Report: Vikings Owners to Pay Little of Team’s Stadium Pledge
Most of the discussion about a new Vikings stadium has focused on how many taxpayer dollars should go into the project-but according to a Minnesota Public Radio (MPR) report, the team's owners won't necessarily have much skin in the game despite the $427 million in “private money” that they pledged to pay for a new $975 million stadium.
According to MPR, the majority of the Vikings' upfront contribution to the stadium would come from National Football League funds, revenue generated by the new stadium, and money paid by fans watching games in the stadium.
The largest portion of the funding will reportedly come from the NFL Stadium Financing Program, from which Vikings officials anticipate being able to secure $200 million in guaranteed financing. And although the team will have to repay the loan, it will be able to do using revenue from ticket sales rather than with its own money, MPR reported.
But Vikings Vice President Lester Bagley took issue with the notion that it's not the Vikings' money, telling MPR: “Whether we borrow it from the NFL or the bank, it's private money, and it must be guaranteed, will be guaranteed by the Vikings.”
Another source of the team's portion of funding likely will come from naming rights to a new stadium. Based on other naming deals-including the one reached for Target Field-it would probably be worth about $62 million up front, according to MPR.
Some of the remaining $165 million left could reportedly come from “personal seat licenses”-which essentially are titles to individual seats in a stadium, although seat holders still have to purchase tickets separately. The Vikings haven't said whether they'll sell seat licenses, which now range from a few hundred dollars to six figures per seat among NFL teams, but the team's chief financial officer has hinted at the possibility. According to MPR, Vikings fans would likely pay about $1,300 for a seat license, and the NFL teams that use the licenses typically charge the fee for about 60 percent of stadium seats.
If MPR's estimates for the NFL loan, the naming rights, and the personal seat licenses are accurate, the team would have about $115 million of the original $427 million pledge left to pay. Officials aren't saying how they'll raise the remaining funds, but according to Forbes, Vikings management has made “capital calls” to obtain money from other NFL owners every year the Wilfs have owned the team. The magazine estimates such cash infusions at about $20 million annually to pay for depreciation and debt, and it expects them to continue, according to MPR.
Other revenue-raising options that Vikings officials have cited as possibilities are tickets, concessions, suites, and sponsorships-some of which may already be in the equation.
Bagley reportedly didn't dispute MPR's math but told the media outlet that the calculations miss a key contribution to the deal: a team to put on the field.
“Ownership paid $600 million for a team, without which there would be no opportunity for an NFL loan program, no opportunity for naming rights, and no opportunity to leverage this private contribution for a public asset,” Bagley told MPR. “Again, the new facility is going to be owned by the public, used by the public. And we are essentially requiring an NFL team to subsidize the high school and amateur sports and community events that are in there.”
The team's contribution isn't limited to the price of building a stadium either, contends Bagley. The Vikings have also committed to paying $13 million a year in operating and ongoing capital costs, which covers about two-thirds of the annual expenses. About $8 million of that is rent, and the Vikings say it will represent the highest rent in the league.
Aside from the $427 that the Vikings have pledged to build a new stadium, state officials have pledged $400 million and the City of Minneapolis has agreed to pay $150 million. State legislators are still considering a stadium bill that would need to pass for the project to come to fruition.
To read MPR's full story on how the Vikings will likely fund their portion of the stadium costs, click here.