Category: Tennessee Titans

Well, that went exactly as expected:

Nashville cemented a historic $2.1 billion agreement to build a new, enclosed stadium for the Tennessee Titans on largely underdeveloped Metro land along the east bank of the Cumberland River.

The deal is the largest in Nashville’s history and includes at least $1.26 billion in public funding, making it the largest public subsidy for a stadium in U.S. history.

Nashville’s council signed off on the agreement with a 26–12 final vote early Wednesday morning after an impassioned five-hour public hearing in which nearly 70% of speakers opposed the deal.

There are more details, but they’re basically as you know them by now: a $2.1 billion stadium project, with the state kicking in $500 million and the city $760 million. It will indeed be the largest stadium subsidy in U.S. history, breaking the $1 billion mark set by the Buffalo Bills just last year. Construction is expected to be complete by 2027, or maybe 2026, depending on which paragraph of the news coverage you read.

This comes as no surprise, given that the Nashville metro council had already voted multiple times in favor of the subsidy by large margins over the past few months. But it’s still a major milestone in the ever-growing funneling of public funds to pro sports team owners: Over public opposition, Nashville Mayor John Cooper and Titans owner Amy Adams Strunk — the latter of whose name somehow didn’t appear once in the Tennessean’s long news article about the stadium vote — managed to piece together more than $1.2 billion in taxpayer cash to spend on a new stadium, on the grounds that the team’s 23-year-old one was hopelessly outdated and would be even more expensive to upgrade, because team execs said so, and they wouldn’t lie to us, now would they? The lobbyists certainly helped, and the fawning coverage by the Tennessean newspaper certainly helped, but in the end, 26 out of 38 metro councilmembers voted for this thing, which is a remarkable reminder of just how much sway billionaires and their friends have over government decision-making in this country, through a combination of empty promises, mostly empty threats, and filling the room at the right parties.

Let’s turn this over to primary stadium-deal opponents Councilmember Bob Mendes and Kennesaw State University economist J.C. Bradbury for some final words:

I’m hearing people think the East Bank will have a transportation corridor with new roads, parks, greenways, streets, sidewalks, and affordable housing.

None of that is included in the stadium’s $2.1 billion purchase price! That’s all extra coming from the metro general fund.

— Bob Mendes (@mendesbob) April 26, 2023

This deal also highlights how ignorant our elected leaders are about basic public finance. Like, not able to pass an undergraduate course bad. The statements by supporting representatives revealed them to be incompetent. That's not hyperbole, that's the correct term.

— J.C. Bradbury (@jc_bradbury) April 26, 2023

And that’s a wrap. Unless someone in power gets caught engaging in fraudulent helicopter registration and the whole deal unexpectedly falls apart, which seems unlikely to happen a second time, but we can certainly dream.

 

The Nashville metro council is set to cast its final deciding vote today on spending $1.2 billion in public money on a new stadium for the Tennessee Titans, with the plan expected to pass handily given the results of prior votes. And just in time for that, local Nashville resident Kelly Chieng has turned up a stash of lobbying emails and other documents that were sent to councilmembers in advance of last week’s penultimate vote. Let’s take a gander and see how the sausages get made:

Good morning CM XXX,

Today is the big vote day on the Titans Stadium. The last few weeks in Nashville have been momentous, and it’s a challenging time to be in your shoes. We’ve faced those challenges head on and had some real victories along the way. You’re proof that our City gets the big things right even in the face of adversity. 

The most important part of political advocacy is less specific arguments than framing: To get the job done, you need to build a compelling narrative that paints a vote for your thing as being on the side of the angels. Here, Sam Reed of Jigsaw (“a dynamic strategic consulting firm focused on finding solutions custom fit to our partners’ needs,” which is some A+ framing right there) recasts trying to pass $1.2 billion in public funding over the opposition of most city residents as facing “challenges” and “adversity,” like it’s climbing Mount Everest or something. (Yes, public opinion is here presented as “adversity.” Only true heroes can overcome the perils of democratic accountability!)

What’s before you tonight is the chance to fix a big, unfunded problem for the city with a sustainable solution that takes the burden off of Nashville taxpayers and put it onto the Titans. This is the culmination of over two years of work by the country’s top experts that brings together state, local, and private partners to build a state-of-the-art stadium to host internationally significant events, keeps the Titans in Nashville for another generation, and provides a catalyst to unlock East Bank development.      

More framing: Spending $1.2 billion is fixing an “unfunded problem” by taking “the burden off of Nashville taxpayers.” This is simply a lie, but “the country’s top experts” (in what exactly? never mind such details!) couldn’t be wrong, could they?

The letter goes on to include a point-by-point summary of all the amendments that were on the table last week, helpfully sorted into “Titans Support” and “Titans Oppose,” with several of the latter being on the grounds that they’re “contrary to the negotiated deal,” even though the whole point of the council voting is to give it the right to help negotiate the deal. Finally, there’s a series of “data points” that contain little data, but mostly arguments about how democratic (39 public meetings! 153 public comments!), necessary ($1-2 billion in needed renovations without a new stadium, though the actual number appears to be much less than that), and unavoidable (“Opponents offer no alternative financing plan” for, uhhh, not building a stadium?) the Titans plan is.

Again, all of this is less meant to win rational arguments than to provide butt-covering talking points: If a metro councilmember can explain away their vote for handing $1.2 billion to the local sports billionaire as “getting the big things right” to save Nashville taxpayers money, that’s far more important than whether it actually would save taxpayers money or, you know, cost them $1.2 billion. And it doesn’t hurt that it’s coming from Reed, a former staffer to Nashville’s then-Congressional representative Jim Cooper (and owner of “trendy coffee shops”), for which the Titans owners are paying … less than $150,000? That’s pretty cheap — maybe somebody should start a GoFundMe to buy a former government staffer to represent Nashville residents who aren’t billionaires.

The Nashville metro council voted to approve the Tennessee Titans stadium deal last night, which should come as no surprise given that it’s already voted about 72 times (note to self: check on exact number) to approve the plan for a $2.1 billion domed stadium to replace the team’s current 23-year-old one. No, if you’ve been following along this far, your question is almost certainly: Yo, what did they decide about that rent increase that the mayor’s office complained would provide an additional $470 million in payments from the Titans over the course of a 30-year lease?

(Yes, complained. The mayor of the city of Nashville was upset that a proposed amendment would ask the team to provide more money to his city, because his office said it would “kill the deal.” Please stop rolling your eyes, you’re delaying getting to the answer.)

The answer: The council voted cut the rent increase way, way back, in the interest of maximizing the stadium’s “competitive potential.”

• Under the initial version of the lease, the Titans would have paid $3 per ticket for each non-NFL event to city coffers. The amendment approved two weeks ago would have raised this by an additional 3% of each ticket, rising each year to a maximum of 10%.
• The new amendment approved last night set team rent at the greater of either $3 or 3% of each non-NFL ticket. This means that for all non-NFL tickets costing less than $100, there will be no rent increase at all. For, say, $500 seats to see Zombie Bruce Springsteen in the year 2043, there will be a surcharge of 15 bucks, which will go to the metro council’s general fund.
• College sports, high school sports, and events held by the Country Music Association, Academy of Country Music, Grammy Awards, and WWE will all be exempt from the tax, which will almost certainly result in attempts to recategorize Zombie Bruce Springsteen as a country artist, or possibly a wrestler.

How much this will end up providing in additional rent from the team is unknowable — the Tennessean reported it as “an estimated $120 million” but not whose estimate that was or whether that was in 2023 dollars or paid out over the next 30 years or what. Other councilmembers begged to differ:

"Two things can be true at the same time," CM Henderson says, "We don't have a very good deal currently, and this deal doesn't make it better."

— nicole is drowning in news (@startleseasily) April 19, 2023

For now, it’s probably best to assume that the total public cost will remain around $1.2 billion, give or take some rounding. And how do Nashville residents feel about that?

A slim majority of Nashville residents oppose the construction of a new stadium for the Tennessee Titans, according to a new Vanderbilt University poll. … The poll, released Wednesday, shows that 52% of respondents oppose plans for a proposed $2.1 billion Titans stadium.

Well, the Nashville metro council is overwhelmingly in favor, who cares what their constituents think? The next vote, which the council swears will be the final one, they can quit voting at any time, really, will be held next Tuesday.

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.

Nashville Mayor John Cooper sent over his final term sheet for a new Tennessee Titans stadium to the Metro Council last Friday, though it took a few days before it became available for the great unwashed to read. It showed up by yesterday, however, and one of the items included is a document explaining how the city will pay for its share of $1.26 billion in public costs, which is this:

Public Finance 101. When you draw a circle around a stadium it equals free tax revenue. https://t.co/fcQ1m9H5bU

— J.C. Bradbury (@jc_bradbury) March 2, 2023

So the small purple blob looks to be the stadium, and the larger area described by another purple line is the “sales tax zone” that would have all sales tax revenues kicked back to a capital fund to pay for the stadium. That’s a total of 104.41 acres, encompassing the whole new development district that the Titans owners plan to build around the stadium.

We’ve already been over this before, but to recap:

Since this is money that otherwise go to the metro government and the state — sales taxes from fan spending at the current stadium goes to the public treasuries, obviously, and most of the spending at new stores around the stadium would just cannibalize spending at stores elsewhere in the city or state — it’s verbal prestidigitation bordering on outright lying to say that this is tax money that couldn’t otherwise be spent on other public needs.

How much money would be provided by sales tax kickbacks? The term sheet doesn’t appear to spell that out anywhere, which is what council stadium committee chair Bob Mendes was complaining about when he issued his questionnaire full of blank entries in December. Nor does it indicate what happens if sales tax receipts plus other stadium funds (hotel taxes, ticket taxes, plus for some reason a $4 million annual payment in lieu of taxes from the city water and sewer department) fall short of what’s needed to pay off the stadium costs, though since it’d be the public Sports Authority on the hook for construction debt, the answer would presumably be “find more money to give to the Sports Authority, maybe by selling a hospital or something.”

(There’s also a bit in the term sheet about a state-of-the-art clause, which was noted by The Center Square’s Jon Styf in an article yesterday. It’s a bit confusing, though, in that the Titans would be the ones responsible for maintaining the new stadium in “first-class” condition, but could presumably access the capital fund created by tax revenues to pay for upgrades, suggesting a kind of waterfall fund like the one the Atlanta Falcons are using to get more subsidies on top of their initial ones. I’ve already held up this post for long enough trying to figure out what it all means, so I’ll come back to it either after I’ve had more time to dig through the lease language or after Styf has beat me to it.)

There’s likely more to be found in the term sheet, but you won’t find it in the Nashville Business Journal, which instead spent its time interviewing Mayor Cooper about how he wants a new domed stadium in place to host a potential national political convention in 2028:

I know you sent a letter about bidding for political conventions in 2028. What else are you doing to try to fix [the relationship between Metro Nashville and the state]? I do spend a little bit of time [on it], as much as I can. Part of it is explaining Metro government. Let’s say you have a state-appointed Sports Authority. Well, the Sports Authority issues county debt. Sometimes it’s good just to point our basic governing challenges: You’re a state board, issuing county debt? The issuance of county debt has been of great benefit to the state, right? The state has made more money off of Bridgestone [Arena], I’m sure, than the city ever has because they get seven cents on every tourist dollar coming to the state. And so here you have the case of county debt really being a windfall for the state.

Like, what? The state gets more in hotel taxes than the city does, sure, but also people attending Predators games from elsewhere in Tennessee are a gain to the city, but not to the state, because that’s just shuffling around money from existing state taxpayers. This would not seem to be too difficult a concept to grasp, but then, Cooper has lots of incentives not to grasp it, as someone who’s staked his reputation on a $1.26 billion public expense to build a new NFL stadium that he claims will benefit taxpayers because reasons.

Though Cooper’s reputation may not matter all that much, given that in January he made the surprise announcement that he won’t be seeking re-election to a second term, again because reasons. This means he will likely be remembered mostly as the guy who blew into the mayor’s office, gave a billion dollars to Amy Adams Strunk for a new stadium, then rode off into the sunset. This is not what I personally would want at the top of my Wikipedia entry, but I guess it beats “got out-fundraised by his mayoral opponent but won the election anyway by spending $1.4 million out of his own pocket after helping run corporate mergers for Lehman Brothers, you remember them, the company that set off the Great Recession by helping to invent subprime mortgages.”

The Nashville metro council voted 27-8-3 (presumably yeas, nays, and overtime nays) last night to approve the city’s term sheet with the Tennessee Titans to put more than $1.2 billion in public money into a new $2.1 billion stadium. It also voted 27-5-3 to approve a new 1% hotel tax surcharge to pay for $500 million of the city’s $760 million share.

The term sheet isn’t binding, but the lopsided vote in favor is a pretty good indication that the council’s initial qualms about whether it wouldn’t be cheaper to provide the renovations required in the Titans’ lease might not be cheaper have been resolved for most members and that this deal is extremely likely to go through. Some reactions:

• The Titans organization, in a press statement: “For several years now, we have been searching for a responsible and sustainable solution to a growing, unfunded taxpayer liability. We’re thankful for Council’s support in bringing us one step closer to removing taxpayer risk from the stadium forever while creating a long-lasting, transformational stadium that both entertains and serves its community year-round.”
• Mayor John Cooper: “I am proud of the transparency and robust community engagement throughout this process.”
• Councilmember Ginny Welsch: “This is just idiotic. … We shouldn’t walk off a cliff just because the administration wants us to.”
• Kennesaw State University economist J.C. Bradbury: “The terms sheet was passed with literally ZERO economists supporting it. Titans were given the opportunity to have an economic expert speak before the council, but they declined.”
• Bradbury, a minute later: “I mean, Vanderbilt is right there.”

This isn’t over — a lease and development agreement still have to be finalized, among other things — but it’s over in the same way that the Buffalo Bills owners are most definitely getting $1 billion in public money for a stadium even if all the t’s aren’t crossed yet. That makes two billion-dollar-plus NFL stadium subsidies approved in one year, which is probably appropriate in what’s become the year of the billion-dollar-plus corporate subsidy deal. I look forward to reading someone’s fly-on-the-wall recounting of how the vote wrangling for this one went down, if there are any journalists left with the time and inclination to tackle it.