NFL Teams Find Practice Makes Perfect Space for Sales and Sponsors
The NFL season opens this week, and in a multi-part series, Sportico is examining one of the main components of ever-rising team valuations: the stadium. With the cost of materials rising, stadiums have become more than just places to watch football, as teams seek to earn year-round revenue beyond the 10 games they host each season. This is the third installment of the series.
After years of complaints about the limitations of the Metrodome, former home of the Minnesota Vikings, the Wilf family, who bought the team in 2005, was poised to open U.S Bank Stadium in 2016. The fixed-roof stadium was hailed as a major upgrade from their former home, but team ownership wasn’t quite satisfied.
More from Sportico.com
So the Wilfs, who earned their fortune in real estate and commercial properties, turned their attention to the Vikings’ practice facility and headquarters. The team’s 40-acre site in Eden Prairie, Minn., where the franchise trained for 35 years, was becoming cramped and the opportunity to create a bona fide work, live and play community to allow staff—from top executives to summer interns—to work under one roof was too enticing to ignore.
The Vikings bought the former Northwest Airlines headquarters in Eagan, Minn., in 2015 and transformed it into a 200-acre campus called Viking Lakes that includes team headquarters and the TCO Performance Center. The suburban destination, which opened in 2018, also has a trail system, medical offices, 800 planned apartments, restaurants and an Omni Hotel. Soon, media conglomerate Thomson Reuters will open its corporate offices adjacent to the campus.
While the NFL is experiencing a boom of entertainments districts and mixed-use development around stadiums, there’s also a trend of owners like the Wilfs looking elsewhere to create a social and commercial environment that can leverage the excitement of a team fan base far beyond game day.
“The stadium is one piece of it, but these [training] facilities are such a hub, and there’s so much exposure in them,” Vikings president and co-owner Mark Wilf said in an interview. “They’re on TV and websites constantly as the NFL season is so powerful, and as that happens, people want to be around it.”
The franchise says its campus does 240 non-Vikings events per year, from high school football games to hosting the American Ultimate Disc League Championship. The events present revenue opportunities previously unavailable to teams.
“It’s not as much about the revenue as much as it is connectivity to the community,” Wilf said. “It’s a way for added connection besides just coming to the games on Sundays… This [development] broadens that reach and connection.”
With NFL stadiums often surrounded by occupied property, development of nearby entertainment districts isn’t always feasible for teams.
“When a stadium might be landlocked, and you’re going out to a look for a new practice facility site, you might see some opportunities that you literally don’t have on the canvas you’re working with around the stadium,” sports architect David Manica said in an interview.
A few teams, like the New England Patriots, with their practice facility directly behind Gillette Stadium and the mixed-use development Patriot Place, have their practice space adjacent to their home fields. But most have their training grounds and headquarters in less dense areas dozens of miles away from their Sunday workplace.
The Dallas Cowboys capitalized on this geography with the 2016 opening of The Star, a $1.5 billion mixed-use development on 91 acres in Frisco, Texas. Not only does the sprawling campus house their team headquarters and practice facility, but also shops, salons and a 12,000-seat indoor stadium.
The Los Angeles Rams, who have been temporarily practicing at Cal Lutheran University in Thousand Oaks, Calif., may create their own entertainment district in the LA neighborhood of Woodland Hills. The franchise has filed an application to move their temporary training facility to a 100-acre parcel, where the team envisions eventually building a permanent, new training complex and team headquarters.
While there are no concrete plans to create an adjacent sports-centric development, history would say it’s inevitable after Rams owner Stan Kroenke built a similar destination called Hollywood Park, a 300-acre mega development that includes an entertainment and retail district, all anchored by SoFi Stadium.
While much of this new wave of development near NFL training grounds has been done through public funding, Rams owner Stan Kroenke is one of the few owners who has purchased land outright, which provides him flexibility for what could become one of the largest real estate developments in the region.
More NFL owners are noticing the value and potential and are finding creative ways to leverage it.
An early version of the Josh Harris group’s financing plan to purchase the Washington Commanders included an arrangement to sell the team’s practice facility (OrthoVirginia Training Center) in Ashburn, Va., and then lease it back, according to someone familiar with the details. The arrangement, which was met with pushback from the league, would’ve allowed the group to free up about $300 million in capital that could be used toward the purchase of the team. The group eventually dropped the proposal before closing the $6.05 billion acquisition.
The plan never materialized but the thought process illustrates how these once-forgettable training sites have become more attractive to investors and stakeholders.
The Jacksonville Jaguars, Las Vegas Raiders and Los Angeles Chargers are others that have built or are planning to build new practice facilities with ancillary development in mind. Not all of them work. The Carolina Panthers attempted to anchor a new practice facility and team headquarters on a 245-acre site in Rock Hill, S.C., but those plans ended amid a pay dispute between the town and the team, which has since been resolved. The Panthers haven’t announced any subsequent ventures.
In many cases, team-related projects are getting subsidized in outlying municipalities via taxpayer dollars while franchises are capitalizing on sponsorships deals like naming rights agreements, where various brands like healthcare companies often help pay for the costs of these buildings.
“You’re seeing newfound revenue streams that didn’t exist 30 years ago,” Goldman Sachs managing director Greg Carey said in an interview. “The value creation has been tremendous. The old rule of thumb used to be at 3x revenue and now some teams are trading at 10x revenue.”
Adding More Value to Sponsorships
Vikings quarterback Kirk Cousins was featured on Netflix’s 2023 docuseries Quarterback. Among the beneficiaries of the show’s popularity were Twin Cities Orthopedics, U.S Bank and other key team sponsors, which gained worldwide exposure.
It’s just one of the examples of how mixed-use developments not only pad pockets for teams and equity partners, but also create more visibility and potentially more business for team sponsors. Companies want to be part of the NFL and around family-friendly situations. It can raise their own profile, particularly as fans post-pandemic seek outdoor spaces where people can connect with the team.
“Salaries aren’t staying the same, they’re only going up, and there’s only so much you can squeeze out of a [NFL] stadium without raising the ticket price to the point where fans complain about it,” Ron Turner, head of Gensler global sports, said in an interview. “They are all looking for more opportunities, and sponsors are, too. It all goes hand and hand.”
More than eight teams in the NFL have partnered with these team healthcare providers to build sports performance and research centers. The Atlanta Falcons, for example, built a sports medicine clinic with Emory Healthcare at their practice facility in Flowery Branch, Ga., in 2021. It is open to the public and allows local fans to get medically evaluated in the same building as the players.
Part of the lure of practice-facilities development is available undeveloped land. And teams don’t have to finance it all themselves. Some are partnering with existing developers and municipalities around the sites to create revenue and sponsorship opportunities.
Capturing the Attention of Free Agents
While new revenue and sponsorships are driving this development trend, there’s another: free agency.
“You’re competing for players, that’s the thing with these practice facilities,” Turner said. “For [NFLers], it used to be about how much more money you can make. It isn’t that way anymore… They really want to know what the training facilities are like and all the things that will keep them healthy, which makes for huge competition.”
Career development and coaching staff remain top factors in picking a new landing spot, but the level of amenities a franchise can offer can tip the balance.
A handful of teams—Cincinnati, Kansas City, Arizona, Washington and Jacksonville—took a public relations hit when the NFL Players Association revealed its first club report cards, which gave 1,300 players anonymous space to grade on nutrition, training grounds, weight rooms and training staffs leaguewide. Those five teams posted ‘F’ or ‘D’ grades across multiple categories, while teams like the Green Bay Packers, Miami Dolphins, Cowboys, Raiders and the Vikings ranked among the best.
A mixed-use destination adjacent to a team practice facility, especially one with residential apartments or a hotel, can provide a place where both current and prospective players and their families can enjoy themselves. During training camp, some Vikings players even stayed at nearby Omni Viking Lakes Hotel.
“It’s a competitive league,” Wilf said. “The [NFL] draft equalizes a lot, and coaching is critical, but facilities, as people walk through them, are hugely important on a free-agent visit… It certainly doesn’t hurt and is part of the motivation.”
(This story has corrected the name of the Woodland Hills neighborhood in Los Angeles where the Rams are proposing an entertainment district. A previous version listed it as Woodlawn Hills. It has also been updated to correct the name of Twin Cities Orthopedics)
State of NFL Stadiums—A Sportico Series
Part 1: State of NFL Stadiums: Smaller, Pricier, Busier Venues on the Way
Part 2: The New Stadium Paradox: Soaring Costs Sink Small Projects’ Appeal
Best of Sportico.com
