Lease Negotiations Mean The Buffalo Bills May Be Moving

By:  John Fabiano, Ruling Sports Intern (Twitter:  @Fabs5180)

This Sunday, for the 40th straight year, the Buffalo Bills will host their home opener at Ralph Wilson Stadium in Orchard Park, New York.  “The Ralph” is the 7th oldest NFL stadium, and is the only one located in the state of New York.

The Bills lease agreement with Erie County is set to expire next July, and the two sides have been negotiating terms of a new deal for a majority of the summer.  It was initially hoped that a new deal would be struck by the start of training camp, but the flexible deadline was extended to the end of this year, as negotiations will continue throughout the season.

The Bills plan to make substantial renovations to the stadium in the near future.  Last year, the team paid an architectural firm about $500,000 to inspect the stadium and estimate the price tag on renovations that would both enhance the fans’ game day experience and bring revenue to the franchise.  The improvements are estimated to cost between $200 million and $220 million.  The source of financing has been at the center of negotiations.

The division of cost will be between the team, county, state, and possibly the NFL.  Both the county and state make money off the Bills playing in Erie County, so they have good reason to put forward money to keep the team in the area.  Annually, the Bills are estimated to generate between $15 million and $20 million in state taxes.

The team can also utilize the NFL’s G-4 loan program, under which the NFL will match a team’s investment for upgrades or a new stadium.   The loans are then paid back over the course of 15 years based on revenues from premium seating. The Packers and Chiefs are two teams that have taken advantage of the G-4 program to make significant stadium improvements to older stadiums.

There is one clause deterring the Bills from taking out a G-4 loan without thinking twice. The “due at sale” clause states that if a team is sold, the owner is required to pay the entire remaining balance upon sale of the team.  This isn’t a problem for most teams, but the Bills have a 93-year-old owner in Ralph Wilson who was hospitalized last week due to his ailing health.  Wilson has repeatedly stated that his plan is to leave the team to his heirs and have them sell the franchise.

If the Bills are to participate in the G-4 program, and the team does go up for sale in the future, any potential buyer will know that they will have a G-4 loan to pay off immediately upon purchase of the team.  This could weaken the value of the franchise, which Forbes recently estimated to be $805 million.

Senator Charles Schumer recently held a press conference at Ralph Wilson Stadium where he presented possible changes to the G-4 program that could help teams that have displayed ownership stability.  He suggested that Commissioner Goodell waive the clause for teams that have had the same owner for over 20 years.  Doing so would allow the Bills to take advantage of the program and would help facilitate negotiations.

Both Erie County and the Bills have stated that they are committed to keeping the Bills in Buffalo.  As a small market team, the Bills are repeatedly brought up as a team that could be moved to Los Angeles.  The county will probably try to add relocation fee to the agreement, which would have to be paid to the county upon relocation of the team.  This would help deter any potential suitors that plan to buy the Bills with the intention of turning them into the L.A. Bills.

There is plenty of time left to hammer out a deal, and everyone in Buffalo is hoping negotiations continue to progress.  All Bills fans want is some stability to a franchise that has been an integral part of the Buffalo community for over 50 years.

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