Stadium Renovations Grow In Importance For NFL Teams’ Super Bowl Bids

By:  Maya Burchette, Ruling Sports Intern (Twitter:  @MayaBurchette)

NFL owners recently voted on the location for the 2016 and 2017 Super Bowls and one theme was apparent in their decision:  New stadiums are a must.  

The NFL owners awarded the 50th Super Bowl to the San Francisco area and gave the 51st Super Bowl to Houston, shutting out Miami and effectively sending a message to the city about the need for stadium renovations before the league’s showcase game returns. Recently, the NFL has shown a habit of awarding its championship game to cities with new stadiums. Indianapolis held the Super Bowl in 2012, four years after their new stadium had been opened.  Dallas hosted the 2011 Super Bowl less than two years after the new Cowboys Stadium had been built.  Next year’s marquee game will held in New York at MetLife Stadium, which opened in 2010.

NFL teams across the board have begun to recognize the importance of new stadium amenities as an important factor in competing with the at-home fan experience.  As the at-home fan experience has become better and cheaper, while the in-stadium experience has become more expensive, the lure of updated stadium facilities is one thing NFL teams are utilizing to attract fans to their games. The 49ers and the city of Santa Clara partnered recently to build a new stadium that will feature cash-free concessions and ticketless entry. Software engineers are already creating apps for cell phones that will allow fans to order food, watch instant replays, listen to play-by-play and check bathroom lines from their seats. Spending nearly $916 million dollars, it appears that the 49ers and Santa Clara voters’ investment has paid off with the reward of the hosting the 2016 Super Bowl.

Earlier this year, the city of Atlanta announced that it would issue $200 million worth of public bonds to help get the Falcons’ new $1 billion retractable-roof stadium built.  As a result, NFL owners approved a $200 million loan that will go into the stadium fund. Under the newest Collective Bargaining Agreement between the NFL owners and NFL Players Association, the NFL G-4 Resolution allows teams to receive matching dollars on favorable terms from a league loan pool for investments they make in renovating their stadiums. These loans could bring the total amount available per team for new stadium construction to $200 million. Specifics of G4 financing from the NFL include: up to $200 million for new stadium construction; up to $250 million for stadium renovation; and repayment of G4 financing by the team over 15 years through revenues related to premium seating.  Per the collective bargaining agreement, loans will be given to teams on a case-by-case basis by the NFL.  Additionally, G4 loans are available to only public-private stadium projects.

Other cities seeking to improve their NFL stadiums haven’t been so lucky in securing public-private financing.  Miami’s latest Super Bowl bid failed after the team could not secure public funding from the state legislature. The Dolphins said their stadium needed $350 million in improvements to make it competitive in the Super Bowl market and team owner Stephen Ross has made it clear he is unwilling to pay the entire bill himself.  However, the Florida House of Representatives failed to bring the proposal up for debate before the close of the last session despite many indications that the measure would pass.  After the measure was not set for referendum, Ross maintained that he must receive some public money to pay for improvements.

Miami’s stadium woes will have both a short and long-term economic impacts on the area.  Most notably, Ross was quoted saying that the renovation project could have created around 4,000 jobs in the Miami-Dade area.  Additionally, a recent economic study released by the 2013 New Orleans Super Bowl Host Committee found that Super Bowl XLVII produced an economic impact of around $480 million for the region and generated nearly $21.0 million of state tax revenue from, sales, hotel, gambling, and income taxes. These state tax collections included $13.1 million in direct state taxes paid from visitor spending within the local economy plus $7.9 million of indirect tax revenues resulting from the earnings attributable to organizational, media and visitor spending.

In order for the Dolphins to compete with the at-home fan experience they must modernize their stadium either by making improvements to the current facility or by moving into a new venue. Both options require a compromise between Dolphin ownership and the Florida legislature about the amount of public funding needed. Until the stadium condition is resolved Miami’s Super Bowl prospects will remain slim.

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