Tom Posted November 3, 2006 Share Posted November 3, 2006 Giants, Jets hit NFL with $300 million stadium bill Friday, November 03, 2006 BY MATTHEW FUTTERMAN Star-Ledger Staff Giants co-owner John Mara has told the National Football League his team and the Jets will not build a new, shared stadium in the Meadowlands unless they receive $300 million in funding from the league, according to several NFL owners. Mara's ultimatum, delivered at the NFL owners' meeting in New Orleans last week, comes as the league mulls the Giants' and Jets' controversial application for what has become known as "G-3 funding." The money has helped 10 other NFL teams build or renovate stadiums since 1999, with as much as $150 million in league subsidies for each building. The Giants and Jets have spent months studying how to finance their planned $1.2 billion stadium with or without the money from the NFL, but they have privately concluded the project will be too expensive and risky without the league's support. Publicly, the teams are acting more diplomatically, not wanting to anger or embarrass their fellow owners as they seek their support. In a statement, Alice McGillion, a spokeswoman for the joint stadium venture, said the teams' application for G-3 funding is "going through the normal review process and we expect to be able to work through any related issues. We are anxious to move forward and we are not considering any other alternative." Mara and Jets owner Woody Johnson declined comment for this story and other owners declined to be identified to avoid breaking the league protocol against discussing specific internal disputes. The teams' difficulty in securing league funding has caught state officials off guard. Former Gov. Richard Codey, who engineered the deal for the stadium last year, first with the Giants and later with the Jets, said when the teams and the state agreed to move ahead with the project it was not contingent on $300 million from the NFL. However, at the time, the teams expected the stadium to cost $800 million to $900 million. Now, with prices for labor and construction materials rising, the teams expect the stadium could cost as much as $1.3 billion, and the NFL funding has become vital. "The commissioner's office was always behind this, so I'm still hopeful it's going to happen," Codey said this week. In part, the planned 80,000-seat stadium at the Meadowlands is becoming a victim of its expected success. With 200 luxury suites, 10,000 premium club seats and a naming rights deal that will likely produce as much as $20 million a year, the new stadium is expected to produce more than $100 million a year in gross revenues for each team, and $22 million in profits. Since 1999, NFL owners, who share much of their revenues, have helped subsidize construction of stadiums by giving up the visiting team's one-third share of club seat receipts in the new buildings. Funding has been limited to $150 million for each facility, but since the Giants and Jets will share this stadium, they want $300 million. The potential problem for everyone -- except the Giants and Jets -- is the money the stadium generates goes into the pot of the NFL's total football revenues. Under the new collective bargaining agreement with the Players' Association, the players receive 59 percent of the total football revenues. When the revenues go up, so do the players' salaries and, according to the league's projections, the new stadium's expected success will force teams to spend an additional $2 million a year on salaries each year from 2010, when the stadium is expected to open, until 2024. So, for example, a small-market team such as Buffalo could see its expenses rise significantly even though its revenues don't get much of a bump. "The discussion going on is about whether G-3 should be extended or revised and what should the stadium finance program be going forward," said Greg Aiello, the NFL's chief spokesman. Reached at his home in Dallas yesterday, Kansas City Chiefs owner Lamar Hunt said the Giants-Jets application presents a conundrum for the league. "The facts and figures seem to show that maybe there's been a disparate effect -- that the beneficiaries are the teams seeking the G-3 and the players, while the others, in this case 30 or 31 teams, are penalized -- not intentionally -- by a major increase in the player aspect of it without proper credit given." Hunt said the NFL may have to return to the bargaining table and seek concessions from the Players' Association because "for us to go blindly ahead with a project that's going to hurt the other 30 teams would not be the way to go." Both the Giants and Jets have approved every other G-3 application that has come before the league the past seven years. G-3 applications must receive support from three-quarters of the league's owners. In addition, the Giants' decision to give up their lucrative local television rights 40 years ago and enter into a national television contract with the other franchises is credited with making the NFL the cash cow that it is today. Now the team, as well as the Jets and state officials, are hoping the Giants receive the same support they once gave. "I would hope everyone recognizes having a first-class, premiere facility for these two franchises as a flagship for the league would be beneficial for every team owner," said Carl Goldberg, chairman of the New Jersey Sports and Exposition Authority, the state agency that operates the Meadowlands. Staff writer Paul Needell contributed to this story. Matthew Futterman may be reached at mfutterman@starledger.com Link to comment Share on other sites More sharing options...
ExiledInIllinois Posted November 3, 2006 Share Posted November 3, 2006 This is what happens when you "socialize" sport or society... Quite a mess... And quite complicated... Just let everything fall where they may and do what baseball does... Trust it all to what the market will hold, under good ownership (what Ralph has shown historically)... A team like Buffalo will be fine... Just my $.02... But... All the commies out there what everything to be share this, share that. Sport is about crushing your opponent and believe me there will be plenty of takers to try and get a crack at the "top dog"... Competition won't get wiped out, it will expand... Natural forces will doom the owner that "over reaches." Link to comment Share on other sites More sharing options...
nick in* england Posted November 3, 2006 Share Posted November 3, 2006 G-3 was a terrible idea, and the example about the player pot having to rise as a reuslt of new stadia is a shining example of why the new CBA is a crock of sh--. Let's face it - either you go for a solution where you share revenue equally accross the board, so no team is particularly penalised or congratulated for business performance (NFL is the product, not the individual teams) or you do the opposite and have a proper open market. This hybrid we have now doesn't really work for anyone (expect the bigger market teams a little). Link to comment Share on other sites More sharing options...
MadBuffaloDisease Posted November 3, 2006 Share Posted November 3, 2006 Yep. The G-3 program gives essentially free money to help build a new stadium, while the owner pockets ALL of the "local" revenue generated by it. If anything, the rise in ticket prices boosts the shared revenue portion, but that's about it. Link to comment Share on other sites More sharing options...
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