- The teams are seeking site upgrades and could invest more than $10 billion for development by 2030.
- These new and modified stadiums may be smaller than existing stadiums, but they are likely to include high-tech enhancements such as grab-and-go technology for concessionaires, as well as a variety of seating experiences.
- “We’re competing against an 80-inch television in your living room,” said John Ledecky, owner of the New York Islanders, who opened the $1 billion UBS Arena in November 2021.
The Buffalo Bills are seeking a new National Football League stadium for $1.3 billion. spending chicago beers $197 million To acquire land which could eventually be their new home.
fedex field is falling apart, and the Washington football team Lobbying for a New Stadium in Virginia, Some Major League Baseball teams, including Kansas City Royals, Oakland Athletics, And Tampa Bay RaysWant a new park.
In the National Basketball Association, the Los Angeles Clippers have already begun building their $1.2 billion field. The Philadelphia 76ers are fishing, the Dallas Mavericks may be lurking. And then there’s the National Hockey League along Phoenix Coyotes,
The teams are seeking site upgrades and may invest more than $10 billion for development by 2030. The major US sports leagues have already generated national media revenue, so now teams are looking to increase revenue in other regions. New and revamped arenas are one way they can do that.
Sports clubs can attract lucrative naming rights and sponsorship deals with new buildings. There’s also a potential real estate game, with franchises including the Atlanta Braves and Milwaukee Bucks using their new buildings as anchors for large-scale real estate projects. That helps generate even more money for the development teams.
Still, debate remains over who should fund sports projects and what will be different in the post-pandemic environment.
CNBC spoke to officials about the sports stadium and arena scenario and what is to come.
Over the past 20 years, teams maximized arena revenue by adding large corporate suites, clubs, and general admission seating. However, the ongoing COVID pandemic is changing that thinking.
Bill Mulvihill, head of US Bank Sports and Entertainment Group, assisted in the financing of the Los Angeles Rams’ Sophie Stadium, which cost $5 billion. He echoed others who predict smaller venues on the horizon for the next generation of stadiums and arenas.
Mulvihill said more clubs are planning for spectators and TV viewers. “The idea is to get some unique fan experiences, not just increase the total number of people in your building,” he said.
“I think the thing and trend when talking about arenas is small efficiencies,” said Rob Tillis of investment firm Inner Circle Sports. “Large NFL stadiums will maintain large capacity.”
To increase the value proposition of attending games, you may find that your favorite team is taking advantage of seating experiences such as the NFL’s field-level suites. Texas Rangers Add New Seating Options to Globe Life Field – Their $1.2 Billion Ballpark. It includes suites on the field and two field-level lounges along the first and third baselines.
CNBC toured the Rangers’ new park last August.
The field suites were very pleasant, and sitting in the lounge felt like watching a baseball game, while at a local sports bar with a real area of the field nearby.
“These new buildings are more focused on providing a variety of premium seating projects to meet the demands of the market,” said dan barreto, President of CAA Icon, Stadium and Arena Planning Department of the agency CAA Sports.
“We’re competing against an 80-inch television in your living room,” said John Ledecky, owner of the New York Islanders, who opened the $1 billion UBS Arena in November 2021.
“All these new arenas have to give fans a reason to get up – go to their car and come to the event. If we don’t have first-class experience, they’re going to watch the game at home,” Ledecky added.
To paint a picture of future experiences, Mulvihill pointed to the project of Madison Square Garden in Las Vegas and New York Knicks owner James Dolan. MSG SectorA $1.8 billion entertainment venue, it will feature technology that allows audiences to listen to concerts in different languages and an infrasound haptic system – a vibrating floor.
“I think some of the ideas he’s talking about, how to look at a concert in a different way, can move forward in sports,” Mulvihill said. “If that technology is slow and works, it can be transferred to other places.”
UBS Arena was built during the pandemic, causing delays. But development firm Oak View Group faced the challenge and invested $2 million in the germ-killing Hawaiian Flirt system something more teams would consider installing.
Another 2021 Oak View project is the Climate Pledge Arena in Seattle, where the NHL’s Kraken plays. Executives praised Kraken’s new home, noting that it is carbon-neutral and powered by solar and electricity.
“Nearly every sector will try to be carbon-neutral,” said Oak View CEO Tim Leiveke. “I think you’re going to see a greater commitment to cleanliness.”
Arena also uses grab-and-go technology from Amazon that lets customers pay for items automatically without having to check out with a cashier. (Amazon pioneered this technology in some of its convenience and grocery stores.)
Barrett from CAA icon — who oversaw the Climate Pledge and Golden State Warriors Chase Center in San Francisco — thinks facial recognition technology, automated concessionaires and robotics will expand as well.
“Climate Pledge and [Chase Center] From a technology standpoint, fan engagement and fan experience have set the bar high,” he said. “That’s until the Clippers building comes online. I’m sure given Ballmer’s background, he would [Intuit Dome] To be a model going forward.”
The Intuit Dome will include a double-sided Halo video board with 44,000 square feet of LED lights and walk-out technology for concessionaires.
“In five to 10 years when Ballmer is done, some of the older buildings are going to look really old,” Tillis said. “They’re going to look like dinosaurs and they won’t have the potential to generate additional revenue.”
Technological improvements aside, there is still debate as to who should fund sports venues.
In 2016, Brookings Institute Published a letter against using public dollars to fund stadiums. The report, estimated from 2000 to 2014, lost more than $3 billion in tax revenue on tax-exempt municipal bonds used to finance pro sports venues.
Leiweke, who linked the islanders with private funding to build the UBS Arena, agrees that it is best to avoid public funding.
“Municipalities and states need to spend their money on schools, education, transportation and life safety,” Leiweke said. “There’s an ever-evolving thinking going on now about how we [privately] Fund these buildings and drive these teams to find new sources of revenue going forward.”
In most circumstances, teams have an advantage when soliciting public dollars, and sometimes threatening to move if the money is not received. This can harm the local economy. But after St. Louis sued the Rams for departing in 2016 — after receiving a $700 million settlement — teams will probably think twice before relocating.
Therefore, in western New York, Pegula Sports & Entertainment, the owner of the NFL’s Buffalo Bills, is expected to split the cost of a new venue with the state.
Engineering firm AECOM released a report that estimated: $1.35 billion price tag Estimates for a new venue adjacent to the existing Highmark Stadium, and at least $300 million more for the downtown stadium. The Bills’ lease on Highmark expires in July 2023, and the team aims to work on a new, 60,000-seat area till 2027.
Asked whether inflation concerns could affect financing for sports owners, Mulvihill replied: “These are long-term, 20, 30-year decisions for owners, cities and states. 10 percent of the cost of construction growth is not materially changing those decisions.”
Barrett estimates that up to $15 billion will be invested in new pro sports venues over the next 15 years. This estimate rises to $20 billion when counting renovation projects. Barrett and Mulvihill both suggest that more teams will regroup than start fresh.
jacksonville jaguars And the Green Bay Packers are among the NFL teams looking to relegate. In the Packers’ case, they raised money by issuing $90 million of public stock to help fund a $250 million renovation project to Lambeau Field.
“You’re going to see significant investments over the next 10 to 15 years,” Barrett said, adding Major League Soccer franchises, including champion NYCFC, among teams privy to new stadiums.
Should clubs arrange for private financing, which they usually do, more revenue awaits.
The Clippers forged nearly $1 billion in naming and partnership deals for the Intuit Dome, which is set to open in 2024. CAA Sports President Paul Danforth said that fintech and crypto companies are particularly eager to spend money on sports to establish their brands. digital age.
Markets like Buffalo shouldn’t expect megadeals for teams like Los Angeles, Danforth said, “but it’s still a great opportunity for a brand in New York and the NFL.”
Danforth said, “In the past, they couldn’t afford to buy the naming rights. But some of these businesses are growing at such a rapid pace that it’s accelerating their opportunity to engage in those conversations. And these opportunities He doesn’t come around. Often. That’s why brands want to associate with him.”