Friday Dump 🥟 - NFL stadium subsidy, Big East media deal, Europe's Big 5 ascension

Author

Michael Sheinfeld
June 28, 2024

Hear ye! Hear ye! Friday Dump 🥟 is now in session

Each Friday, we’ll breakdown 3 sports business stories that have caught our eye throughout the week. They will be assembled in the following format:

🔴 - Stories that make us stop, think, and question.

🟡 - Stories with a hint of risk and unpredictability.

🟢 - Stories that make us feel good to go and empowered.

Guilty as charged for loving this newsletter.

Pictured: Bryce Young (left) and Carolina Panthers owner David Tepper

🔴 NFL owners begging for taxpayer dollars. Wouldn’t it be nice as a sports fan to have your billionaire owner request renovations to your current stadium and all you had to do was smile and wait for the press conference where that owner writes out a check? Yeah, we’re pretty sure that’s what one side of heaven looks like. Unfortunately, we just woke up from that dream and are back to reality. The reality is there’s a bit of an epidemic spreading around NFL teams as owners are in this constant state of “Keeping up with the Jones’”. Charlotte, Jacksonville, Kansas City, Cleveland, and Chicago are all dealing with owners who want newer, shinier toys but also kinda, sorta need some help from the taxpayers 😬. Let’s review…

  • This week’s “Quick Hitter”, we talked about the Carolina Panthers securing $650M in public funds to renovate their home at Bank of America Stadium.

  • In Jacksonville, their taxpayers are set to contribute upwards of $775M toward the Jaguars’ $1.4B renovation of EverBank Stadium.

  • A couple months back we talked about the Kansas City stadium issues and how Jackson County, MO voters rejected a $2B proposal to help fund renovations at Arrowhead Stadium and a new Royals ballpark.

    • But last week, the state of Kansas knocked down the door with force as officials passed a law that would help cover 70% of the ~$3.5B cost of new stadiums if the Chiefs and Royals moved from Missouri 😳 (can you say awkward border wars?)

  • In Cleveland, lawmakers are considering $600M in state funding for a new stadium for the Browns as renovating their current stadium could cost as much as $1B, while building a new venue in the suburbs may take $2.4B.

  • Let’s not forget about Chicago…as they recently unveiled a $4.7B project for a new, domed stadium on the city’s lakefront.

    • The Illinois state legislature still needs to approve this as the Halas-McCaskey family (Bears owners) are asking for $2.4B from taxpayers.

In a dumpshell…it’s pretty incredible the number of teams that are currently going through this process with their local governments. What’s even more incredible…taxpayers have spent ~$30B on stadiums the last 34 years 🫢. It’s pretty shocking, especially given the narratives from owners that surrounds renovating and building new stadiums. We’ve all heard it, “this project will lead to job growth and further investment within the community!” There’s been plenty of debate when it comes to this topic, economists have even gone so far to say that stadium subsidies don’t provide a net economic benefit for their surrounding metros.

We’ve even seen this as a 2021 New York analysis of the state’s $850M stadium subsidy for the Buffalo Bills said the largest revenue source from the deal would come from income taxes paid by the team’s players. In simple terms, these projects haven’t seen much of an ROI for taxpayers.

But the problems don’t just lie with the owners, local governments don’t want to end these stadium subsidies for fear an owner packs up the team in a Uhaul and leaves their city for greener pastures…which is why this Kansas City case study is about to get spicy.

Pictured: UConn head coach Dan Hurley; Photo: Getty Images

🟡 Big East gets the bag. The Big East has been counting their blessings ever since Dan Hurley decided to stay with UConn and not take the Los Angeles Lakers job. And for good reason, because on Thursday the Big East announced it has signed a new 6-year media-rights package with Fox Sports, TNT Sports, and NBC beginning in 2025–26. Financials were not disclosed, but the deal comes at a necessary time as the current deal, a 12-year package with Fox Sports and CBS for ~$500M, expires at the end of 2024–25. According to a source connected to Front Office Sports, the league could see an increase of around 30% to 40% on the average annual value of the current deal. What does that look like?

  • The existing package averages about $41.7M per year, so the future deal could be worth in the $55M range annually.

    • That money would then be divided among the league’s 11 schools.

  • As apart of the deal, women’s basketball will specifically receive elevated treatment in the new deal.

  • Fox Sports will remain the primary rights-holder for the conference, owning ~80 men’s and women’s college basketball games during the regular season and postseason — while also retaining the rights to the Big East men’s tournament final.

  • NBC will air more than 60 men’s and women’s games, with Peacock being included as a major part of the broadcast.

  • TNT will air more than 50 men’s regular-season basketball games and at least 15 women’s regular-season games. All games will be shown on Max as well as affiliates truTV and TBS.

In a dumpshell…if the financial rumors are true, this deal could be worth upwards of $350M for 6 years. Quite a deal for a conference that doesn’t house a Division 1 football team! Couple things to note:

1) With the continuous nature of conference realignment, the Big East wanted to focus more on the basketball schools. Which makes sense as that’s what they’ve been historically known for. But it’s always a risk to roll that dice as football is king and drives massive amounts of revenue to school’s athletic departments.

2) It’s interesting to see what TNT is doing as we slowly wait to hear if they will be involved with the new NBA rights media deal. At this point though, they’re kind of showing us the cards in their hand — by going all in on college sports. It’s a network that already broadcasts men’s March Madness, they recently secured rights to some of the 12-team College Football Playoff, and now they’re welcoming the Big East to their Discovery Channel slate 🥳.

Enjoying this really awesome newsletter? Share with your friends & family!

Pictured: Manchester City winning 2022-23 Champions League Final

🟢 Salute to European soccer. It’s hard to imagine we’re still collecting and analyzing data after the awful COVID-19 pandemic, but that’s why we have firms like Deloitte to do our jobs for us! The consulting firm released their 2024 Annual Review of Football Finance report that covers all finances from the 2022-23 season with details and outlooks of the industry. This just so happened to be the first season since 2018-19 where Europe’s top leagues operated under no pandemic restrictions. So let’s review some of the findings.

  • The overall market grew to ~$37.8B (16%). The “Big Five” (shown below) generated a record ~$20.9B (56% of the total market).

    • The “Big Five” total was up $2.5B (14%) over the previous season.

  • Here’s how the leagues compared against one another:

    • Premier League (U.K.): $7.4B

    • Bundesliga (Germany): $4.1B

    • La Liga (Spain): $3.8B

    • Serie A (Italy): $3.0B

    • Ligue 1 (France): $2.5B

  • The Premier League's new international broadcast cycle contributed to an 11% increase in the average revenue of English top-flight clubs (see Table 1), surpassing over $379.5M.

  • As this was the first year with no restrictions, this meant a full return of fans to stadiums. Specifically in Germany and Italy, where Bundesliga and Serie A clubs recorded the largest total percentage growth over the previous season (22% each).

Table 1

In a dumpshell…we had an idea this would create a boomerang effect, but to see how well European soccer has thrived since the start of the pandemic, it’s easy to see why soccer is so important across the world.

And despite this record growth, European soccer leaders are still exploring more ways to bring in additional revenue.

1) LaLiga and the Premier League are interested in obtaining permission from their respective local authorities to play regular-season matches in the U.S.

2) And on the media side, last year Serie A completed new media-rights deals worth ~$4.8B with DAZN and Sky. Ligue 1 is also in discussions to broaden their US viewing and investment as they search for their next broadcasting contract.

Reply

or to participate.