The long awaited disclosure of terms for the public-private partnership investment into a new stadium for the Buffalo Bills brought a collective sigh of relief to fans across Western New York this morning. After NFL owners voted unanimously to approve a $200 million loan to the Bills as part of a funding package of $1.4 billion, Erie County Executive Mark Poloncarz and New York State Governor Kathy Hochul announced the terms of the public sector financing: $250 million from the County and $600 million from New York State. The Bills will be responsible for the remainder, including any cost overruns. The new facility, which will be built on property adjacent to the existing Highmark Stadium, will be owned by Erie County Stadium Corporation, (“ECSC”) a state entity. ECSC will then lease the facility to the Bills.
NONRELOCATION AGREEMENT KEY
As noted by Governor Hochul, an “iron-clad” nonrelocation agreement was essential to public sector funding. Consequently, it has been reported that the terms require the Bills to repay the entire amount of the public funding if the team leaves Western New York within the first 15 years of the lease, with declining amounts over the remaining 15 years of the term. This $850 million relocation penalty dwarfs the $400,000 penalty in the previous Bills lease, and essentially tethers the team to its home – and its beloved fan base – for the foreseeable future.
WHAT IS THE BIG DEAL ABOUT THIS DEAL?
The announcement today about the agreement in principle finally puts to rest the decades of distress Bills fans have endured anticipating a potential relocation of the franchise from one of the smallest markets in the NFL. Bills fans watched as teams in larger markets such as St. Louis, San Diego and Oakland squabbled with and ultimately left for richer venues. While the Pegulas have always stated their intention to keep the Bills in Buffalo, there was no denying the nuclear option that was always available to them. And, while $850 million is certainly not a small amount of money, it is very important to recognize that a) the Bills are responsible for any cost overruns- a huge deal given the astronomical escalation of overruns for SoFi Stadium, for example; and b) as County Executive Poloncarz noted, the County is “getting out of the football business”. ECSC, a state entity, will own the facility, not the County. Moreover, the County will no longer be contributing to game day and operating expenses. Finally, as noted by the County Executive, approximately $27 million of income, sales and use taxes generated by the Bills on an annual basis will continue to flow through Western New York, and can be reasonably expected to increase over time – especially as the NFL’s salary cap continues to grow.
HOW DOES THIS STACK UP TO OTHER DEALS?
This looks like a pretty fair agreement. A Buffalo News analysis documents many public-private “partnerships” in which the public sector was responsible for as much as 90% of the funding. The public sector parties will contribute approximately 61% of the cost. While 61% of a large number is still not insignificant, it is important to recognize that smaller market NFL teams typically receive more public sector support than larger market teams.
The New York State Legislature has to approve the deal, which will be incorporated into the budget proposal, which is due April 1st. After that, the Erie County Legislature will have 30 days to consider and vote upon the project.
Oh, and one more thing: don’t forget that Super Bowl parade February 12-19, 2023! GO BILLS!!!!!
Helen A. “Nellie” Drew is an expert in sports law, including professional and amateur sports issues ranging from NCAA compliance and Title IX matters to facility construction, discipline of professional athletes, collective bargaining and franchise issues. Drew formerly served as an officer and in-house counsel to the Buffalo Sabres of the National Hockey League, after previously working as outside counsel to the Sabres and the NHL. Among her more interesting experiences were assisting former USSR superstar Alexander Mogilny in obtaining asylum status in the U.S. and working on multiple NHL expansions, including San Jose, Ottawa, Florida and Tampa Bay.
Drew teaches a variety of courses that incorporate topics such as drug testing in professional sports and professional player contract negotiation and arbitration. She is especially interested in the evolving research and litigation concerning concussions in both amateur and professional sports.