The Nashville metro council put off its penultimate vote on the Tennessee Titans stadium deal (total public cost: $1.26 billion) until April 18 after a marathon meeting yesterday. This isn’t all that interesting — the main holdup appears to be working out how the city will share power with the state over stadium authority governance — but one new amendment approved yesterday is:
The council narrowly passed an amendment changing the “team rent” portion of the agreement: $3 per ticket would still go toward facility maintenance, but an additional 3% from each non-NFL event ticket would go to Metro’s general fund. This percentage would increase 1% each year, not to exceed 10%.
Yes, you read that right: Titans owner Amy Adams Strunk will actually be required to return a bit more money back to the city treasury. This was so alarming to Mayor John Cooper’s office that Mike Jameson, Cooper’s director of legislative affairs, said a non-NFL event surcharge would be “deeply distressing to the team’s ability to finance and carry out” the stadium deal. Councilmember Brandon Taylor, who introduced the amendment, retorted, “It doesn’t come out of their pocketbook. It comes out of the attendees’ pocketbook.”
This is actually incorrect! As we’ve discussed here many times, ticket taxes and surcharges very much do come out of team owners’ pockets, for the simple reason that they can’t just raise ticket prices to cover the entire difference, because the market won’t bear it. (Or, more specifically, if they’re being even marginally competent at setting prices in the first place, they will already have raised them as high as the market will bear.) So while “this won’t cost the Titans anything, we’re just screwing over concert ticket buyers” may have been a successful political argument in this weird space that the stadium debate is taking place in, it actually would cost the Titans something — and that’s not at all a bad thing, considering how lopsided the deal is in favor of the Titans.
(If you’re wondering why the Titans get any money at all from non-NFL games at a publicly funded and owned stadium in the first place, congratulation, you have correctly identified one way in which this deal is lopsided in favor of the team owners.)
So, how much money are we talking about here? Jameson said the ticket surcharge money could amount to as much as $470 million, which seems crazy-high, and some simple math shows is indeed patently absurd. Even at the top ticket tax rate of 10%, it would require about $300 million a year in non-NFL ticket sales to add up to $470 million worth of present value being captured by the ticket surcharge. The Los Angeles Rams‘ SoFi Stadium, which is one of the busiest all-purpose stadiums in the U.S, brought in about $60 million in gross revenue last year from 11 events; while it has almost twice as many scheduled for 2023, thanks in large part to five Taylor Swift shows, that would still only represent about one-quarter of the events needed to drive up the ticket surcharge cost to what Cooper’s office is claiming. And, needless to say, Taylor Swift probably isn’t going to play a run of five shows in Nashville even once, let alone every year.
Could this new ticket surcharge come to, say, an additional $100 million worth of future rent payments by the Titans owners? Still probably unlikely, but sure, possible. Is that going to be such a financial hit that Strunk would walk away from a windfall of $1.26 billion in taxpayer money? Get real. If anything, Taylor’s bill shows how much wiggle room there is for cities to extract better deals for themselves and their residents when pro sports owners come calling — and how far team-friendly elected officials will go to insist that every possible penny of revenue go to the team and not the public.
Nice of them to exclude the NFL revenue…..