Can a new Titans stadium be a cash cow? Absolutely, say (checks source of math) Titans owners

This headline yesterday in the commercial real estate publication CoStar caught my eye:

Stadium Plan for NFL’s Tennessee Titans Reflects Nationwide Wave of Sports Development
Nashville Football Team Joins Chicago Bears in Seeking New Revenue-Generating Home

Would that be the “nationwide wave of sports development” that I’ve been writing about for more than 25 years? (It’s trending!)

More than that, though, “new revenue-generating home” implies that the Titans owners are seeking a new $2.2 billion stadium using $1.2 billion in public money because it’ll generate so much revenue, and not because they want $1.2 billion in public money and nobody’s going to give that to them if they don’t use it to build something. It would take an awful lot of new revenue just to make a $2.2 billion stadium repay its own construction costs, so let’s see if this article provides any more detail on just how lucrative the Titans’ dream home would be:

The Titans also argued in their proposal that the new stadium would host more events than the smaller, outdoor Nissan Stadium. The team said the additional events could generate $225 million more per year than the current Nissan Stadium.

Okay, so $225 million a year would indeed be enough to pay off $2.2 billion in costs. It’s also suspiciously high: According to Forbes’ estimates, the Titans only bring in $481 million in gross revenue total right now, so we’re talking about upping their cash intake by nearly 50% just by moving from one stadium to another next door. How would that work, exactly?

CoStar didn’t bother to explain where that $225 million figure came from, but I finally tracked it down in this two-page document released by the Titans in April. Here is the relevant section, in its entirety:

• Enclosed stadium would add an estimated 15 additional ticketed events per year, resulting in approximately $225M/year increase in direct spending compared to current stadium.

• Potential major events with an enclosed stadium include the Super Bowl, Wrestlemania, NCAA Football Playoff, NCAA Final Four, and the NFL Combine, each creating significant economic impact.

One immediately notices a couple of things: First off, even if you count the NCAA Final Four as three events, that’s still only seven annual events given as examples of the “15 additional ticketed events per year.” More important, though, you’re not going to get those events every year — they rotate through a bunch of cities, the better for leagues to use them as a carrot for getting lots of new stadiums and friendly lease terms. So at most you’d get an average of maybe one new event per year, even if Nashville suddenly becomes the new Miami.

But sure, let’s assume that Bruce Springsteen announces a yearly 14-show residency at the new Nashville stadium to make up the difference. The next problem is that that $225 million is in new spending, not in new team revenue: $225 million over 15 events in a 60,000-seat stadium comes to $250 per ticket buyer, and a lot of that is going to go to Bruce and his band and Ticketmaster and so on, not to the stadium that happens to be hosting the event. So that’s not “generating” $225 million a year in new money for anyone; it’s just — again, assuming we believe that dozens of new events will suddenly spring up out of nowhere — $225 million in money changing hands in Nashville at events held at a new stadium.

Why am I subjecting you to all this math? Because it’s important: If a new stadium doesn’t bring in $225 million a year in new revenue but, say, only $100 million, then suddenly that’s less money it’s going to take in every year to pay off the $2.2 billion price tag. And that would mean the Titans owners are looking to build a new stadium that runs at a significant loss, but wants the public to pay for most of it so they can (all together now) socialize the costs and privatize the profits. It’s easy to make money on any project if you’re getting all the proceeds while someone else pays most of the bills.

This isn’t all the math we need to say for sure if the Titans stadium is really just a grift posing as an economic development scheme — we’d also need to know how much more the Titans could bring in from increased ticket prices (at a 10,000-seat-smaller stadium), new brewpubs, whatever. But it’s still not super-inspiring that a commercial real estate business publication, one that one might think would be interested in the actual dollars and cents of running a sports venue, instead just throws out “generate $225 million more per year” without any explanation beyond “the team said.” It would be a good start to solving a whole lot of the world’s problems if journalists would put the word “claims” back in their vocabulary.