By New York Post (U.S.) | Created at 2024-12-16 21:17:33 | Updated at 2024-12-16 23:42:02
2 hours ago
Gov. Kathy Hochul’s decision to fork over taxpayer money to build a new stadium for the Buffalo Bills drew renewed scorn – after the NFL team’s billionaire owners sold a minority stake for a massive profit, The Post has learned.
Hochul, a Buffalo native, had agreed in 2022 to provide $600 million in state funding – with Erie Country tossing in an additional $250 million – for the privately-owned stadium after Bills owner Terry Pegula threatened to leave Western New York.
The new 62,000-seat Highmark Stadium, expected to open in 2026, played a significant role in inflating the value of the Bills by more than $2 billion – yet the state will not get any significant return on its investment, critics of the so-called Buffalo boondoggle claimed.
“The investment proves what everyone knew: the deal was great … if you are the Bills’ owner but not so for the people of Buffalo or the state,” an adviser to former Gov. Andrew Cuomo, familiar with the Bills stadium deliberations, told The Post.
Dr. Mark Rosentraub, director of the Center for Sports Venues at the University of Michigan, noted that there will be no direct benefit to Buffalo residents since the new stadium is being built next to the antiquated one in the suburb of Orchard Park.
“This was an egregious deal. There is no other way around it,” Rosentraub said.
“Had this facility been built in Downtown Buffalo it might have stimulated the economy. But they are just replicating what they had in the same place.”
The Post reached out Gov. Hochul’s office for comment.
Pegula, who paid $1.4 billion for the Bills in 2014, had threatened to move the team to Austin, Texas, without public funding.
But legally the Bills could not relocate if the government made a good faith effort to keep the team, Rosentraub said.
That could have included lending him the money to build a stadium — which is expected to cost $2.1 billion — instead of giving the deep-pocketed Pegula a handout.
There was no public funding for the last two NFL stadiums built: SoFi Stadium in Los Angeles and Allegiant Stadium in Las Vegas, which both opened in 2020.
“Pegula negotiated the best deal for his business. The fault lies with the public sector, not the private sector,” Rosentraub said.
The Bills were worth $3.4 billion when Hochul agreed to the deal, according to Forbes.
Since then, the value of NFL teams has exploded. The average franchise is now worth $6.49 billion, and no team is valued at less than $5.25 billion, according to CNBC’s Official 2024 NFL Team Valuations.
In August, the league for the first time allowed private equity to buy up to a 10% stake in NFL teams.
Pegula took full advantage. Earlier this month, the fracking mogul sold a 10% stake to Arctos Partners – and another 10% to 10 limited partners led by NBA Hall of Famer Vince Carter – at a $5.8 billion valuation.
The Bills, who lead the AFC East this season and are one of the favorites to win what would be their first Super Bowl title, are expected to get a boost in revenue from the new stadium from personal seat licenses, suite sales and sponsorships.
“Having a new stadium is a nice thing,” one banker told The Post. “It makes it a much more attractive investment.”
“Did it add 10% to the value? Yes, and that’s our tax money at work,” the banker said.
A second banker added: “I think the new stadium is not insignificant when valuing the team.”
Hochul had previously drawn criticism for the alleged sweetheart deal. Her husband, William Hochul, is a former top administrator with the Buffalo Bills’ concessionaire, Delaware North.
She defended the decision during a press conference in March 2022.
“I went into these negotiations trying to answer three questions – how long can we keep the Bills in Buffalo, how can we make sure this project benefits the hardworking men and women of Western New York and how can we get the best deal for taxpayers?” she said.
“I’m pleased that after months of negotiations, we’ve come out with the best answers possible – the Bills will stay in Buffalo for another 30 years, the project will create 10,000 union jobs and New Yorkers can rest assured that their investment will be recouped by the economic activity the team generates.”
