Advertisement

State of NFL Stadiums: Smaller, Pricier, Busier Venues on the Way

Eric Jackson
·13 min read
1

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 first installment of the series.

The 65-inch television in a fan’s living room is the lifeblood of the NFL—and a reminder that the league has $125 billion in broadcast contracts running through 2033.

More from Sportico.com

It’s also a problem. In the post-pandemic era, that screen in front of the sofa can prove more alluring than a seat overlooking the playing field. And that reality is driving NFL team owners as the league appears poised for a stadium building boom.

“You’re competing with the home environment,” Minnesota Vikings president and co-owner Mark Wilf said in an interview. “It’s that much more important the stadium experience is first-class. When the building gets tired or past its useful life, you’re less likely to see families and people engage with it in the way you’d expect.”

Coming out of the pandemic, team owners say it’s imperative that stadiums evolve into more than just a place to watch a football game 10 days a year. Modern venues, according to owners, financiers and construction executives interviewed for this story, need to offer multiple experiences to maintain fan interest while also capturing revenue streams well beyond game-day tickets, snacks and beer—from augmented reality to gambling to concerts to adjacent entertainment and shopping districts, and even hotel, office and residential development.

The nature of modern fandom is just one of the factors influencing the next construction cycle for the NFL, in which more than a third of teams could have new stadiums either completed or renovated by the end of the decade. The league has opened two new stadiums in the past six years: the Los Angeles Rams’ and Chargers’ SoFi Stadium and the Las Vegas Raiders’ Allegiant Stadium came online in 2020. Two more teams, the Buffalo Bills and Tennessee Titans, have secured more than $2 billion dollars in public funding for new stadiums in the past year. The Baltimore Ravens snagged $600 million from the state of Maryland for a renovation of M&T Bank Stadium. And several other teams have publicly expressed a desire for a new or massively renovated home field: Jacksonville Jaguars, Kansas City Chiefs, Denver Broncos, Washington Commanders, Chicago Bears, Carolina Panthers and Cleveland Browns.

That’s not even counting the Denver Broncos’ $100 million offseason refurbishment of Empower Field at Mile High, the New England Patriots’ $225 million in improvements to Gillette Stadium, or the $350 million the Dallas Cowboys allocated to upgrade AT&T Stadium ahead of the 2026 soccer World Cup.

The NFL’s stadium boom is a response not just to changes in consumer behavior, but also rising debt limits as well as more readily available local government funding. It’s also owed in part to team owners just plain wanting new stadiums and the revenues that come with them.

“I think it’s the combination of seeing what a new building can do from a revenue perspective, and the fact that you have a lot of buildings aging out,” Steve Collins, president of global development and special projects at Oak View Group, said in an interview. “Plus, a lot of people put projects on hold through COVID, and that got extended because of inflation and price impacts. We deal with a lot of the same designers (as big sports projects), and you’re going to see a boon there.”

Mixed-use development is central to these projects following the lead of the Patriots and the Los Angeles teams at SoFi. Inspiration is also coming from outside the NFL.

The Truist Truism

The gold standard for such projects isn’t an NFL team. It’s the Atlanta Braves’ Truist Park, which is surrounded by a 60-acre district that includes apartments, shops, venues, bars, restaurants and corporate workspaces. The suburban community generated $53 million in revenue alone last year for the MLB club and its parent company, Liberty Media, while also providing value to existing team sponsors.

“The habits of fans have informed us,” Braves CEO Derek Schiller said in an interview. “They want their experience associated with gameday to start well before they enter the gates of their sports venue.”

Inspired by other MLB team-related developments in Chicago, Boston and St. Louis, the Braves added their own twist with a year-round destination that commissioner Rob Manfred hailed as a “model” for other organizations. Schiller says that more than 200 pro teams, colleges and municipalities worldwide have inquired about how to strike the right public partnership or how to create a dynamic social experience.

At least a dozen of those are NFL teams.

“Sport doesn’t necessarily really matter,” Schiller said. “The concept of creating a unique place that’s differentiated and additive to the experience of your fan base applies to any sport.”

That doesn’t mean one size fits all, though—take the differing approaches of Los Angeles and Las Vegas.

SoFi Stadium’s $5.5 billion price tag makes it the most expensive in the world. Stan Kroenke’s privately financed L.A. venue is a state-of-the-art center of burgeoning new urban entertainment and residential district—and a testament to what money can buy.

Still, some in the industry view Vega’s Allegiant Stadium as the more impressive venture, considering its lower $1.9 billion price tag, which included $750 million of public funding. The Raiders’ stadium overcame early financing hiccups and has secured marquee college and pro events, including the 2024 Super Bowl. The Raiders, like the Rams, are also among league leaders in key stadium revenue categories such as ticket sales, sponsorships and non-NFL events. While SoFi has created its own surrounding district, Allegiant had one ready-made, merely a punt, pass and kick away from the adult playground that is the Las Vegas Strip.

The next two stadium projects, Buffalo and Tennessee, are also a study in contrasts. The Bills asked New York taxpayers for another stadium in the suburbs, and that’s what they’re getting. Any nearby development is up to local politicians. (It’s possible the Bills owners, the Pegulas, felt fans don’t need an entertainment district, as the game day parking lot can fulfill all their needs.)

The Titans, meanwhile, are looking to stay downtown with their mixed use development, but they won’t be paying for it. Local officials aim to build on land around the new stadium, which will open in 2027. The Titans’ new dome will be built into a neighborhood development owned by the Metropolitan Government of Nashville and Davidson County—and not far from their current field. The full 338-acre project on the banks of the Cumberland River involves transportation, housing and mixed-use development. It’s being run by the city, but the stadium did receive some special concessions. Money from a 1% hotel occupancy tax increase, 100% of sales tax from the venue and 50% of sales tax from a 130-acre zone directly surrounding the stadium will be used to repay the bonds and to fund future maintenance or renovations.

Mixing It Up

Buffalo notwithstanding, most experts see the days of teams being mere tenants in a government-owned building as a thing of the past. Mixed-use development of some kind will likely be part of most future public-funding plans, with owners no longer satisfied with the fixed revenues of a standard lease agreement, and governments needing economic-development cover for tax subsidies to billionaire team owners.

“It’s the exact opposite now,” Goldman Sachs managing director Greg Carey, who has more than 30 years of stadium and sports project expertise, said in an interview. “The (surrounding) activity now must pay for the cost of the building. There’s just not enough growth in the revenue streams to make that happen.”

While the pandemic may have made the couch a more attractive place to watch a game, COVID restrictions created a desire for real-life interaction and social experiences—another reason for building multi-use developments near stadiums or team practice facilities. Those locations are also already familiar to fans.

More NFL owners are getting involved in development either as landlords or partners in real-estate projects. “All clients are looking for ways to activate their projects, and that means thinking about the surrounding development in a more creative way than they ever have before,” sports architect David Manica said in an interview. “So mixed-use development and activation on non-game days are becoming more important to how these projects find success both financially and from an experience standpoint.”

While some cities like Buffalo and Nashville are rewriting the rules in terms of public funding for their stadiums, other NFL owners and stakeholders are spending more out of pocket for new digs. These billionaires want year-round revenue from their investments by leveraging the value of their NFL brand in a way to attract premium tenants and sponsors.

The Browns, for example, have been in talks with city government officials about transforming property near the stadium’s Lake Erie waterfront site. Browns owners Jimmy and Dee Haslam, who also own MLS’ Columbus Crew and the NBA’s Milwaukee Bucks, are working with developer Joel Pizzuti to create a multi-use development anchored by Lower.com Field in the Ohio capital. The Bucks, which the Haslams recently purchased from Marc Lasry, have also been applauded for building a 30-acre development called “Deer District” around Fiserv Forum—a model for NBA teams.

“Sports bring people together and are good for communities,” Haslam said in an interview. “Stadiums create excitement when teams are playing, and they’re cool to hang around when there are not games. For an entity to buy a large piece of property and develop a practice facility or a stadium and [build] around it for mixed use with housing, retail, restaurants and entertainment, it just makes a lot of sense.”

Talking About Practice

NFL stadiums, which host 10 home games throughout the year, plus a relatively small number of other events, drive the least amount of economic impact among major pro sports leagues in the U.S., according to economists.

“Taylor Swift only does so many concerts,” sports economist and Southern Utah professor David Berri said in an interview. “How many acts can really fill a [NFL] stadium?”

Unlike the Braves, who can create programming around 81 home games on their property, it’s more of a challenge for NFL venues to fill more than a few weeks’ worth of calendar dates.

The Titans hope to change that, and plan to host 48 major events per year when their new stadium is built. The Bills' new stadium is being built with soccer matches in mind.

Recognizing those challenges, especially when limited to a downtown footprint, some NFL owners have turned to their team headquarters and practice facilities as revenue generators by building community-friendly destinations where they can house both corporate and residential spaces.

The Dallas Cowboys’ 91-acre campus in Frisco, called The Star, provides fans and visitors greater access to the team even though it’s more than 30 miles from AT&T Stadium. The Rams are in the process of creating their own version of The Star, with an ambitious mixed-use complex anchored by their incoming training facility and headquarters in Woodland Hills, itself about 30 miles miles from SoFi in Inglewood, Calif.

Bigger Isn’t Always Better

The Titans’ stadium project, holding 62,000 seats, is slated to be one of the smallest capacities in the NFL. Why spend more than $2 billion on a facility that size?

Stadium designers and consultants from various firms say the emphasis has switched to premium seating. NFL venues are slowly shrinking from 72,000 seats-plus to around 65,000, while increasing the variety and number of premium seat options.

The NFL has scrapped the notion that Super Bowl host candidates must seat more than 70,000 to be awarded the big game. Capacity is not a factor, according to a league spokesperson. The league today values the quality of the building, hotel availability, location for related ancillary events such as fan zones, and a media center. The league used to dangle the carrot of playing host to the Super Bowl to entice municipalities to fund new stadiums. And while new stadiums have tended to receive the big game soon after completion—see Minneapolis, Atlanta, Los Angeles and Las Vegas—NFL owners are unlikely to send a Super Bowl to an open-air stadium in Buffalo in February.

Like the Titans, the Bills plan to have around 62,000 seats at their new stadium for NFL games, a decrease of about 10,000 from their current home. But it is also expected to have one of the league’s shortest distances between fans’ seats and the playing field.

“Capacities are going down, and the level of experiences are going up,” Manica, whose firm is assisting the Titans, said in an interview. “For that trade off, you can provide a better experience for everybody there. The saying goes, ‘You want to have one less seat than you think you can sell,’ and that creates demand.”

Even as taxpayer funds are again flowing into stadiums, the days of cavernous coliseums with giant upper decks for general admission ticket holders may be over. Ironically, the “cheap seats” are also typically more expensive to build, because of the materials needed and the construction challenges that develop the further one is from the field. Building less-expensive seating thins an owner’s profit margins.

Gensler principal and sports practice leader Ron Turner believes many teams, not just in the NFL, have found that money earned from naming rights, sponsorship, advertising, and food and beverage far outweigh revenues from ticket sales, especially low-end tickets.

“It used to be about getting in as many fans as possible, but not anymore,” he said in an interview. “[Teams] all know where their revenues sit, where they’re making it, and where they’re not … Why build seats that you don’t necessarily need?”

While regular tickets will be harder to come by, premium seating options in the future are likely to expand. Teams are getting more creative with luxury suites, in some cases reducing them to mini-suites, which fit can fit eight to 10 people, down from 20 or more. More people can afford an eight-person lounge than can pony up for a 20-person suite.

The emphasis on premium seating is designed to drive more food and beverage revenue per capita, and not just in the suites. Even for general admission, new stadium concourses are designed to add more marketplaces and grab-and-go options. The rise of cashless and streamlined concessions helps drive revenue, too; teams can use the data from the phone-based purchases to offer fans even more chances to buy merchandise, food and tickets.

It also makes purchasing food and beverages smoother, giving fans one more reason to show up, and pay, in person—justifying all that money for a shiny new venue. At least in NFL owners’ minds.

“You can have a pretty good experience at home,” Turner said, “and everybody worries about that.”

State of NFL Stadiums—A Sportico Series

Part 2: The New Stadium Paradox: Soaring Costs Sink Small Projects' Appeal

Part 3: NFL Teams Find Practice Makes Perfect Sales and Sponsors Space

Part 4: NFL Stadium Financing Thrives Despite Inflation, Borrowing Costs

Part 5: NFL Premium Seating Boom Responds to Demand From Well-Heeled Fans

Best of Sportico.com