NFL Report:  The Commissioner's View  --  Summer 1999
INVESTING IN STADIUMS

Building new football stadiums is no simple task. It takes commitment, creativity, funding, and hard work across a wide spectrum of interests to develop the public-private partnerships necessary to produce modern stadium facilities.

To help meet this challenge, the NFL clubs recently improved and expanded their ability to support new stadium construction.

Since the late 1980s, NFL owners collectively have made–and will continue to make–substantial contributions toward stadium projects in a manner unmatched by any other sports league. These investments include commitments by the local NFL club owner supplemented by the use of other NFL funds that normally would go to visiting teams under our revenue-sharing rules. This collective funding is the NFL’s share of the public-private partnership that is formed to finance stadium construction.

Under the previous program, the use of visiting-team revenue in stadium funding meant that the home team was allowed to keep over a specific number of years the standard 34 percent share of club-seat premiums that normally goes to the visiting team–as long as those funds were used to reduce stadium construction loans. This revenue-sharing policy enabled NFL owners to help each other and their communities build new stadiums.

Over the past year we studied ways to improve this program. At our March league meeting this year, the teams approved Resolution G-3, revising the way these league stadium investments are made and strengthening our ability to contribute to stadium projects in large-market cities.

The new procedures are designed to assist current NFL teams with stadium projects in their existing markets. The program allows such teams to qualify for upfront loans from the NFL in the amount of 34-50 percent of the private contribution to a public-private stadium project. Stadiums in the major markets qualify for the 50 percent loan.

These loans are approved by a vote of the clubs on a case-by-case basis and will be repaid to the league principally out of visiting team club-seat premiums. However, the loans also will be backed by PSLs (permanent seat licenses), if PSLs are sold to help fund a stadium project, and by the league’s network television revenue. The balance of the loan would have to be repaid to the league by the team if the team is sold before the loan is retired.

The revised program creates more favorable terms for the private contribution to NFL stadium projects by shifting the burden of our club-seat financing arrangements from individual teams to the league. This increases our ability to participate in the building of new stadiums, especially in our largest cities. We also expect the policy to produce a positive impact in terms of securing other necessary construction financing for these projects.

At our May league meeting, the first loans under the new program were approved by a vote of the clubs. The league investments will help fund new stadiums for the New England Patriots, Philadelphia Eagles, and Denver Broncos.

We believe new stadiums in our existing cities are a good for everybody–teams, fans, and communities. Among other factors, new stadiums enhance franchise stability, which was a major part of our thinking in formulating the G-3 Resolution.

As a league we are committed to working as partners with our communities to address these important stadium issues. The expanded NFL financing program will improve our ability to develop the type of public-private stadium projects that work in the best interests of all concerned.