In Buffalo, New York, the billionaires are asking for handouts again.
The owners of the Buffalo Bills, Terry and Kim Pegula, have struck a deal with New York State officials that promises them $850 million in public funding toward the construction of a new stadium for the NFL team. Although it’s less than the $1 billion some had originally predicted the cost might be, this would be the largest taxpayer contribution ever for an NFL facility — and the estimate is still likely to be below what taxpayers will eventually fund, if the history of similar deals in other cities is any indication. The Pegulas are framing it as a commitment to the shared, communal betterment of our region — rather than the cash grab to further build their absurd fortune that it most certainly is.
According to Forbes’s estimates for 2022, the Pegulas have a net worth of $5.8 billion USD (up from $4.1 billion in 2016), much of it made in the oil and gas industry. They’re part of an elite group of the ultrawealthy who saw their collective fortunes increase by 40 percent over the last year alone. They bought the Buffalo Bills in 2014, after purchasing the NHL franchise Buffalo Sabres in 2011 and investing heavily in development projects around downtown Buffalo and its waterfront. It seems they’re doing alright financially, especially of late.
Even so, the Pegulas (and the NFL) have assured us that a new stadium just isn’t possible without public funding, and they have begun to hint that without this support, the Bills might consider finding greener pastures elsewhere and relocating to a new city.
The Stadium Swindle
Such a threat has been the key piece of leverage for sports team owners for multiple decades. According to the book Field of Schemes: How the Great Stadium Swindle Turns Public Money Into Private Profit by Neil deMause and Joanna Cagan, the threat of departure has been a rallying cry for millionaires and billionaires since the Irsay family snuck the Colts out of Baltimore — literally in the middle of the night — in 1984, relocating the team to Indianapolis and a new, domed stadium. Baltimore then funded its own new football stadium in 1996 (along with a 1992 baseball stadium), stealing the Browns from Cleveland and receiving a new NFL team name, the Ravens, as their reward. Cleveland, in response, also funded new football and baseball stadiums within the next few years.
Each of these cities has rabid, storied fan bases, and each initially said no to public funding for privately owned sports teams. This pattern has played out over and over again in cities across the country in the decades since.
It looks like this: Wealthy owners, wealthier ownership groups, and even wealthier leagues tell a municipality that they need new digs and can’t afford to build them on their own. Someone expresses hesitancy — maybe the municipality, maybe the residents. Perhaps it’s about construction costs, perhaps it’s about location, perhaps it’s about seating capacity or astronomical ticket prices. Usually, it’s about cost.
The owners and leagues suggest they may just have to look elsewhere, sometimes subtly and with what seems like sincere regret, sometimes more overtly and without remorse. There’s a great collective wringing of hands on all sides.
More discussions of costs ensue, with greater urgency, this time accompanied by promises of new jobs, more money trickling into the area through sports and nonsports events, and greater “presence” on the national stage. The owners, league, and by this time many politicians and community members are downright positive that this will be an economic windfall. It turns out, they argue, that spending the money will actually create a positive economic impact.
Finally, the municipality caves, often under public pressure to do whatever it takes to keep the team in place, and public dollars are used to fund a new stadium. Sweetheart tax breaks, amazing rental agreements, and elevated “presence” make incredible profits for the owners. Team values jump by huge amounts in almost every case.
And the public usually loses money on the investment. Only in rare cases do the municipalities break even. Worse, the investment in the stadium typically stifles potential investments in other areas, so the net effect on the community is doubly negative — it has given money away it won’t see returned, and it has left itself less able to fund other things that are more important, like schools, infrastructure, and public health.
Even the business generated by new stadiums in local areas rarely extends far beyond the stadium’s walls — it is usually money that would have otherwise been spent at other local establishments, by people from within the area. Thus, local money that would have stayed local is instead funneled upward to the ultrawealthy teams and leagues. The opportunity for that money to make local improvements and drive positive community impact disappears.
The City of Good Neighbors
Buffalo, the second-largest city in New York State, has been engaging in its fair share of struggles for these local improvements lately. In June 2021, India Walton won a shocking upset in the Democratic mayoral primary against long-standing incumbent Byron Brown. Her run made national news and garnered public support from left-leaning heavyweights like Representative Alexandria Ocasio-Cortez and Senator Bernie Sanders, although Brown was able to muster enough bipartisan support from local elites and establishment politicians by the time of November’s general election to quash our dreams of a socialist-run Buffalo.
The Working Families Party (WFP), which provided much of the on-the-ground support for Walton’s campaign, has made inroads against the local Democratic Party machine through determined organizing and persistent support of the blue-collar folks who populate the majority of Buffalo’s neighborhoods. Buffalo’s chapter of the Democratic Socialists of America also provided support to Walton’s campaign and, with the WFP, was instrumental in supporting a successful health care workers’ strike against the local Catholic Health system this past fall.
Both organizations have also played lead roles in assisting Starbucks employees’ recent unionizing efforts. In December 2021, a Starbucks franchise in downtown Buffalo was the first location in the nation to unionize successfully, and momentum has been spreading ever since. As of this writing, workers at 147 Starbucks stores nationwide have begun processes for unionization, with many workers citing Buffalo’s example as an inspiration.
Outside of politics, there is another important, more widely known example of Buffalo-based generosity. The Buffalo Bills’ fan base, known as the “Bills Mafia,” has become infamous for its zealous, raucous support of the team. Fan support is so enthusiastic that members travel the country in immense numbers, routinely showing up en masse at opponents’ stadiums. Bills Mafia has also been known to exude charitable goodness, rallying time and time again to support admirable causes to the tune of millions of dollars. They even inspire the fan bases of other teams to do the same and routinely raise significant money for organizations that need it.
This enthusiasm speaks to a definite community-oriented bent in Buffalo — a willingness to help each other out and even a palpable, community-wide expectation that it’s just what people ought to do. One of Buffalo’s nicknames is the “City of Good Neighbors,” and it loves all things Bills — and in this case, the NFL and the Pegulas are taking advantage of it.
A Hefty Price Tag
In terms of taking care of the community in any responsible economic sense, it’s clear that stadium deals like the one proposed in Buffalo are never good.
When you roll in the tax breaks and favorable rental agreements that typically excuse owners from having to pay huge amounts of taxes and market-value rent, the amount of lost revenue potential for the municipality is staggering.
On a more global scale, the same pattern applies to potential host cities for the summer and winter Olympic Games, and similar debates erupt in cities that consider submitting a bid to host the games. According to a ProCon.org review of whether hosting the Olympics is beneficial to the cities that do so, the cons far outweigh the pros, especially for the working-class residents of those places. The main arguments against hosting speak to massive overspending and long-term municipal debt; the creation of significant, disruptive infrastructure with only short-term use and benefit; and the physical displacement and burdening of residents to make way for Olympic needs.
Meanwhile, the arguments for hosting are far more esoteric and theoretical — short-term tourism, global stature, and national pride — and do little for citizens. More often, Olympics investments make life for the average person less convenient at best, and financially crippling at worst.
Likewise, the public-funding-for-stadiums saga is not new, so most people who have done even a cursory examination of the issue understand the economic hit such deals entail. Plus, as damning as these agreements are, many Buffalonians will argue that the emotional impact of “keeping the team in town” has value beyond the cold, hard reality of a price tag. And Buffalo is an optimistic place — hope springs eternal in towns that have had long, hard fights against economic depression and all the consequences attached to them.
A Backroom Deal
Very little information about actual costs of the proposed stadium has been made available. Studies and subsequent reports that the Pegulas commissioned to investigate potential economic impact and project cost were initially kept from public view and then only released several months ago after Investigative Post, a local investigative reporting outfit, sued to have them made public. Further, Erie County itself, which has come out in support of publicly bankrolling the Pegulas’ request, has made accessing information and records difficult.
The Pegulas, as has been their practice, have remained almost completely silent. Behind the scenes, however, they have built a team of local advisers to help push the stadium agenda. Buffalo Business First recently reported that this team includes Tom Wiley, publisher of the region’s only major newspaper, the Buffalo News. This represents a clear conflict of interest, especially since timely, complete information about the stadium and its price tag has been so hard to obtain.
The silence about such big-money infrastructure deals is a common occurrence with stadium deals, and it’s nothing new in Buffalo’s recent real estate development history. Investigative Post has played a key role in exposing similar closed-door dealings before. They gained prominence by reporting on the Buffalo Billion scandal — in which Andrew Cuomo earmarked $1 billion to revitalize Western New York’s economy, in fact generating corruption, fraud, and federal and state investigations — through similar watchdog journalism, representing what’s become a necessary approach for protecting the public’s interest in such matters.
Sadly, much of what we do know about the proposed stadium is not encouraging. The new stadium will have significantly fewer seats overall than the current one and more seats dedicated to private suites. Private suites are huge drivers of owner revenue — which is why they appear in greater numbers in every single new stadium built. Ticket prices will continue to climb.
All of it means fewer opportunities to see the Bills play, at higher cost for regular fans, in a stadium that will have little positive economic impact and will very likely cost us more than it produces. Meanwhile, the Pegulas’ fortune will continue to grow. Sports fans, especially those in cities with struggling economies, deserve better than to have public money thrown at drummed-up infrastructure projects that will almost exclusively benefit a team’s billionaire owners.