Prevent Defense: New York Lawmakers Should Block Hochul’s Stadium Proposal | Citizens Against Government Waste

Prevent Defense: New York Lawmakers Should Block Hochul’s Stadium Proposal

The WasteWatcher

On Monday, March 28, 2022, New York Governor Kathy Hochul (D) announced that the state has reached a deal with the owners of the National Football League’s (NFL) Buffalo Bills franchise to force the state’s taxpayers to cover $850 million, or 60 percent, of the franchise’s new $1.4 billion stadium. 

Under the agreement among the Bills, the state of New York, and Erie County, team owners Terry and Kim Pegula will pay the remaining $600 million, with additional funding from the NFL.  If approved by the legislature, the amount would be the largest public contribution to a professional football stadium ever as well as a prime example of corporate welfare.

Gov. Hochul’s call for lawmakers to approve the funding for her hometown stadium comes after she declined to include it in her executive budget, which was released on January 18, 2022.  At the time, the governor’s office cited ongoing negotiations as the reason for its exclusion.  In one of his few successful efforts to prevent wasteful spending in New York, Gov. Hochul’s predecessor, former Gov. Andrew Cuomo (D) refused to give in to the franchise’s demands that the state provide a significant amount of funding for the project.

The effort to have the state fund the stadium comes despite the Pegulas’ net worth of an estimated $5.1 billion, along with a team valuation of $2.27 billion.  The reported deal stems from a 2021 threat by the Pegulas to move the team from its home of 62 years, during which the team has lost four Super Bowls, tying them with the Minnesota Vikings for the most losses without a win.

The reported agreement to build the stadium comes as several other NFL franchises have constructed new stadiums in recent years with either no cost or far less cost to taxpayers.  The Los Angeles Rams and Chargers moved into the privately built $5 billion SoFi Stadium in 2020.  The last stadium to receive public funding, Las Vegas’s Allegiant Stadium, cost $1.9 billion, of which taxpayers paid $750 million, or 39 percent.

The Pegulas’ reluctance to fund the stadium project themselves or put up more than 30 percent should give lawmakers pause. When pressed on why the team needed extensive public support, Terry Pegula replied that the Buffalo market was too small to justify a private investment of  $1 billion in a stadium.  But it apparently is justifiable to force taxpayers across the state, more than three quarters of whom likely root for the Giants or Jets and will never set foot in the new stadium, to foot the majority of the project’s cost.

Taxpayer-funded stadiums have a long history of becoming financial boondoggles.  At an estimated $1.4 billion, the proposed Buffalo stadium would likely be worse than most.  To generate meaningful tax revenue, stadiums must attract other events beyond NFL games.  In a typical 18-week season, a single NFL team can expect to host seven or eight home games, along with an occasional playoff game or two. The Bills have been in seven playoff games, including three home games, since 2017, but before then had not made the playoffs since 1999.  Given the Pegulas’ preference for an open-air football-only venue, the stadium will remain largely unused for a majority of the year, particularly in light of Buffalo’s notoriously harsh winters.

Profitability or something close thereto is more likely to occur in stadiums that are capable of hosting major events beyond NFL games.  For example, other NFL stadiums have played host to the College Football Playoff, the NCAA Final Four, soccer matches, and concerts, among other events.  The owners’ plans for the Bills’ new stadium foreclose these possibilities.  Even with the wide array of events like those hosted at other stadiums, the revenues generated fail to justify the large investment of taxpayer funding.  Without these extra revenue sources, the proposed stadium is primed to be an even greater boondoggle than similar investments.

Lawmakers in Albany should think twice before appropriating any taxpayer money to the stadium in a deal akin to a kick that sails wide of the goalposts.  Instead of shifting the burden to taxpayers, the Bills should collaborate with the NFL to fund and construct a new stadium at their own cost.  Any significant investment by the state of New York and Erie County would not only serve as an outlier in professional stadium spending, but also leave taxpayers on the hook for a project that will never pay for itself.