How NFL money to help fund a new Bills stadium - Update NYS & and Erie County agree to pay nearly $1 billion. Owners meeting $200 M Vote

[boater]

12 hours ago, JaCrispy said:

This might be a dumb question, but would the Pegulas own the new stadium after it is built?

 

I only ask because I thought I heard somewhere that they would be paying a lease on the new stadium like they do Highmark Stadium...

Pegs would be renters from the county. Which surprises me.. how many renters do you know pay for the house the landlord is building? It's nonsensical.

 

[boater]

8 hours ago, JakeFrommStateFarm said:

Mercedes benz was opened in 2017 at a cost of 1.5 billion. It has a retractable roof.

 

Rams owner almost payed for his entire stadium by himself with very little public financing. He makes his money back in PSLs and corporate luxury boxes. Sofi stadium was 5B

oh yeah... that same formula will work in WNY... NOT.

 

Corporate boxes are slim pickings, M&T Bank can only take you so far. PSLs will go over like a fart in church.

[RiotAct]

1 hour ago, boater said:

oh yeah... that same formula will work in WNY... NOT.

 

Corporate boxes are slim pickings, M&T Bank can only take you so far. PSLs will go over like a fart in church.

don’t forget Mighty Taco, Rachels, and the BFLO Store!

[Mr Info]

1 hour ago, BUFFALOBART said:

I'm 34 years in, but when the PSL's hit, I am OUT.

I have made this same comment in similar threads. PSLs already exist for Club Seats. I have seen it on my invoice but unsure how much %. Certainly, these would be more expensive in a new stadium and prob extend to all seats. But PSLs have been in effect for Club Seats for a while and has not resulted in reduction in demand. 

Edited March 27, 2022 by Mr Info

[ganesh]

On 3/26/2022 at 3:04 AM, TheyCallMeAndy said:

So NFL pays 200m, taxpayers pay the rest?

The Pegulas will be on the hook for another 200M

[Doc Brown]

6 hours ago, BUFFALOBART said:

I'm 34 years in, but when the PSL's hit, I am OUT.

I remember me and my brother driving home in just my boxers after the '08 Giants game because my clothes were soaked and there was a 50/50 chance I had frostbite.  That was mine "I'm done" as far as season tickets go.  I'm interested to see how they do control for weather and maybe I'll be in again.  This team is too fun to watch.

[nucci]

10 hours ago, boater said:

oh yeah... that same formula will work in WNY... NOT.

 

Corporate boxes are slim pickings, M&T Bank can only take you so far. PSLs will go over like a fart in church.

how, people will laugh?

[ddaryl]

15 hours ago, Mr. WEO said:

 

 

In 2021, the revenue given (through league revenue sharing) equally to every team was 274 million.  The salary cap was 183 million.  

 

So every team every year has their player and staff salaries covered, without selling a single ticket or jersey yet, whether the team is a perennial playoff contender or the worst in the league.

Insurance, utilities, coaches, trainers, office personnel, Janitorial, Stadium Maintenance, out of pocket upgrades to facilities etc.....

The NFL and its franchises are a business's and that money is not free it was generated by a successful business model. Bills still are not "raking it in:" after expenses etc... IMO

Can the  Pegulas afford their share of $200 - $500 million... Sure but I just disagree with the thought process that the Pegula's are making money hand over fist being the owner of the Bills.. They poured a lot of it back into the franchise.

[SlimShady'sSpaceForce]

12 hours ago, boater said:

Pegs would be renters from the county. Which surprises me.. how many renters do you know pay for the house the landlord is building? It's nonsensical.

 

many companies build property on land owned by another party.   
 

mine did so about a decade ago.

[Mr. WEO]

25 minutes ago, ddaryl said:

Insurance, utilities, coaches, trainers, office personnel, Janitorial, Stadium Maintenance, out of pocket upgrades to facilities etc.....

The NFL and its franchises are a business's and that money is not free it was generated by a successful business model. Bills still are not "raking it in:" after expenses etc... IMO

Can the  Pegulas afford their share of $200 - $500 million... Sure but I just disagree with the thought process that the Pegula's are making money hand over fist being the owner of the Bills.. They poured a lot of it back into the franchise.

 

 

Yes, there's plenty for that in the shared revenue sum as well (for every team).  The Forbes numbers for "operating margin" are "earning before interest, taxes, depreciation and amortization"---after all of the expenses you have listed have been accounted for.  383 million of that over 8 years.

 

The county owns the stadium so it pays for any stadium janitorial and maintenance.  Pegula has chipped in a one time 35 million for the stadium upgrades a few years ago. 

 

The money is free because no single team had to earn it.  It's mainly from TV contracts, the rest from merchandising and NFL Ventures.  So, really, the most popular teams in the league generate a ton of TV and merchandise revenue that then goes to teams that really don't.  That's free money.  How many other businesses can you name where competitors have to give money to others who can't generate as much money?

 

Either way, the Bills are certainly raking it in, compared to what they contribute proportionally to the NFL.

[SoCal Deek]

19 minutes ago, Mr. WEO said:

 

 

Yes, there's plenty for that in the shared revenue sum as well (for every team).  The Forbes numbers for "operating margin" are "earning before interest, taxes, depreciation and amortization"---after all of the expenses you have listed have been accounted for.  383 million of that over 8 years.

 

The county owns the stadium so it pays for any stadium janitorial and maintenance.  Pegula has chipped in a one time 35 million for the stadium upgrades a few years ago. 

 

The money is free because no single team had to earn it.  It's mainly from TV contracts, the rest from merchandising and NFL Ventures.  So, really, the most popular teams in the league generate a ton of TV and merchandise revenue that then goes to teams that really don't.  That's free money.  How many other businesses can you name where competitors have to give money to others who can't generate as much money?

 

Either way, the Bills are certainly raking it in, compared to what they contribute proportionally to the NFL.

So if your numbers are correct that works out to approximately $40 million per year on a $1.5 billion investment. Once again…not a stellar margin by any investment measuring stick. Now, if he puts down another $1.5 billion on a stadium, that puts his rate of return at less than 2.0%. (Less than the typical rate of inflation.) Would you make that investment? 

[ddaryl]

1 minute ago, Mr. WEO said:

 

 

The money is free because no single team had to earn it.  It's mainly from TV contracts, the rest from merchandising and NFL Ventures.  So, really, the most popular teams in the league generate a ton of TV and merchandise revenue that then goes to teams that really don't.  That's free money.  How many other businesses can you name where competitors have to give money to others who can't generate as much money?

 

Either way, the Bills are certainly raking it in, compared to what they contribute proportionally to the NFL.

Disagree the business is the NFL, the franchises are part of the business under the NFL umbrella. Franchises are not in fiscal competition with each other. The revenues are shared to help maintain the league, which is the business. This also ensures a solid distribution of fans in multiple territories. This in turn brings more value to the NFL. Get rid of revenue sharing and so many teams would either fold up,  be perennial bottom feeders, and/or half the league would be fighting to move to new homes in the largest populated areas with the biggest wages. Most likely that would start to eat at viewership and over all NFL value. I know I would lose interest if the league was all top/high market teams. This eventually would start eating at the overall profits. Franchises have the ability to maximize their profit margins but the TV contracts belong to the NFL and are distributed equally because of the vast fiscal differences in the NFL markets. Parity has proven to bring stability and has increased NFL revenues

There are some balances with socialistic, and capitalistic values to the NFL business, and those values are proving to actually bring more value to the NFL by creating a balance of Wealth in the NFL and allowing the game to thrive in high populated high wage areas as well and Lower populated blue collar markets.

 

The Bills TV viewership has always been decent and has increased a bunch as the Bills started winning. So the Bills are doing their part considering the region 

Now if you had $1.4 billion to invest, the NFL is not any where's close to the best business decision for your money.  They are making large equity on their investment but the only way to tap into equity is to sell, or take out a loan against your business. I don't thank the Pegulas' or any NFL team is getting "free money" They are receiving their equal distribution of revenues well deserved for a $1.4 billion + investment and they do well re-investing back into it.

[WhoTom]

10 minutes ago, SoCal Deek said:

So if your numbers are correct that works out to approximately $40 million per year on a $1.5 billion investment. Once again…not a stellar margin by any investment measuring stick. Now, if he puts down another $1.5 billion on a stadium, that puts his rate of return at less than 2.0%. (Less than the typical rate of inflation.) Would you make that investment? 

 

Much like a yacht, a private jet, and a hot sports car, an NFL team is a luxury and a status symbol, not an investment. And unlike the aforementioned luxuries, the team increases in value over time, while the others depreciate. 

 

 

[nucci]

3 minutes ago, WhoTom said:

 

Much like a yacht, a private jet, and a hot sports car, an NFL team is a luxury and a status symbol, not an investment. And unlike the aforementioned luxuries, the team increases in value over time, while the others depreciate. 

 

 

if your business turns a profit of $50M-$70M a year, that's kind of an investment. You mentioned increase value over time...again that's an investment. 

[oldmanfan]

You want to be a major league sports city, it’s the price you have to pay.  Not saying it makes financial sense but it’s just reality.

[Mr. WEO]

2 hours ago, SoCal Deek said:

So if your numbers are correct that works out to approximately $40 million per year on a $1.5 billion investment. Once again…not a stellar margin by any investment measuring stick. Now, if he puts down another $1.5 billion on a stadium, that puts his rate of return at less than 2.0%. (Less than the typical rate of inflation.) Would you make that investment? 

 

As I have stated several times already, the 1.4 billion initial investment will have doubled in less than 10 years.  Why haven't taken that into account?  The annual profit is just a nice dividend on his initial investment--with zero risk. 

 

If I had billions I would jump at the chance to buy the least expensive NFL franchise.  You would have to be crazy not to.  Guaranteed income, guaranteed appreciation, zero investment risk, unimaginable exclusivity and prestige....is that a serious question?? lol

 

1 hour ago, ddaryl said:

Disagree the business is the NFL, the franchises are part of the business under the NFL umbrella. Franchises are not in fiscal competition with each other. The revenues are shared to help maintain the league, which is the business. This also ensures a solid distribution of fans in multiple territories. This in turn brings more value to the NFL. Get rid of revenue sharing and so many teams would either fold up,  be perennial bottom feeders, and/or half the league would be fighting to move to new homes in the largest populated areas with the biggest wages. Most likely that would start to eat at viewership and over all NFL value. I know I would lose interest if the league was all top/high market teams. This eventually would start eating at the overall profits. Franchises have the ability to maximize their profit margins but the TV contracts belong to the NFL and are distributed equally because of the vast fiscal differences in the NFL markets. Parity has proven to bring stability and has increased NFL revenues

There are some balances with socialistic, and capitalistic values to the NFL business, and those values are proving to actually bring more value to the NFL by creating a balance of Wealth in the NFL and allowing the game to thrive in high populated high wage areas as well and Lower populated blue collar markets.

 

The Bills TV viewership has always been decent and has increased a bunch as the Bills started winning. So the Bills are doing their part considering the region 

Now if you had $1.4 billion to invest, the NFL is not any where's close to the best business decision for your money.  They are making large equity on their investment but the only way to tap into equity is to sell, or take out a loan against your business. I don't thank the Pegulas' or any NFL team is getting "free money" They are receiving their equal distribution of revenues well deserved for a $1.4 billion + investment and they do well re-investing back into it.

 

 

The bolded is proof as to why my post is accurate (and why there will never be a serious challenge to the NFL's "antitrust exemption").  Without the hundreds of millions of free money to every franchise, teams like the Bills in Buffalo would have no value whatsoever.  With the shared revenue, the value rises every year for every team, no matter how awful the product on. the field is.  No other business operates like this (each team is a separate business).

 

The highest revenue generating teams and those in the biggest TV markets are driving the overall league annual revenue.  All teams are getting "equal distribution", but they are not getting an amount proportional to what they contribute to league revenues, so it is not exactly "well deserved".  Do the Browns deserve equal shares despite showing zero interest in putting a competitive product on the field that no one in the country wants to watch?  Of course not, but they do.  So it is money they get but that is not earned.  Therefore, it I free money.  

 

As for return on investment, any asset's value is its actual or estimated sale price.  No sense pointing that out in regard to a major sports team. 

[Billy Claude]

 

3 hours ago, SoCal Deek said:

So if your numbers are correct that works out to approximately $40 million per year on a $1.5 billion investment. Once again…not a stellar margin by any investment measuring stick. Now, if he puts down another $1.5 billion on a stadium, that puts his rate of return at less than 2.0%. (Less than the typical rate of inflation.) Would you make that investment? 

 

It is true that owning the Bills are not a great rate of return although it is completely unfair to not include appreciation.  

 

However, you have to include risk factors when evaluating an investment.   Owning a NFL team must be one of the lowest risk investments you can make since costs are controlled (versus the NBA, MLB or soccer).  Even if they lost money in 2020, I bet they made up for a lot of it in 2021 due to the lower salary cap.

 

I do agree that most owners are primarily in it for the ego trip.  Profit is important but secondary.

 

 

 

Edited March 27, 2022 by Billy Claude

[WhoTom]

2 hours ago, nucci said:

if your business turns a profit of $50M-$70M a year, that's kind of an investment. You mentioned increase value over time...again that's an investment. 

 

Agreed, but it's not like an investment that's intended purely for making money. People are comparing it to the stock market; my point is that it's not that type of investment. It's more of an expensive toy or a membership card to a very exclusive club, but it also happens to make money.

 

 

[SectionC3]

3 hours ago, SoCal Deek said:

So if your numbers are correct that works out to approximately $40 million per year on a $1.5 billion investment. Once again…not a stellar margin by any investment measuring stick. Now, if he puts down another $1.5 billion on a stadium, that puts his rate of return at less than 2.0%. (Less than the typical rate of inflation.) Would you make that investment? 

I totally agree with this.  But doesn’t this analysis ignore appreciation?  COC is not a good measuring stick for an NFL franchise value.  But mix the float in the value of the franchise in and all of a sudden it’s not so bad. 

[TheFunPolice]

So now that the downstate baseball and basketball teams got their arenas/stadiums done with public money and it's WNYs turn we suddenly have found our moral outrage.

 

These deals are getting done regardless so why should our community take the hit and not get the same treatment? 

 

Don't worry... They will feel really, really bad for us when the team leaves. Plus, then we'll have the extra money to build another stadium in NYC!

 

After all, we'll have seen the damage that the Bills leaving did and we get it now and can't let that happen again.

 

Sorry I'm not in favor of losing our team. If you argue against the deal you are arguing for the Bills to relocate. It's that simple.

 

 

 

 

Edited March 27, 2022 by TheFunPolice