Patriots teach lesson about stadium financing
FOXBORO, Mass. -- There was no need to make arguments about the other development that would come if you built a new football stadium. There was no need for journalists to resort to the tired "if you build it, they will come" cliche to start their stories.
No one was going to buy any argument that this normally lazy hamlet needed hundreds of millions in redevelopment dollars.
Save for a few Patriots games and concerts every year, Foxboro is nothing more than a pit stop on Route 1, halfway between Providence and Boston. Always has been, always will be.
So after years of trying to get Massachusetts taxpayers to foot the bill -- even threatening to move the team to Hartford -- New England Patriots owner Robert Kraft became just the third NFL team owner to build his own stadium.
Gillette Stadium was impressive on Dec. 27 as the Patriots played their final regular season game. Although it seats just a few thousand fans more than Heinz Field, its three tiers make it seem much larger than our own recently built stadium.
Kraft borrowed $452 million. He faces $20 million in annual debt payments, but the new stadium is generating $40 million a year just from sponsorships and premium seating sales.
By conventional "wisdom" for financing sports stadiums, Kraft should be crying poor. That conventional wisdom says that teams -- no matter what the sport -- can't possibly pay for a new stadium on their own and remain competitive.
The Patriots finished the regular season with an NFL-best 14-2 record. On top of that, Forbes magazine valued the team at $756 million -- in large part because of the new stadium -- up considerably from the $158 million Kraft paid for the Patriots in 1994.
The Steelers finished at 6-10. Forbes valued the team at $608 million but, in fairness, that lower valuation stems more from the fact that Pittsburgh is a smaller media market than greater Boston. The fact that the Patriots won the Super Bowl the season they moved into Gillette Stadium also helped season ticket sales and boosted Kraft's reputation as a business genius.
Massachusetts taxpayers paid $72 million for infrastructure improvements and road construction around Gillette Stadium, but the team is required to pay that money back over 25 years. Pennsylvania and local taxpayers kicked in $185.5 million for Heinz Field.
No one is expecting the Steelers to pay that money back.