With the Chicago Bears owners’ stadium dreams going nowhere with state officials and going backwards with the public, how to create some positive momentum? How about have someone leak news off the record to the local business rag that you’re looking at a new potential site maybe possibly perhaps?
After publicly labeling the former Michael Reese hospital site as unsuitable for the new venue, the team is said to be reconsidering the 49-acre property south of McCormick Place in hopes of jump-starting discussions with politicians to keep the team in Chicago, according to sources familiar with the talks.
So let’s start with this: “To keep to team in Chicago” is bald-faced propaganda, since Bears execs have never even threatened to relocate the team out of the area, and no other cities are offering them a stadium. (If Crain’s Chicago Business means “keep the team from moving to the suburbs” it should say that, but even then the Bears have no serious offers there either.)
As for this alleged new site, it’s actually an old site on the South Side near the lake that was suggested last May by Chicago’s nonprofit Civic Federation and summarily rejected by Bears CEO Kevin Warren as “too narrow.” (It’s also long been targeted by the city as the site of a new mixed-use neighborhood, no word on how adding a football stadium would pair with that.) It’s now being thrown back into the mix by [source needed] on the grounds that state officials from Chicago might like it better, though the public subsidy required is still unknown; Crain’s reports, citing nobody at all, that “the Bears understand a larger private investment is needed,” but also Civic Federation president Joe Ferguson previously noted that the Reese site is “eligible for TIF funding,” though also it’s owned by the city of Chicago, would it even pay property taxes that would have to be refunded via a TIF? So many questions for whoever is floating this idea now, too bad they’re anonymous so we can’t ask them any questions!
This looks like the old McDome site from the early 90s. It makes sense, but would be an extremely difficult build. Would need to be built over railroad tracks, (like McCormick Place). Would need to relocate the truck marshaling site, and probably move some public housing. On the plus side, all the things that don’t fit with the rest of the lake front would be crammed in one spot. Of course there’s no money or support for this anyway.
A bit south of the McCormick Place McDome site, I think. (Reese Hospital was still in operation in the ’90s, so it couldn’t be the same location.)
They keep throwing sites but refuse to look at Indiana because they want to stay in Chicago proper. If you’re a rich asshole, why not look at a state that bends over backwards for any rich asshole?
What share of Bears fans are from the northern and western suburbs? Indiana would be a long haul for them, no, even on Sundays?
Is it meaningfully further than the south Chicago option that was the old steelworks on the water?
Can Indiana afford two NFL teams? That’s a lot of stadium subsidies. How would that play with southern Indiana voters? Your tax dollars spent on a Chicago team? Maybe one of the Gary or Hammond casinos wants to foot the bill.
I don’t see the state of Indiana cutting the Bears a big check, but perhaps some free land & a casino license might be enough for the Bears to pretend to be interested? If the Gary Airport wasn’t partially controlled by the city of Chicago, that might be a plausible location for reckless speculation?
Kenosha would be alot easier for most Bears fans to get to, it’s only 20 minutes from Lake Forest. That would be a really interesting situation, Kenosha vs Green Bay. There is no way Indiana would work in terms of transportation.
Lots of NFL stadiums on the edge of their metro areas do fine without good public transportation. You’re only talking about 9 home games and maybe 15-20 other events per year.
Kenosha also happens to be in Wisconsin — and gets its local TV from Milwaukee.
There are plenty of Wisconsin Republicans who don’t want intruders from a blue state.
Seems like a step backwards at this point. Makes me wonder if the current ownership has any real intention of building a new stadium or if they’re just buying time until the post-Virginia McCaskey ownership structure takes shape
I thought the whole point of the stadium push was to have a new venue in place, or at least have shovels in the ground, to goose the price of the team when Virginia kicks the bucket and the McCaskeys get out of the pro football business. But maybe not? Admittedly I don’t follow the Bears, but it always feels like intense lobbying for a new stadium with an ancient owner is to pump up the price of the asset for their progeny to cash in. (See also Reinsdorf, Jerry).
I protest at the notion that the McCaskey family have ever actually been in the pro football business… there’s no evidence of that at all.
They have made some money off owning a professional football team, but that is not the same thing…
They have made a profit for over 40 years, and da Bears are worth upwards of $5 billion, even in Soldier Field. Papa Bear handed his grandchildren a legendary team, Ed McCaskey grabbed the whole thing, turned it over to his imbecile son Michael, who promptly destroyed da Bears.
Not exactly…Papa Bear’s son was the President of the Bears and heir apparent, but died young and unexpectedly in 1979. Only then did the McCaskeys start running things.
The running joke in Chicago at the time was that his last words were “anyone but Michael.”
All this begs the real question: The Bears own Arlington Park in the northwest suburbs, why are they desperate for a government-funded sportsball palace far away from where their season ticket holders live?
It seems like they don’t want to pay taxes in Arlington Heights, and they don’t have the money to build it themselves. They may gripe about Soldier Field, but they only pay $7 million a year in rent. Their parking and concession deals aren’t great, but they don’t need a new stadium to make money, just to make more money.
According to Forbes’ estimates, the Bears turned a $137 million profit in 2023:
https://www.forbes.com/teams/chicago-bears/
The McCaskeys are a legacy NFL family that’s not exactly liquid though, right? It seems like they want a stadium without having to sell a significant share of the team to raise the capital to pay for it themselves.
One of the things that has always intrigued me about sports owners – NFL owners in particular – is how they consider selling an ownership share to raise capital for one purpose or another.
If the Bears are actually worth $5Bn and have an annual operating profit in the $125-150m range (and either number, in my view, should be taken with a grain of salt), they should have no trouble whatsoever borrowing against the value of the franchise. Even at a 12% capitalization rate, they should still be able to borrow $1.1Bn on income alone (nevermind the equity value of the team).
This would also be true of MLB owners like Fisher. If the A’s are legitimately worth $1.2Bn and have a net income in the $30m range… borrowing $2-300m shouldn’t be an issue… borrowing twice that could even be possible under some circumstances.
And yet… they don’t. Why?
Could it be because they have already borrowed heavily against the team and are up against or near the league’s own internal debt limit for owners?
Or they’d rather wait as long as possible to see if they can snooker someone else into putting up the money without them having to put up equity or pay it back.
I think they don’t borrow because franchise valuations, even the NFL’s, have been in a bubble and their real value is actually lower. But similar to the NHL running a weirdly complex deal with SEG and the Coyotes to mask the true (lower) value or the league’s members, the NFL doesn’t want its teams borrowing against themselves for the same reasons.
Also, it’s still a stake in the franchise, albeit put up as collateral. It’s less of a cut if they sell the team in the interim (which I think is still the end game here for the McCaskeys). Rich people don’t like giving up ownership stakes and letting more people in their club in general.
It seems these days that NFL stadiums run in the range of about $2 billion or so (the SoFI notwithstanding). I know the raiders got several hundred million from the NFL (the NFL has a fund to help teams build stadiums) and also about $700M from Neveda and I think the Raiders borrowed about $600M or so which had to be against the Raiders because Mark Davis has no other assets (at least none that could secure $600M)
It was $750 million from Nevada and $200 million from the NFL, I believe. The rest came from PSLs and Mark Davis borrowing against the value of the Raiders.
According to the Allegiant Stadium WIkipedia page the financing was as follows:
Public Funding $750M
Loan from BofA $650M
NFL Stadium Loan Program $200M
Personal Seat Licenses $300M
The public funding was municipal bons backed by the proceeds from a special tax on hotel rooms.
The Raiders managed to actually completely sellout their personal seat licenses and I think may have gone over the $300M mark. Around the same time the Rams and Chargers were selling Personal Seat Licenses and didn’t come close to selling out. Also Allegiant is paying $25M/year for the naming rights. These usually last for 20 years.
I’m thinking even with $650M in debt (or perhaps $850M if the NFL portion is included, though that’s at probably favorable interest rates) the raiders are probably doing okay. Their years revenue was estimated by Forbes at $750M/year now which is quite the uptick from when they were in Oakland.
Yeah, for NFL teams having a stadium with lots of revenue enhancers like clubs and wine bars is more important than being in a big market, since local TV revenue is basically nonexistent and it’s easy to sell out eight home games no matter where you play. So $40m a year or so in loan payments isn’t a huge cost.
Baseball, needless to say, is different on both counts, even if John Fisher is pretending otherwise.
I think $650 million is about the limit a team would be willing to stomach. Vegas is also a unique situation because Allegiant is the only 65,000 seat indoor venue in the largest live-events city in the world. I know a couple of Allegiant PSL holders who drive down from Utah, and besides the Raiders tickets those PSLs offered all sorts of other “perks” like first dibs on big shows and other events before the public. If you’re into that kind of stuff, it’s a nice inducement that’s better than just 10-12 home games a year.
Nothing about the A’s in Vegas maths out and probably never will. I’ve always thought that if the actual Vegas barons like Steve Wynn thought they could make a buck off owning a ballpark and MLB team, they’d have done it.
“actual Vegas barons … could make a buck off owning a ballpark and MLB team, they’d have done it.”
Exactly. And they don’t do it either.
On another note, taking on debt to finance revenue growth is the essence of business expansion. If you sell equity (even a minority interest) to another owner, to raise capital you lose that revenue growth. It may still be that if the growth is large and sustained enough, your ‘share’ of the team might still appreciate in value significantly. But you no longer own all of it.
If you just have a loan to pay back, once that is retired you get all the revenue growth.
Of course, one benefit we are ignoring of selling minority stakes is that it is much easier to get approved by the owners club as a minority owner than it is as a majority partner… and once you are “in”, leagues have a great deal more difficulty in rejecting a minority partner they have already approved than an outsider.
Think of the people who have slipped into pro sports ownership using exactly that loophole (including some of the ones we talk about fairly regularly on this site).
I thought the answer to that was self evident…. they never intended to build at Arlington Park and were only using it to extract subsidies – from Chicago or elsewhere.
It’s not going well so far. But if there’s one thing we have learned, even the most incompetent hostage taker can win in the end if they own the franchise that is being held hostage.
The “Keep the team in Chicago” framing from Crain’s is a chef’s kiss. What are the Bears gonna do, send a team rep on a covert trip to Austin or Greensboro?
Whatever do you mean?