The Capitalist Investor - Episode 132 It’s more than touchdowns, football is a business just like everything else. In Episode #132 of “The Capitalist Investor,” Derek, Luke, and Tony discuss a local debate here in Cleveland –– the chances of a new billion-dollar Browns stadium. Fan or not: this week’s episode focuses on the economics behind football stadiums, public tax funding, local infrastructure, and city revenue generation. It’s not just about Cleveland, it’s any city with a major team looking to generate more revenue and amplify infrastructure. But when it comes to billion-dollar stadium projects, who’s going to fund it?Outline of this Episode:[2:05] Resurfacing the stadium debate[3:30] Economically… What will a dome bring?[12:50] It’s not just Cleveland… It’s every city[16:20] The business of NFL players todayThe fate behind the Browns stadium raises debate and speculation in the NFL worldCleveland, Buffalo, and Green Bay are the three front runners for the most miserable places to watch a football game during the winter. As summer slowly advances towards the beginning of football season, sportscasters are running out of news to talk about; instead, they’re discussing age-old debates and raising speculations. This past week, the Cleveland Browns have been scurrying to clarify rumors about seeking a new billion-dollar stadium –– one with a roof –– after stories published about the team’s vague plans for the stadium when the current lease expires in 2028. While the team issued a statement saying they intend to renovate and improve the current stadium, many are skeptical that the Haslams, the team’s owners, are just trying to delay the announcement of a new stadium project and ward off opposition from the city and its taxpayers. Appearing as simple rumors and issued statements, the stories have raised quite a debate not just in Cleveland, but within the entire NFL sphere. It’s something the city and its fans have called for since the team returned there in 1999. The current stadium sits right on the lake, and when winter hits, the wind whips off of it creating a miserable environment in the open-air portion of the stadium –– fans are left defenseless against the cruel elements. To no surprise, these newest rumors are gaining quite a bit of supporters. Brand new stadium projects for the Chargers, Rams, Raiders, and the Cowboys have all been welcomed in the past, with the Bills being the most recent team to approve a new state-of-the-art stadium deal in Buffalo. New football stadiums come with large price tags and economic impactsIt wouldn’t be a debate if there wasn’t an opposition. When it comes to new stadium projects in cities, there is always a price tag attached –– one that is often passed along to the city’s taxpayers. A new billion-dollar stadium would undoubtedly request some funding from public tax dollars; the people in Cleveland are skeptical that it would directly benefit them and bring extra demand to the city. Massive infrastructure projects can’t be successful without economic benefits like eliminating vacancies, generating jobs and employment, or bringing in tourism revenue.So how much business would a new Brown’s stadium bring to Cleveland? Everything is a business and when you’re taking money from the public to fund certain projects, there has to be actual revenue generation for the city that will economically lift the public and not harm their checking accounts. Maybe a new stadium will create a better football team, maybe it won’t. But what’s certain is that a project like this will require heavy funding. Our biggest concern is: who would fund that thing? What’s a fair way to share the cost of these stadiums?When the Cowboys introduced plans for the $1.3 billion AT&T Stadium in 2009 –– one of the world’s largest domed structures –– it became a duel between them and the city of Arlington. Although the NFL funded $150 million and the Cowboys covered the rest, the city and its taxpayers still provided over $300 million, including interest, in funding. SoFi Stadium is home to the Los Angeles Rams and Chargers and is today’s most expensive stadium costing about $5.5 billion. While costing over $3 billion more than the second most expensive stadium, it was entirely privately funded by Rams owner Stan Kroenke. California taxpayers didn’t pay a cent towards it. There have been many advantages for building these stadiums like tourism growth and Super Bowl bids. Los Angeles and Arlington really negotiated these deals well for their cities and its taxpayers –– Cleveland would have to do the same. If the money and those tax dollars are invested properly, they could channel great business and generate a lot of revenue for the city and its people. But Cleveland has some other areas they should consider utilizing and investing in more beforehand. Maybe instead of a new stadium, the city could invest a billion dollars in infrastructure around its lakefront with new retail spaces, real estate, hotels, boardwalks –– places that can be and need to be put to better uses. Once again, this whole debate is just based on rumors and speculation. But when the public’s money is on the line, it’s not a joke. Owning a football team and having one in your city isn’t a joke either. What was once an ego battle among owners, is now a business venture. There’s just so much money involved today. Connect With Mark TepperTwitter: @MarkTepperSWPFollow Mark on LinkedInSend Mark a message hereThe SWP Connect YouTube ChannelConnect with Derek GabrielsenTwitter: @DerekGabrielsenFollow Derek on LinkedInSend Derek a message hereCheck out Derek’s YouTube channel!Connect With Luke LloydTwitter: @LloydBoyLukeFollow Luke on LinkedInSend Luke a message hereThe SWP Connect YouTube ChannelConnect with Tony ZabiegalaTwitter: @TonyZabiegalaFollow Tony on LinkedInSend Tony a message hereThe SWP Connect YouTube channel!
