Last week at the NFL owners meetings, the assembled owners approved a raft of small G-4 loans for current NFL stadia. The recipients include the Panthers ($37.5 million), Redskins ($27 million), and Browns ($62.5 million). Combine that with the $58 million the Packers received last year, and you’ve got nearly the amount of one full slots ($200 million) awarded to a team building a new stadium. The fund, a continuation of the G-3 program started with the previous CBA, has already assigned full slots for the 49ers, Falcons, and Vikings. All told that’s around $800 million. When the 49ers were starting construction, I figured that there was about $1 billion available, making for 4 new stadium slots and the rest for renovation work.
Since the CBA was signed, the NFL’s revenues have risen at a 5% annual clip. 2011 produced $9 billion, 2012 yielded $9.5 billion. It stands to reason that the league will eclipse $10 billion either this year or next year. That’s a point of pride for commissioner Roger Goodell, who envisions the league reaching a whopping $25 billion in revenue by 2027. It’s that growth that may allow the NFL to loosen some pursestrings and provide more G-4 money.
Rules are well set, with all projects falling into specific tranches of potential funding. After the $200 or $250 million limit, the NFL provides access to banking syndicates that provide much of the gap funding. So far the 49ers and Vikings have utilized this access. It’s definitely no giveaway. Team owners have to pony up at least $50 million to get started, and the NFL provides matching funds depending on the amount a team owner is willing to provide. Of course, there’s also a public share that comes into play, since the NFL will only provide access to G-4 loans if it sees what it considers a viable public-private partnership.
The G-4 program has a set limit of 1.5% of annual revenue to fund various projects. In the first year of the current CBA, that amounted to $135 million. The loans are for as little as 15 years, so the annual payments can be quite high. For a $200 million loan at 7-9%, that’s up to $25 million per year. That translates to 4 full slots and the remainder for renovation work. However, if annual revenue rises above $10 billion that limit rises to $150 million, or 5 full slots and the renovation remainder. That could be huge for the remaining teams that haven’t yet finalized stadium deals, such as the Chargers, Rams, and Raiders. If the NFL chooses to base G-4 availability on initial revenue projections, the limit may be set at 4 slots, the same way the G-3 program slammed the door shut after 4 $150 million slots were awarded (DAL, IND, NY x 2). If the owners are comfortable with expanding the program, another slot just might open up. Three teams competing for two slots is a lot more comforting than all three competing for one award.
Still, time is of the essence. Given the league’s previous history it seems unlikely that they’ll make huge loans in the back half of the CBA. The incentive is there for the owners and municipalities to act quickly. For now, the NFL has chosen to control the funding process through G-4, public funding, and the banking syndicates, instead of allowing a third party like AEG to buy its way into taking some revenue or a piece of a team. If you’re Goodell it makes sense. What he doesn’t want is for outsiders to chip away at what it considers “pure” revenue streams, nor does he want to set a precedent that team stakes are easily available in exchange for a stadium. With the three remaining teams, we may be coming to a point where he has no choice. The best way for the Raiders to stay in Oakland may be to exchange a minority share for a new Raiders Coliseum.
Tim Kawakami had another chat with Mark Davis this week. Davis continues to play good cop with Oakland officials, while unnamed sources (league? team?) assume the bad cop role via Matier & Ross. Davis may not be negotiating through the media in public, but someone is. Davis say that Tuesday’s City Council vote is a “positive step” but there are many moving parts in getting the deal to work, whatever form it takes. If, as Kawakami surmises, Davis considers this the last chance to stay in Oakland, the bowl-cutted one is certainly giving the appearance of due diligence. Davis’s previous comments about the team’s share of a new Coliseum indicate that he’d be interested in one of the G-4 slots, since it would involve club seat and suite revenue. Davis will get to see everything develop right in front of him, which will inform his decision. Instead of deciding right after the current season ends, he could take a page out of his late father’s playbook. Al didn’t finalize the deal to move the Raiders back from LA to Oakland until July 1995.
I remember that summer being a whirlwind of activity for the Raiders and A’s as I spent much of that year in the locker rooms. I wonder if we’re due for another whirlwind.