to the rest of the country, and show its growth and where it is going,” he said. “And that also leads to having more companies and people attracted to the region.”
Matheson said the Bills would have made a “big mistake” by spending hundreds of millions of dollars more for a domed stadium. He said there aren’t enough events, games and concerts to host to make it worthwhile. The Buffalo-area also does not have enough hotel access to host a Super Bowl or Final Four, anyway. Nashville has many more hotel rooms, so bigger events coming there is plausible, but even then, it won’t be that often, he said.
“You’ll probably see a couple of big events that may not have come to Nashville before the new stadium, but it’s almost certainly not going to add up to the extra $700 million in cost,” Matheson said.
The Titans, like the Bills, will use the NFL’s G4 program – providing up to $200 million in loans, $150 million is forgiven through visiting team revenue – and the sale of personal seat licenses to provide much of the team's portion of the funding.
The Tennessee state legislature has approved $500 million in bonds, while the City of Nashville will provide $760 million in bonds issued by the Metro Sports Authority. Those bonds still must be approved by the Nashville City Council, Mayor John Cooper said.
As part of the deal, the Titans agree to waive $32 million owed by Nashville for the money spent by the team maintaining the current stadium over the past four years, and $30 million additionally owed in bonds. The Titans will also pay for future maintenance at the new stadium, shifting the future tax burden to the franchise, according to the team. Much of the Bills' maintenance costs will be paid by taxpayers through a state entity, Erie County Stadium Corp.
Ganis said due to the expense of these new stadiums, teams now need to cobble together multiple revenue sources to get them built. And the large public investment made in Buffalo became necessary because it is the second smallest market in the league, he said. Meanwhile, the Nashville market is ranked 29th among major sports cities, according to SportsMediaWatch.
Matheson said that while the Bills potentially could have moved if a deal wasn’t reached with the state and county, there was no way the Titans were going anywhere, so he believes “government leaders in Nashville and Tennessee folded.”
The Titans moved from Houston, an original American Football League franchise, about 25 years ago, and played the first two years in Tennessee at other sites – first in Memphis, and then at Vanderbilt Stadium in Nashville.
Owner Amy Adams Strunk has said that it could cost about $1.2 billion to renovate the current stadium. The city's current agreement with the Titans also requires a "first-class" stadium to be provided and the city to shoulder additional maintenance costs through 2039.
With other teams building $1 billion-plus stadiums, franchises with older facilities or expiring leases may be more apt to go to court to enforce these “first-class” stadium clauses, Matheson said.
The Titans are also planning expansions to community programs and other commitments to small businesses and the local workforce as part of a new community benefits agreement.
The Bills are still working to finalize a community benefits agreement, and have no plans at this point for trickle down development around the new stadium, which Ganis believes will exceed the $1.4 billion price tag due to increasing construction costs, inflation, add-ons to the project and the potential for weather-related setbacks.
“The fact that the Pegulas will cover all cost overruns was a very big win for the government,” he said.
Comparing Bills, Titans, stadium deals
Timetable. Like the Bills, the Titans are aiming to open the stadium by the 2026 season, but Tennessee's may not be finished until 2027. The Titans are also on the hook for any construction costs over budget.
Footprint. The new stadium in Nashville will be built close to the current facility, on what is now parking lots, to the east. The Bills will be building their new stadium, mostly on parking lots, across from the current stadium on Abbott Road.
Capacity. The seating capacity at both stadiums is planned for around 60,000. That’s about 10,000 less than the capacity at the current Bills stadium – almost identical to what would happen in Tennessee, where Nissan Stadium seats about 69,000.
Personal seat licenses. The Titans will use personal seat licenses to help fund the new stadium, but they are in a bit of a different situation than the Bills because they have already charged season ticket holders for PSLs at the team’s current stadium. Their solution may be to give those who bought the original PSLs first crack at tickets to the new stadium, and credit them the money they spent in line with the original purchase.
The existing stadium. The Titans’ current stadium will remain open during construction and will be demolished after the new facility is completed, just like in Orchard Park.
Dome vs. open air. The Titans’ new stadium will be a domed facility that will put the franchise in position to host a Super Bowl and other large-scale events and festivals. It will be a translucent roof, like at Allegiant Stadium, built in 2020 for the Las Vegas Raiders, allowing daylight through it. The Bills elected for an open-air stadium, with a canopy that will provide some coverage from the elements.
Half the age. The Titans are replacing a facility that is only 23 years old, less than half the life of the current Bills stadium, built in 1972. And they’ll play on a turf surface, while the Bills are going back to playing on grass.
Downtown vs. suburbs. The stadium will be in a central part of the city, while Bills play in suburban Orchard Park. The demolished stadium in Tennessee would become part of the city's East Bank plan, which includes transforming that area from parking lots into green space, a transportation hub, city amenities and other developments. The Bills are planning to turn the current stadium property into a parking lot.