The Buffalo Bills Get $850 Million In Public Funding For A New Stadium

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Hey Friends,

The Buffalo Bills have officially secured the financing to build a new stadium, and NFL owners unanimously approved the proposal yesterday afternoon.

The new stadium will cost about $1.4 billion to build. It will be located in Orchard Park—across the street from the team’s current stadium—and it will be an open-air structure with a grass field.

The new venue is expected to seat between 60,000 and 62,000 fans, with room for up to 5,000 more spectators on a standing-room-only party deck. This is a considerable reduction from the 72,000 that their current stadium holds but allows the bills to build more luxury boxes and larger concourses.

The highly-regarded architectural firm Populous has been hired to complete the project, and the Bills will enter into a 30-year lease that includes a penalty that would require the team “to pay back the entire cost of the stadium” if it were to move.

Here are renderings of the proposed stadium that is expected to open in 2026:

The announcement and simultaneous release of renderings brought out the comedians on Twitter. Last year, the Bills held their first full-capacity home playoff game in more than 25 years but still had thousands of unsold tickets because the temperature was in the single digits, and the wind chill was minus 15 at kickoff — why would they spend $1.4 billion and not build a dome?

But I think the more interesting part is how the stadium is being financed.

The $1.4 billion construction costs will include $850 million of public financing (60%), about $350 million of owner financing (25%), and a $200 million loan from the NFL (15%).

Buffalo Bills Stadium Financing 

• New York State: $600 Million

• Erie County: $250 million

• Pegulas: $350 Million

• NFL: $200 Million

Here are the details from The Buffalo News:

• The public will provide $850 million to fund construction, pending approval by New York and Erie County lawmakers, “which is far less than anyone had anticipated,” Governor Kathy Hochul said, referring to frequent speculation that taxpayers could spend $1 billion or more, reflecting a percentage of costs in line with other recent small market stadium projects. Ongoing maintenance and capital costs will add nearly $13 million a year. New York is slated to contribute $600 million and Erie County $250 million toward construction.

• The NFL will provide a $200 million loan to Bills owners Kim and Terry Pegula, following a vote of league owners at their annual meeting Monday at The Breakers resort in South Florida. Up to $150 million of the loan is forgivable, repaid through the visiting teams’ share of Bills ticket revenue over 25 years, according to the terms of the league’s “G-4” loan program, which helps fund stadium construction and renovations.

• Team owners Kim and Terry Pegula are contributing at least $350 million toward stadium construction, plus the $50 million they will have to reimburse the league. A portion of those funds will come from the sale of about 50,000 personal seat licenses to all season ticket holders, beginning at around $1,000 apiece. The Pegulas also are “responsible for any escalation in costs” to construct the stadium, Hochul said, a detail the governor called “quite significant.”

So, it’s true that the $850 million in public financing is a significant reduction from the proposed $1 billion-plus that the Bills initially requested. But still, that’s the largest subsidy ever earmarked for an NFL stadium, handily beating the $750 million that Nevada provided to the Las Vegas Raiders in 2020 by $100 million.

Many people have shared bombastic takes on social media over the last 24 hours. They either feel outraged that state and local governments feel the need to spend $850 million of taxpayer money on an NFL stadium or are die-hard Bills fans that couldn’t fathom the team potentially leaving Western New York.

I get it; this is an emotional topic. Government spending is a sensitive issue politically, and Bills fans don’t mess around when it comes to their team. But rather than contribute to an aggressive opinion on one side of the aisle, I think it’s important to discuss the nuance — this decision isn’t simply black or white.

For example, Buffalo is the third poorest city in the United States. The median annual income is $23,316, which is 28% below the national average of $31,133. The poverty rate in Buffalo has hovered around 30% for two decades straight, and more than 4 in 10 children currently live below the poverty line.

Sure, Orchard Park is *technically* right outside of Buffalo, but still, I think it’s fair to ask: Is committing $850 million in public financing to an NFL stadium, for a team that is currently owned by someone worth $6 billion-plus, the best use of state & county funds?

The answer is probably not. Of course, the economic argument is that the stadium will create jobs and provide an influx of tax revenue. But there are thousands of studies at this point that indicate those estimations are grossly overstated.

Still, the reality is that this is the game you have to play if you want a professional sports team in a non-major US city. Government officials will argue that the Buffalo Bills are an iconic part of the city and that $850 million represents less than 0.4% of the state’s proposed budget.

That’s all true, and to be honest, they have a point. Many people get upset at the idea that a multi-billionaire is having his private business funded publically by taxpayers. But the uncomfortable truth is if Buffalo doesn’t do it, someone else will. Remember, there are only 32 NFL teams.

I hope everyone has a great day, and we’ll talk tomorrow.

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