Fans could hold key to new stadium puzzle
• By David Hunn
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ST. LOUIS • The costs of National Football League stadiums are rising. The portion covered by taxpayers is dipping.
And that leaves team owners looking to an old source to fill the gap:
Their fans.
Across the country, owners are selling personal seat licenses to help fund new billion-dollar glass-and-steel arenas. The seat licenses aren’t game-day tickets. Instead, they give fans their own spot in a new facility, and the right to buy season tickets every year.
Seat licenses have long been used. St. Louis sold about $80 million worth when enticing the Rams from Los Angeles.
But now they’re providing nine-figure stadium funding — a source planners here will lean on again.
San Francisco 49ers officials said last week that their seat-license program, which charged $80,000 for a high-end seat, raised $530 million toward the team’s $1.3 billion arena in Santa Clara, which opened last year.
The Atlanta Falcons, now working on a $1.4 billion stadium to replace the Georgia Dome, recently revealed that top seat license prices will rise to $45,000.
And the Minnesota Vikings surpassed goals toward $125 million in seat licenses for the team’s $1.1 billion downtown stadium, set to open next year.
Lester Bagley, the Vikings’ executive vice president for public affairs and stadium development, said the team didn’t have much of a choice. It had to replace the Metrodome. “We were at the bottom of the league in virtually every revenue category,” he said. “We built the stadium because we could not have survived in this market in that stadium, long-term.”
Here, in St. Louis, seat licenses are a pillar in the nearly $1 billion proposal to build a new football stadium rising along the Mississippi River downtown.
Early this month, a two-man team appointed by Gov. Jay Nixon revealed preliminary details of a plan to build a new football stadium here, and, perhaps, keep the Rams in St. Louis.
The two, former Anheuser-Busch President David Peacock and current Edward Jones Dome attorney Robert Blitz, pitched a riverfront arena on largely vacant land north of downtown.
Peacock and Blitz leaned on financing in other facilities when they crafted their plan. They incorporated $200 million in NFL loans — as has each recent new building. They included a $200 million match from Rams owner Stan Kroenke, as is required by the NFL loan. They estimated that extending payments on debt for the 20-year-old Edward Jones Dome, where the Rams now play, could provide another $350 million or so.
And the last major contribution? The sale of as much as $130 million in seat licenses.
Peacock has declined to discuss the seat licenses. Will Jones Dome seat license holders get preferential treatment? Will they get discounts? How much will the new seat licenses cost? Can the team sell enough to raise that kind of cash?
“We don’t know yet,” Peacock said after the initial announcement. “We have an understanding of what the value could be. Teams have done a lot of things. I think we have to acknowledge existing seat license holders.”
It’s an uncertain proposition for some fans.
“I wouldn’t buy another one,” said Larry Austell, a current Rams season-ticket holder. “I can see why it benefits the city and everything. But the bottom line is — what are you getting out of this?”
SKYROCKETING STADIUMS
In the 1990s, the decisions of two teams had a profound impact on stadium financing, say league observers.
The Rams left Los Angeles for St. Louis. And the New England Patriots tried to leave Boston for Connecticut.
The moves made the NFL rethink stadium financing. “The league said, ‘We’ve got to find a way to help teams stay in larger markets, so they’re not enticed by smaller markets that would give them free stadiums, or a significant public subsidy,’” said Marc Ganis, a stadium consultant and president of Chicago-based SportsCorp.
In 1999, NFL officials built a new loan program. It has since provided millions of dollars to stadium upgrades and rebuilds, and allowed owners to pay them off with ticket revenue and club seat premiums that would have gone back to the league anyway.
At the same time, stadium prices began to rise.
In 2009, owner Jerry Jones opened a $1.2 billion stadium for the Cowboys in Arlington, Texas. The next year, the $1.6 billion MetLife Stadium opened in New Jersey, home to two teams — the New York Giants and Jets.
To cover the cost, the Cowboys sold about $500 million in seat licenses; the Giants and Jets, selling separately, raised more than $600 million between the two of them.
It’s a new world, said Mark Lamping, the former Anheuser-Busch and St. Louis Cardinals executive who spearheaded construction of MetLife and is now president of the NFL’s Jacksonville Jaguars. Fans don’t want a beer and a hot dog alone. They want to check their fantasy football teams online. They want instant replays — and not one, but several, from different angles. They want fine dining.
At its core, it’s about filling stands, he said.
“It makes the TV product better,” Lamping said. “Players tend to perform better in front of a packed house. And full stadiums also mean a reasonable amount of local revenue is being generated.”
Because so much of the NFL’s national television revenue is shared, dollars that aren’t shared — parking, beer, food, stadium sponsorships, premium seating — are really important to owners, Lamping said.
“The key to the Jaguars becoming a very stable, sustainable franchise in Jacksonville is growing our local revenue,” Lamping said. “So everything we do — stadium improvements, relationships with media, who handles food and beverage — all of our decisions are measured against the metric of what it’s going to do to local revenue.
“The more local revenue you generate, the more stable your franchise is going to be, the more valuable your franchise is going to be, the more profitable your franchise is going to be.”
The St. Louis plan, Lamping said, is reasonable. It includes a nice mix of funding.
But as a smaller market, he warned, it will take more public funding than New York or San Francisco or Los Angeles.
And a stadium in Los Angeles — where Kroenke has promised to build — could handle two teams, get twice the NFL loan and sell double the number of seat licenses for, perhaps, twice as much.
for comparison
Minnesota may provide a comparable example for St. Louis.
And Vikings officials fought for years to line up public money.
“We spent 12 years at the Capitol battling to try to solve the issue of financing a new stadium,” said Bagley, the vice president for stadium development.
Bagley and others argued that public support would keep the Vikings in Minneapolis.
“There are only so many NFL teams,” Bagley said, “and many cities that would like to have one.”
Team officials also lobbied the Legislature that a new stadium downtown would benefit the state and spur development.
After a fight, the state agreed to pay $348 million toward a new stadium, adding to $150 million from the city.
Bagley said last week that stadium supporters already have proved their point. The new stadium is still in construction, and the neighborhood around it is already booming. City staff told him companies have taken out $2 billion in construction permits in the area, of which only half represent the stadium itself.
Moreover, he said, the new stadium already has secured the 2018 Super Bowl, and is in the running for collegiate basketball’s Final Four, college football’s Bowl Championship Series and even a Major League Soccer franchise.
During the debate over funding in the Legislature, opponents trotted out studies and experts showing no economic benefit to football stadiums.
“That’s simply not true,” Bagley said. “In fact, everything we said is coming true.”
There’s a long way to go in St. Louis. Stadium opponents are already voicing heated opposition, talking to legislators and issuing press releases. Legislators are arguing that they won’t extend state payments.
But even if all of that works out, the future of the NFL in St. Louis may rest with fans like Austell, the season ticket holder.
Austell, a retired sheriff’s deputy who lives in East St. Louis, said he paid $2,500 per seat for two seats before the Edward Jones Dome even opened. To get equivalent seats this time, he guesses he’ll have to pay an extra $1,000 — when he could just buy tickets online for each game.
“Don’t get me wrong, I enjoy being a season ticket holder,” he said. “I love football. Football is my No. 1 sport.”
Then Austell paused for a minute. If the stadium actually happens, he said, and he then begins to see progress on the riverfront — well, he just might change his mind.
Especially, he said, if the planned open-air stadium would add one more luxury: a retractable roof.
He’s 61. He doesn’t like the cold much anymore.
