‘Real Estate Speculation: The Transformation of US Sports Teams from Stadiums to Investments’

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Photograph: Allen J Schaben/Los Angeles Times/Getty Images

Pitching his vision of shifting the St Louis Rams to an ultra-modern stadium anchoring a massive land redevelopment near Los Angeles international airport, Stan Kroenke told his fellow NFL owners: “This is what we do”.

Nearly eight years later, with the Rams successfully relocated and playing in the $5bn, 70,240-capacity SoFi Stadium complex, Kroenke is delivering on his declaration with the help of retailers, homebuilders, Taylor Swift and Bad Bunny.

His 298-acre Hollywood Park site also boasts an artificial lake, a 6,000-seat theatre and space for millions of square feet of offices, hotels, shops, restaurants and apartments. The NFL Network has moved next to the stadium in fast-gentrifying Inglewood and luxury apartments are ready to rent.

These days, this is what everyone does. More than ever, sports franchises are a real-estate play as owners seek to stimulate revenues amid escalating costs in a period of high inflation.

Mixed-use developments where people can live, work, shop, dine, drink and play have become ubiquitous as teams seek to squeeze as much profit as possible from their land. The old paradigm was to build a new stadium with high-end facilities inside to cater to the corporate set, boosting matchday income and attracting showpiece events such as Super Bowls, World Cup games and blockbuster concerts by stars like Swift.

Now teams also want to dictate how dollars are spent each day in the streets around their venues, a trend turning billionaire sports owners into influential city planners.

A pioneer is based in the city that Kroenke was desperate to escape: the St Louis Cardinals opened Ballpark Village, a dining and entertainment district around Busch Stadium, about a decade ago. The Atlanta Braves and Texas Rangers followed suit with their new ballparks; the Houston Astros, Tampa Bay Rays, Arizona Diamondbacks, Kansas City Royals and New York Mets are among other MLB teams with similar ideas.

The NFL’s Green Bay Packers opened a district named Titletown next to Lambeau Field in 2017. The Packers said this year that Titletown’s apartments and townhouses were nearly fully occupied and that the development’s appeal helped them land the 2025 NFL draft. “The three-day event is projected to have a statewide economic impact of approximately $94m,” the club said, “or the equivalent of multiple Packers regular-season home games.”

Kroenke financed his plans privately, but pledging to revitalize a neighborhood with projects that typically include public green spaces makes giving financial incentives such as tax breaks or covering infrastructure improvements more palatable to municipal leaders and voters who might be wary of handing subsidies worth potentially hundreds of millions of dollars to billionaires.

Steve Cohen, the Mets’ owner, who is worth about $20bn according to Forbes, needs permission from New York lawmakers to realize his ambition of turning parking lots next to Citi Field into an $8bn, 50-acre “sports and entertainment” park centered on a Hard Rock casino. Making their case for a $2bn stadium and mixed-use development scheme that calls for about a billion dollars of taxpayer money, the NFL’s Jacksonville Jaguars – who regularly play in London – evoked a grandiose blueprint for a downtown renaissance in the Florida city.

Among the proposals for a new Oakland A’s ballpark was a $1bn stadium amid a $12bn residential and commercial waterfront project. After negotiations collapsed, MLB’s owners agreed in November that the team can move to Las Vegas, where a new stadium is likely to sit next to a new Bally’s casino resort and perhaps a sports-themed attraction. But with a tight nine acres available for the stadium, and the Strip not exactly lacking in entertainment options, it’s questionable whether the club will be able to profit from external activity.

In contrast, Robert Kraft, the New England Patriots and New England Revolution owner, opened a shopping center in 2007 in a parking lot next to lonely Gillette Stadium, which is about 25 miles from central Boston and Providence. Patriot Place brings in more than nine million people a year, according to a report by WGRZ, while last season the Patriots drew a combined 527,024 fans to their regular-season home fixtures.

Most owners, says Victor Matheson, an economics professor at College of the Holy Cross in Massachusetts, “understand that having an entertainment district that generates money 365 days a year is way better than the model of a walled fortress surrounded by a moat of parking lots” that is used a handful of times a year. “NFL parking lots are about the worst possible use of real estate you can think of,” he adds. “You’d much rather have a stadium in a dense area where you can generate money all the time.”

Urban stadiums, though, are often surrounded by private businesses that directly profit from the team’s presence, but not vice versa. “The Chicago Cubs don’t benefit when you buy a beer at Murphy’s Bleachers or the Cubby Bear,” two beloved bars next to Wrigley Field, Matheson says. That increases the incentive for teams to control the economic activity in their vicinity.

Matheson and colleagues examined stadium utilization and found that in an average year, NFL, MLB and MLS venues typically host fewer than five major events beyond the main tenant’s regular-season fixtures. At least MLB teams play a minimum of 81 home games per year and NBA and NHL franchises often share versatile indoor arenas. NFL sides host only eight or nine regular season matches, which is where Swift comes in.

A fiscal study of Levi’s Stadium commissioned by the San Francisco 49ers claims that the two concerts Swift headlined at the venue in July had an economic impact on Santa Clara County of $33.5m, or $16.75m per gig – a similar amount to the NFL games cited in the report.

Swift held 53 US concerts this year for her Eras Tour, all at NFL stadiums. Billboard pegged the average ticket price at $252. Six were at SoFi, aiding the Rams as well as the broader local economy. SoFi then welcomed Beyoncé for three nights in September. It has hosted dozens of gigs since it opened in 2020 and the Rolling Stones, Green Day and Kenny Chesney are booked for next year.

Kroenke, who is married to the billionaire Walmart heiress Ann Walton Kroenke, is also a ranch baron. With 1.6m acres – twice the size of Rhode Island – he is the fifth-biggest landowner in the US. The 76-year-old was a real estate developer before he became a sports owner, building shopping centres next to Walmarts. But sports teams are even more enticing anchor properties than supermarkets.

In the 1990s he founded Kroenke Sports and Entertainment (KSE). Today it owns the Rams, the Denver Nuggets, the Colorado Avalanche, the Colorado Rapids and Arsenal, among others.

The Avalanche and Nuggets play at Ball Arena in downtown Denver. It is ringed by parking lots ripe for repurposing, with KSE’s renderings depicting the concrete flatland replaced by a forest of tower blocks and parks. Kroenke is also linked to the River Mile, another big redevelopment scheme nearby that aims to connect downtown with a new “stadium district” next to Empower Field at Mile High. That’s the home of the Denver Broncos, the NFL franchise bought last year by a group led by Rob Walton, a relative of Ann and also a Walmart heir. Kroenke is also considering long-awaited development on bleak tracts around the Rapids’ home, Dick’s Sporting Goods Park, in Commerce City between central Denver and the international airport.

State-of-the-art, covered and centrally located in the nation’s show-business capital and second-biggest metropolitan area, SoFi is among the busiest NFL stadiums. Its calendar this year shows more than two-dozen non-NFL events, from Wrestlemania to Billy Joel and Stevie Nicks, the Concacaf Gold Cup to Ed Sheeran.

But megastars such as Swift and Bad Bunny are unusually lucrative, and even adding in the Rams and the LA Chargers – another NFL team who share the stadium – that’s still fewer than 45 major events in a year. And while NFL franchises share 40% of their ticket revenue with the rest of the league, it’s possible that Swift commands a much higher percentage. Since SoFi’s price tag more than doubled from early estimates, reportedly prompting Kroenke to borrow $900m from the NFL and $2bn from a bank, he likely has plenty of debt to pay off.

However, 10 miles from downtown LA and four miles from LAX airport, with the LA Clippers’ $2bn basketball arena set to further turbocharge Inglewood’s soaring property prices when it opens in 2024, the value of all that land is only going to grow.

“It’s hard to imagine [SoFi] being a great investment. He’s using that stadium as opening the door,” Matheson says. “What you’re really trying to do is make money on the mixed-use development and you’re using the stadium as a way to clear all the land for you; basically the stadium is your secondary concern.” It’s what Kroenke does.

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