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The Stadium Crisis on the NFL's Horizon

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San Diego and Oakland losing teams because of stadium issues is no surprise. St. Louis, on the other hand, hasn't even had their facility for 20 years. What does this mean for the NFL moving forward?

The NFL is going to have a lot of problems moving forward. The issue regarding concussions and CTE is probably the highest profile, long-term problem the NFL currently faces.

However, I want to talk about the NFL's return to Los Angeles, and what it portends for the long-term future of every NFL market outside of New York, Los Angeles, and Chicago. John Gennaro and I discussed this issue at length in this edition of the Mighty 1090 Squadcast.

The Incredible Escalating Costs of NFL Stadiums

Here's a list of all current (built or under construction) NFL stadiums, current tenants, (2015 inflation-adjusted) cost, and year built, and has the facility been significantly updated (i.e. major structural modifications).

(Dollars in Millions. Total adjusted for 2015 dollars)
Constructed Renovated
Location Stadium Team(s) Year Cost Year Cost Total
Chicago Soldier Field Bears 1924 $13 2003 $632 $815
Green Bay Lambeau Field Packers 1957 $0.96 2003,12,15 $665 $666
Oakland O.co Coliseum Raiders 1966 $26 1996 $200 $387
San Diego Qualcomm Stadium Chargers 1967 $27 1997 $78 $270
Kansas City Arrowhead Stadium Chiefs 1972 $43 2010 $375 $620
Buffalo Ralph Wilson Stadium Bills 1973 $22 2014 $130 $248
New Orleans Mercedes-Benz Superdome Saints 1975 $134 2006 $185 $774
Miami Sun Life Stadium Dolphins 1987 $115 2016 $350 $591
Atlanta Georgia Dome Falcons 1992 $214 $362
Jacksonville EverBank Field Jaguars 1995 $188 2014 $63 $251
St. Louis Edward Jones Dome Rams 1995 $280 $435
Charlotte Bank of America Stadium Panthers 1996 $248 $374
Washington, DC FedEx Field Redskins 1997 $250 $369
Baltimore M&T Bank Stadium Ravens 1998 $220 $319
Tampa Raymond James Stadium Buccaneers 1998 $169 $245
Nashville Nissan Stadium Titans 1999 $290 $412
Cleveland First Energy Stadium Browns 1999 $283 $402
Cincinnati Paul Brown Stadium Bengals 2000 $455 $625
Denver Sports Authority Field Broncos 2001 $401 $535
Pittsburgh Heinz Field Steelers 2001 $281 $376
Houston NRG Stadium Texans 2002 $352 $465
New England Gillette Stadium Patriots 2002 $325 $428
Seattle CenturyLink Field Seahawks 2002 $430 $566
Detroit Ford Field Lions 2002 $430 $566
Philadelphia Lincoln Financial Field Eagles 2003 $512 $659
Phoenix University of Phoenix Stadium Cardinals 2006 $455 $534
Indianapolis Lucas Oil Stadium Colts 2008 $720 $791
Dallas AT&T Stadium Cowboys 2009 $1,300 $1,430
New York MetLife Stadium Giants, Jets 2010 $1,600 $1,740
San Francisco Levi’s Stadium 49ers 2014 $1,300 N/A
Minnesota U.S. Bank Stadium Vikings 2016 $1,078 N/A
Atlanta Mercedes-Benz Stadium Falcons 2017 $1,400 N/A

Author's Note: All numbers are approximate, and do not include maintenance costs or rent credits. This is intended to provide a general idea of stadium costs.

As you can see, Oakland and San Diego represent the oldest stadiums in the NFL which have not undergone significant (i.e. virtually brand new) renovations. In fact only 7 stadiums exist in the NFL which were constructed prior to the completion of (then) Joe Robbie Stadium by the Miami Dolphins in 1987. For what it's worth, Joe Robbie was the first privately financed stadium in the NFL.

Beyond that, we can also see the shelf life for an NFL stadium is approximately 20-30 years. This is based on the following current or upcoming stadium situations for teams which have either begun the process of getting new stadiums, or are performing major renovations on their existing stadiums.

Here's where things get interesting for other cities / regions which host NFL franchises. 15 stadiums will enter the 20 year range within the next 10 years, and have not received significant modifications. Of those, 8 of them will reach 25 years of service by that time. Those cities include:

  • 20 years by 2020: St. Louis, Charlotte, Washington, D.C., Baltimore, Tampa, Nashville, Cleveland, Cincinnati.
  • 20 years by 2025: Denver, Pittsburgh, Houston, New England, Seattle, Detroit, Philadelphia.

What's the Fight over Los Angeles All About?

Put simply, this is the Old Guard (OGs) against the New Guard (NGs). In this particular case, it's Chargers owner Dean Spanos and Raiders owner Mark Davis versus Rams owner Stan Kroenke. However, I think they are proxies in what may become a larger fight for who controls the future of the NFL.

On one side, you have football teams which have been owned by the same family for more than 1 generation.

On the other side, you have the list of owners who bought into the NFL within the last 30 years, and are successful outside of football.

Old Guard (Multiple Generations) New Guard
Team Family (Current CEO) Team Family (Current CEO)
Arizona Cardinals Michael Bidwill Atlanta Falcons Arthur Blank
Chicago Bears Virginia McCaskey Baltimore Ravens Steve Bisciotti
Cincinnati Bengals Mike Brown Buffalo Bills Terry Pegula
Denver Broncos Pat Bowlen (Family Trust) Carolina Panthers Jerry Richardson
Detroit Lions Martha Ford Cleveland Browns Jimmy Haslam
Green Bay Packers Green Bay Packers, Inc. Dallas Cowboys Jerry Jones
Indianapolis Colts Jim Irsay Houston Texans Bob McNair
Kansas City Chiefs Clark Hunt Jacksonville Jaguars Shahid Khan
New York Giants John Mara & Steve Tisch Miami Dolphins Stephen Ross
Oakland Raiders Mark Davis Minnesota Vikings Zygi Wilf
Pittsburgh Steelers Dan Rooney New England Patriots Robert Kraft
San Diego Chargers Dean Spanos New Orleans Saints Tom Benson
San Francisco 49ers Jed York New York Jets Woody Johnson
Tampa Bay Buccaneers Glazer Family Philadelphia Eagles Jeff Lurie
Tennessee Titans Adams Family St. Louis Rams Stan Kroenke
Seattle Seahawks Paul Allen
Washington Reskins Dan Snyder

Generally speaking (with some notable exceptions - namely Carolina Panthers Owner Jerry Richardson), list one matches up pretty well with the owners believed to back Dean Spanos. List two matches up well with those suspected of backing Stan Kroenke.

As we have heard many times during this LA stadium saga, one of the priorities of NFL Ownership is to ensure Dean Spanos "is taken care of." This means Spanos is going to come out of this situation with either a landing spot in Los Angeles, or in a financial position to get what he wants if he comes back to San Diego.

However, there's one other important factor which I think is highly relevant in the OGs support of Spanos, and that factor is, of course, money.

This group of owners is generally less wealthy than those on the New Guard side of ownership, and therefore are very sensitive to taking care of their fellow OGs because as time goes by, their numbers, money, and power, will diminish.

Furthermore, many of them will likely be in need of significant league support when the time comes for them to lobby for new stadiums in another 10-15 years. Most of these owners required significant public subsides to get their stadiums 10-15 years ago, and while they have been enriched, that value comes from the value of the team, not their outside business interests.

If they needed subsides at a time when stadiums cost an average of $452 million in 2015 dollars, then what will they need when the cost reaches upwards of $2 billion in the next 10 years?

What Does This Mean for the NFL Going Forward?

Let's suppose the Chargers and Rams are the teams selected to relocate to Los Angeles, vacating San Diego and St. Louis. The NFL would be trading the #2 media market for the #21 market (St. Louis) and #28 market (San Diego).

This would leave the Orlando - Daytona Beach - Melbourne area of Central Florida as the highest television market not occupied by an NFL franchise (#19 overall). However, putting an NFL team here wouldn't be practical, as this market is surrounded by Tampa (#12), Miami (#14), and Jacksonville (#47).

Central California (Sacramento, Stockton, Modesto) ranks ahead of St. Louis, while Portland (#25) and Raleigh-Durham (#26) rank ahead of San Diego.

This is the NFL's Stadium Crisis: Los Angeles is the last low-hanging stadium fruit left for the NFL in the United States. Once Los Angeles is taken, where does the NFL go next?

  • None of the remaining top-30 markets are more appealing from a market size or corporate standpoint than any other.
  • San Diego becomes the largest metropolitan area available (#17), not including northern Mexico.
  • St. Louis has a stronger corporate base, but a slower rate of growth.
  • In North America, the 2 locations which could conceivably support an NFL franchise as well as find stadium funding would most likely be Toronto, Canada and Mexico City, Mexico.
  • This is where London becomes very appealing.

So, let's add this all up.

  • Stadium costs are skyrocketing.
  • About half of all NFL stadiums are likely to need replacement or significant modifications within the next 10-20 years.
  • About half of the current NFL owners cannot afford to build their own stadiums because they inherited their franchise and didn't build wealth independently.
  • After Los Angeles, there are only 2 open markets left in North America which absolutely could afford (or help afford) to build stadiums at the current size, amenities, and cost required.

While some of these owners will settle for renovations to their existing structures, several others will do what they've done previously, and demand taxpayer subsides which are not available, both in terms of open markets or in terms of the amount of public money needed to make a deal work.

So, what happens when seven or eight owners get into a competition for Toronto, Mexico City or London? While a few will succeed, what happens to the losers? You think the drama over Los Angeles this year was bad? Just you wait as the large markets dwindle and the number of competitive and desperate owners increase.

This is the hidden reason the OGs are fully in support of Dean Spanos. Their fear is that the NFL decides to sacrifice the elders by forcing the OGs outside "megamarkets" (h/t to Carmen Policy) to sell majority control of their franchises to multibillionaires who can fully or mostly finance their own stadiums for the good of the NFL. Before you think that owners of professional sports teams can't be forced to sell, just remember three names: Frank McCourtJeff Moorad, and Donald Sterling.

It seems obvious, especially with a dwindling American upper-middle and middle class, the answer will be a reduction of stadium size while maintaining premium features or elimination of premium features in stadiums outside of large corporate markets. In this regard, Raiders' Owner Mark Davis may have more vision than any of his contemporary owners, in asking for a smaller stadium with fewer amenities (for the current bargain price of $900 million).

Now, let's couple this with the concussion issue. As with the stadium issue, you're just seeing the beginning of this wave. The real damage to the NFL won't come for 15-20 years, when you start seeing the reduced numbers of young athletes playing football in high school and college because their parents (i.e. people whose kids are currently 6 years or younger) didn't allow them to play.

I suspect that the stadium crisis and concussion crisis will hit at about the same time. As a result, you might see a major realignment and/or contraction with multiple teams clustered in the largest markets, where stadiums can be privately financed and shared, and the athletes aren't spread too thin. For example, you could see 4 teams in Los Angeles and New York, 2 each in the Bay Area and Chicago, and single teams scattered around the NFL in regional markets with large populations and corporate bases (such as Dallas, Minneapolis, Toronto, and Atlanta).

Or... maybe the NFL collapses under the weight of its own greed.

Final Thoughts

I could be all wrong about this. The NFL might just be a perpetual economic engine, impervious to the twin dangers of player safety and escalating stadium costs.

Going forward, due to the astronomically increasing costs of building stadiums, and the NFL's desire to replace them every 20-30 years, the NFL will find itself in a situation where half of its owners and the majority of its US markets simply will not be able to afford the league' stadium demands.

Once this scarcity hits, the NFL will be faced with the dreaded tag of sustainability, which may include contraction, realignment to major markets, and forced ownership changes. All of this assumes the NFL can also survive the coming challenge of CTE, and what it means for talent coming to the league 20 years from now.

If I'm right, what we're seeing in the race for Los Angeles is the absolute high-water mark of the NFL, economically speaking. We may also be getting a preview of market/relocation battles to come.

The question is not when the dam breaks. The question is what breaks it, and how low will the water go?