Sunday, January 15, 2012

Hey, What's the Deal With Billion Dollar Stadiums, Anyway?

During of all the crazy Minnesota Viking stadium talk (which we have talked about, to death), one thing has consistently bothered me, but I haven't given much voice to--why is the stadium so expensive? The total cost has been estimated at just over $1 Billion. That's a lot of money, regardless of who is paying for it (if the Vikings gets their way--taxpayers about 70%, NFL pool 20%, Vikings 10%). But even if the Vikings paid for all of it, it is a shocking amount of money. When did stadiums get so damn expensive? I mean, they are always expensive, but the last few years, it seemed to me, has featured a positive explosion in costs.

And I wasn't wrong. Here's the stadium costs (adjusted for 2012 dollars*!), in millions, of every stadium built since 2000.

(*all costs as reported by Wikipedia)

The Vikings are attempting to build the 3rd Most Expensive stadium in NFL history, right behind the last two built. I don't think anyone is surprised when Jerry Jones' monument to himself topped a billion dollars. Maybe a few people were surprised that the Giants/Jets shared stadium also topped a billion dollars. Why are the Vikings attempting to compete, cost wise, with the Cowboys and Jets/Giants? Isn't shit cheaper in the sleepy urban utopia of Minneapolis/St. Paul?

And look, just five years ago, a new stadium cost less than half as much. What is going on here? Why does the cost of building a new stadium in the NFL outstrip the GDP of Liberia?

Hell, Lucas Oil Stadium in Indianapolis seemed horribly expensive, way back in 2008. It cost 75% of the estimated cost of the new Vikings stadium, and it was built for one of the most successful franchises in the NFL over the previous decade, as opposed to, in the Vikings, one of the sketchier franchises over the past decade.

And that's not the only comparison in which Lucas Oil Stadium seems to blow the doors off the proposed Viking stadium--it is in downtown Indianapolis (while the Vikings push for a stadium 10 miles outside of downtown, with little to no public transport) and it has a retractable roof (which the Vikings say they don't want, but you know that they do, and have refused to include in their estimates). It seems the Vikings are well are demanding the most expensive fixed roof stadium in NFL history.

Again--look at that chart. Look how crazily fast the costs have risen. Maybe it is time to inject a little sanity back into the argument, and instead of pushing for a Billion Dollar Stadium, just to have one, maybe it is time to compromise on that price. The Vikings don't need the 3rd most expensive stadium in league history. They just need to play in something nicer than the Metrodome (included in that category--a Metrodome with some upgrades).


Anonymous said...

It is interesting how you don't factor in how much came back into the local economy for hosting a Super Bowl like in Indys case this year?

Big Blue Monkey 2: The Quickening said...

Well, anonymous, no one can agree on an amount that comes back. If it were indeed true that a city got $400 million back from a single Super Bowl, new stadiums wouldn't be very controversial. But those numbers are probably fudged.

Wall Street Journal reports "Several economists, though, agree that estimates by Casinelli and others for prior Super Bowls calling for economic activity in the hundreds of millions of dollars are big overestimates. A study published in European Sport Management Quarterly in 2006 found that host cities’ typical increase in economic activity, after accounting for broader economic trends, was around $90 million — and that’s “giving the Super Bowl the benefit of the doubt,” said study co-author Robert Baade, an economist at Lake Forest College."

What's not debatable is that thanks to some really tricky maneuvering, the city of Indianapolis didn't get all of the taxes you probably assume they did.

The entity that manages Lucas Oil Field? They lost money on the Super Bowl.

CIB expects to lose money during Super Bowl

Pay per head bookmaking said...

well you know what? I have asked myself that same question and I think that there are several factors that are involved in this like the high cost of the materials and the new innovations and new services that want to add to a stadium, it's not only a stadium anymore, it's a multi-purpose infraestructure