Podcast: Play in new window | Download
Subscribe: RSS
In case you missed it, the owner of the NFL’s Buffalo Bills wants a brand new stadium built for his professional football team in western New York State. Oh, boy – here we go again!
Buffalo Bills owner Terry Pegula and his wife, Kim, also control the city’s Buffalo Sabres of the National Hockey League. A Penn State grad, Pegula made his fortune as in the oil and gas business by starting his own company called East Resources. Getting in on the early phases of the Marcellus shale boom, he would eventually flip a large part of his production company to Shell Oil for a cool $4.7 billion and his West Virginia and Ohio properties to American Energy Partners for another $1.75 billion.
When the family of Buffalo Bills original founder, Ralph Wilson, put the team up for sale, Terry Pegula won the bid in 2014 over another offer made by some guy named Donald Trump and his partner, Jon Bon Jovi. Yes, that’s right!
In October, 2014, Buffalo Bills fans rejoiced after Terry Pegula (a man with many local ties to the Buffalo area) bought the NFL football team for $1.4 billion in cash.
“Ba-da-boom, ba-da-bing. It’s good to be the local sports king!”
The Buffalo Bills were founded as one of the initial franchises in the old American Football League back in 1960 and merged into the NFL in 1970. The team operates in one of the smallest media markets in the National Football League with a metropolitan area of just 1.1 million people (good for #49 in the United States). It is a slightly smaller market than the NFC’s New Orleans Saints (1.2 million), but they only lead the Green Bay Packers (where 600,000 live in their metropolitan statistical area).
Green Bay (unlike Buffalo) is the only community-owned franchise in major professional sports. The Buffalo Bills (like most NFL franchises) is controlled by a single family entity who can decide whether the franchise stays or goes.
Like right now, for example.
Despite the relatively small size of the city along Lake Erie (in comparison to other NFL markets), the attendance for Buffalo Bills games is nearly always among the highest in the National Football League.
Built in 1973, Rich Stadium (named for a Buffalo-area food products company) in suburban Orchard Park initially had a seating capacity of 80,000 when it opened. After a few changes have been made to modify the stadium (primarily to add more luxury boxes for the high-roller fans), the current seating capacity of this facility has shrunk to about 71,000.
While on vacation years ago, my family and I drove by the stadium on our way to see nearby Niagara Falls. Since the football field and the seating are built below ground level, the only thing you will see from the outside of the stadium are the top portions of the upper deck and the light standards. The placement of the football field and stands below ground level was intended to help limit the fans’ exposure to the cold winds blowing in from Lake Erie. Since the stadium is open-air, though, the swirling winds still play havoc with punting and field goal attempts at this facility.
The stadium is now nearing 50 years of age and could use a facelift. The current Governor of New York, Andrew Cuomo, has already dedicated $130 million of the state’s budget for that purpose right now. That is a lot of money for a football stadium which is used a maximum of ten times a year by the local NFL team, isn’t it?
Unless you realize that the Buffalo Bills current team owner has recently upped the ante and now wants the government (city and/or state) to build a brand new stadium for his team at a cost of $1.5 billion.
Once hailed as a local hero, owner Terry Pegula is now turning himself into a cartoon villain like Dishonest John. The lease on the Bills’ football stadium in Buffalo expires just two years from now in 2023. Word has leaked that Pegula has received a serious offer to move his NFL team to Austin, Texas if the Buffalo area doesn’t commit to building a new football stadium for his team soon.
Boo! Hiss!
It’s not like either the Dallas Cowboys or the Houston Texans would like a third team sharing the Texas pro football pie, either. Owners of both Texas NFL teams would likely object to a possible relocation of the Buffalo franchise to central Texas.
For fans of the former Houston Oilers, this all sounds eerily familiar to what happened back in the 1990’s. The Oilers were playing in a relatively small (50,000 seat) Astrodome, and the team’s owner (nicknamed by fans as “Bottom Line” Bud Adams) threatened to move Houston’s Oilers to Jacksonville, Florida a few times. He bluffed each time, but he never stopped complaining, either. Finally, he shocked the city of Houston by accepting a more generous offer to relocate his NFL team to a larger new stadium which would be built for the team in Nashville, Tennessee. Thus, the Tennessee Titans were born in 1997.
Fortunately for Houston (now the nation’s third largest city), the NFL smartly awarded a new football franchise to the region a few years later in 2002. As you may have surmised, a bright shiny and larger football stadium was also to be built to accommodate this new NFL expansion franchise called the Houston Texans.
For what it’s worth, the Astrodome still sits empty nearby as the locals still cannot figure out whether to turn the facility into a sports museum or tear it down.
If the Buffalo Bills ever leave western New York state, it is quite unlikely that another new NFL franchise would be awarded to this city. Buffalo is simply too small of a media market to matter enough to the NFL’s ownership group.
So, what do you think Buffalo should do?
I believe that owner Terry Pegula is bluffing right now. He stands to benefit from additional revenues generated by more executive suites, higher ticket prices, higher-priced stadium concessions, parking, and the like.
If the city of Buffalo and state of New York are dumb enough to offer to pay 100% of the cost of building a shiny new $1.5 billion stadium without the owner having to spend a dime, wouldn’t you start the negotiations from that position first? Of course, you would!
Then, you ratchet-up the pressure by having the media leak a story discussing the possibility of your beloved Buffalo Bills relocation.
“Oh, no! Not to Texas!” Those football-crazy Texas people might be willing to burn a lot of money to lure a team into the fast-growing Austin (#11) and San Antonio (#24) markets. They tried (but failed) to get the Oakland Raiders to relocate to Texas just a few years ago.
By the way, what ever happened to the Oakland Raiders? They are now in Las Vegas. Has anyone heard a word about the NFL replacing the team in Oakland? This will be Buffalo’s fate, too.
So, how badly do the fans and local governments in western New York state want to keep the NFL Bills in Buffalo?
Nearly every economic model will tell you that spending $1.5 billion in taxpayer money to build a new football stadium will never pay out. Hey, that’s why the owner hasn’t offered any of his money to do it, right? He only paid $1.4 billion for the team itself!
I have a better idea, Buffalo. Why don’t you offer to buy the team from the current owner and do what the Green Bay Packers did years ago. Make it into a community-owned franchise so no one will ever be able to threaten to move the team again!
Let’s say the owner would accept $2 billion for his initial investment of $1.4 billion back in 2014. Here’s how the good people of Buffalo and Bills fans from around the country could get this done:
100,000 owners = $20,000 per share
200,000 owners = $10,000 per share
400,000 owners = $5,000 per share
1,000,000 owners = $2,000 per share
Imagine the conversations at homes across western New York to discuss it. “Hey, honey – I’m going to take $20,000 out of our retirement funds so we can own a 1/100,000th interest in the Buffalo Bills and keep them in Buffalo! Whaddya think, dear?”
The loyal supporters of the Buffalo Bills in western New York deserve a better fate than what happened in the past few years to the equally loyal devotees of the Oakland Raiders.
New Orleans Saints and Jacksonville Jaguars supporters should also pay rapt attention to this story which is unfolding in Buffalo.
You could be next!