With just four days to go until a New York state budget needs to be approved by the state legislature, The New York Times has finally weighed in on the prospects of Gov. Kathy Hochul including $1 billion (maybe) in public funds to pay for a new Buffalo Bills stadium, in what would be (possibly) the biggest stadium subsidy in NFL history. Let’s see what the Paper of Record has to belatedly add to this long-simmering debate:
Instead of facing billions of dollars in projected deficits, New York is currently awash in federal funds.
True! This has nothing to do with whether New York state should be using its windfall to build a private football stadium for a pair of billionaires instead of on literally anything else, but it is accurate that the state would be giving away money that it has more of at the moment.
But giving a sports team a substantial government subsidy, which must be approved by state lawmakers, is still sure to provoke backlash from critics likely to denounce the deal as a boondoggle.
This is a classic Timesian turn of phrase, keeping an arm’s length from drawing any actual conclusions on whether this would be a boondoggle by placing that term in the mouths of “critics.” At least it’s better than “naysayers,” but it still tends to frame those saying this would be a massive waste of public money as a political obstacle rather than informed sources whose criticisms professional journalists would maybe want to follow up on.
The new stadium is expected to be financed with up to $1 billion in taxpayer money, a combination of funding from the state and Erie County, where Buffalo is, according to two people familiar with the structure of the proposed deal, which still has not been finalized.
All covered previously, but I do like how the Times’ lack of copy editors has resulted in a sentence where it sounds like they needed to go to anonymous sources to find out what county Buffalo is in.
“If she were seen as the person that let the Bills leave, then she’s probably got a shelf life,” said Assemblyman Patrick Burke, a Democrat from Buffalo whose district includes the Bills’ stadium. “But if she’s also seen as someone who doesn’t drive a hard bargain and just gives away public dollars to billionaires, that’s going to be a problem for everyone, including me.”
A tough needle to thread, to be sure! Except that when you actually look at the “shelf life” of elected officials in states and cities that have lost pro teams, there’s only one case in history of someone being voted out of office after rejecting a stadium or arena deal and then seeing the team leave — and even he was more likely booted for failing to prepare properly for a city-paralyzing snowstorm than for having the team relocate on his watch.
There’s also the question of whether Kim and Terry Pegula would really move the Bills without an immediate $1 billion stadium subsidy, or if they would more likely come back again next year to see if they can at least get something toward a new or renovated stadium. The Times says there is “intense debate” about how serious the Pegulas’ non-threat threats to move are, but doesn’t attempt to contribute to that debate by, say, looking at whether other NFL teams have picked up and moved immediately or just kept threatening for a decade or so while having no intention of actually going anywhere.
Renovating the current stadium, the team and officials have agreed, would be almost as expensive as building a new one.
That’s not what the state’s own study showed, but if team officials and the state officials seeking to give them money agree on it, it must be true, right?
Public funding for stadiums has a long and contentious history in the United States.
Yup.
In recent years, many New York sports teams, from the Yankees to the Mets, have largely paid for their own stadiums, though many venues have been built with public assistance in the form of free land, tax breaks and infrastructure improvements in the surrounding area.
That depends on what you mean by “paid for their own stadiums” — the Yankees and Mets owners got about $1.8 billion in public money combined, more than they put in out of their own pockets — but if you make a distinction between “paying for a stadium” and “public assistance,” then sure, that’s a defensible hair to split.
While the financing terms for a Bills deal remain unclear, some have argued that a large state subsidy is necessary because Buffalo is one of the smallest markets in the N.F.L., meaning it doesn’t have the collection of big corporate sponsors that pay top dollar for stadium naming rights, luxury boxes and season tickets.
Here we go with the “some have argued” again. How about we take a look at Forbes’ NFL team revenue estimates, which show that until the pandemic, the Bills were raking in about $70 million a year in profit. Is that less than many other NFL teams? Sure! Is it less than the Pegulas would make if they moved to some other city? Who knows! Is it “necessary” for New York state taxpayers to make it their problem? This is no doubt the subject of intense debate!
To recap: The governor of the state of New York is planning to sneak possibly as much as $1 billion in subsidies for two NFL billionaires into the state budget at the last possible second, and the public debate so far — outside of one tiny news outlet that keeps reporting on the actual details — mostly amounts to a whole lot of “reasonable people disagree about public sports stadium funding, but we’ll see what happens.” Three days left for New York’s news media to do better, I’m sure they won’t be distracted by anything el — oh. Never mind.
They have a deal? https://twitter.com/CameronWolfe/status/1508464768633483268
Apparently:
https://theathletic.com/news/buffalo-bills-erie-county-and-new-york-state-reach-agreement-to-build-new-14-billion-stadium-in-orchard-park/OJ8IWdRXb9EC/
“The $1.4 billion price tag will be covered by a public-private partnership, including $850 million in public funds from taxpayers. A $550 million commitment from the Bills and the NFL was approved by NFL owners Monday, while Hochul will advance a $600 million proposal in the state budget and Erie County will contribute $250 million.”
No other details as of yet, hopefully Hochul will announce something soon.
Sorry about that aneurysm you’re about to have, Neil. Sheesh, what a boondoggle.
It’s about what I expected, honestly. They did a lot of anchoring work by mentioning the $1.4b total cost and the $550m from the NFL and Pegulas to make the public’s $850m sound less by comparison, but it would still be the largest NFL stadium subsidy ever.
Also this from the press tweet:
“The economic and tax impacts generated from the team will support more than 100 percent of the public share of the new stadium cost.”
I can’t wait to see what tap-dancing Hochul comes up with to justify that one…
$850m in bonds would cost about $60m a year to pay off. There are about 500,000 tickets sold per year, so for this to work, every single Bills attendee would have to generate about $120 in state and county taxes *per game*. Get ready for some $50 beers!
“Hey, it’s a bargain, it’s only going to cost $850 million in taxpayer money, not $1 billion…”
Except for when you count future maintenance costs, in which case it is too $1 billion:
https://twitter.com/fieldofschemes/status/1508490329984585733
$70m in annual profits (at the current stadium) would carry a construction mortgage in the $950m-$1Bn range. Then the Pegulas could take all the “new” money the shiny new stadium generates and just pocket it.
Also, they could likely obtain that mortgage by putting down around $300m – just over half of the amount they claim they are contributing to the stadium. They likely wouldn’t get the NFL grease if they built this without public money (apart from the land, of course), but they could still get there with $250m less in capital investment and use the income the stadium generates to pay off the mortgage.
They might have to whittle $100m off the cost (or, you know, put in $400m instead of the $550m they have promised with the current plan). But it could certainly be done.
And it wouldn’t cost anyone other than Bills fans a thing.
Yet they aren’t doing this. Surely that couldn’t be because they don’t think the new stadium will actually generate much/any more money than the current one does, could it?
The NYT article indicated the Governor did it for the hard-working men and women of Western New York. Then why reduce the capacity of the stadium? Rich Stadium was 80K at one time, down to 71K now, and the proposed stadium is 60K.
The NYT also said the new Giants Stadium completed in 2010 was almost paid for by the Giants/Jets. Neil, is that a fair statement?
Since it looks like the state is going to own another venue, is it going to be run by ESD, like Belmont Park Arena is, too?
Yes, MetLife Stadium was mostly paid for by the Giants and Jets.
No word yet on whether ESD will run/own this, or the Erie County IDA, or who knows.
Meanwhile, over at nfl.com, the handwavy post is concluded with “The Bills’ existing facility was deemed too expensive to renovate. A state study in November pegged renovation costs at $862 million.” Was this note of the lesser figure without comment an editorial snark by the writer or editor in the house organ?
https://www.nfl.com/news/bills-announce-30-year-deal-for-new-1-4-billion-stadium-in-orchard-park
The small market and not enough corporate sponsors argument is completely backwards.
If the team is not viable because the economy is too weak, then the goal should be to invest in the economy to strengthen it, which would benefit everyone (including team) instead taking from an already weak economy and giving it to the team.
It is actually one of the strongest arguments against subsidies because it works against economic growth.
More to the point, the NFL is the league that depends the least on corporate sponsorships for revenue. The lion’s share of NFL income is from national TV money, and that’s the same for every team, no matter the market.
I enjoyed the comment left on Ron Deutsch’s twitter thread: “If Buffalo let the Bills walk their economy would collapse. This is the reality, look what happened when SD and Oakland said no to their teams.”
It’s true, I felt the aftershocks from those collapsing economies way over here in Arizona…
I wonder how Ronnie will explain the slight uptick in sales tax receipts and general improvement the economies of both San Diego and Oakland will show in future (now that the NFL has left town)?
Or the fact that taxes in these communities are used for things taxes should be used for rather than to subsidize (at least one more) billionaires?
The A’s stadium costs going forward notwithstanding, I’m pretty sure both cities are just fine with their decisions.