Wilf likely to make money off new stadium; how much is not clear

It's a recurring theme from those who don't want to use public dollars to build the Minnesota Vikings a new football stadium: the public subsidy will fall to the team's bottom line and result in a big financial windfall for the owners.

There's reason to be suspicious. In Dallas for instance, the Cowboys' began playing in a new stadium in 2009. And when they did, the team's estimated value grew by more than 10 percent, while the rest of the NFL slumped in value. That's according to the annual rankings in Forbes Magazine's annual "Business of Football" analysis.

In New Jersey, the New Meadowlands stadium helped the Giants beat a league slump in 2010. The team grew in estimated value by more than $100 million over the course of two years, while the value of the rest of the NFL teams basically stayed flat.

There's no question a team's stadium is a big factor in what it's worth.

"You saw the [Jacksonville] Jaguars just sell for $768 million," said Kurt Badenhausen, the Forbes senior editor who has worked on magazine's NFL rankings for more than a decade. "They are probably the least valuable team in the NFL right now. They've got a terrible stadium situation where they just don't generate a lot of money from the stadium. But a team like the Dallas Cowboys or the New England Patriots can generate more than $200 million from their stadium. Which is probably four times what Jacksonville's doing. That's what separates these teams."

But getting a new home hasn't been a breakout win for every NFL owner. Some clubs that have built new stadiums in the last decade -- the Denver Broncos, the Pittsburgh Steelers and the Seattle Seahawks -- have barely beaten the league average for gain in value, according a Minnesota Public Radio News analysis of the annual Forbes rankings.

Those numbers suggest that, unless you're playing in one of America's major media markets, there's no guarantee a new stadium will be a financial game-changer. And that may be true in Minnesota.

It's hard to know exactly how much the Vikings owners will benefit from a stadium, in part because the NFL doesn't disclose football's financial secrets, and because the Vikings won't discuss it. Team vice president Lester Bagley questions the very basis of the Forbes estimates, saying they haven't reflected actual sale prices.

Andrew Zimbalist, an economist at Smith College who has researched the economic impact of professional sports, says the Forbes' values are guesses, at best.

"I don't say that to put down what Forbes does. They do a better job making these estimates than anybody else," said Zimbalist. "But it doesn't make their estimates the right number. Market behavior is more significant than what Forbes puts on paper."

Zimbalist also says the push for new stadiums across the league suggests the Forbes numbers aren't telling the whole story.

"When an owner like Zygi Wilf ... is lobbying for a very, very long time for a new stadium, that's marketplace behavior. That's real behavior," said Zimbalist. "That's the owner having a real sense that if I get the stadium I want ... in the right location, with the right amount of public support, then I'm going to be very excited about that.

"And that's why he lobbies for a long period of time, and that's why some owners make threats about moving the team somewhere else. Because they have the most information about what it's going to do to the team finances," said Zimbalist.

The Forbes numbers do bear that out, to some degree.

For example: The Philadelphia Eagles' on-paper value in the Forbes' rankings more than doubled between the two years before and the year after they started playing in their new home in 2003.

Even during the post-9/11 recession, NFL franchises were seeing average annual gains in value as high as 26 percent -- and that's a four-year, rolling average.

On the other side of Pennsylvania, the Steelers, too, built a new stadium about a decade ago. The team's value jumped by nearly a third while they moved into their new stadium in 2001.

But there's an asterisk. The rest of the NFL -- the teams that didn't build new stadiums -- grew by more than a quarter in estimated value over the same period. On a rolling average basis, the Steelers' 10 percent annual gain in the years just before and just after they got a new stadium beat the league average by only 1 percent.

Those eye-popping numbers in Philadelphia are similarly tempered by the rest of the league. The Eagles grew in value by $315 million during the run up to their new home. But the Forbes value of teams without new stadiums grew by a lot, too -- an average of $203 million.

Perhaps more importantly, the Eagles were winning. They won the NFC East for four straight years, including two in their new stadium. They made five straight playoff appearances.

The Vikings provide a close-to-home example of how a team's value can grow without a new place to play. In 1998, San Antonio businessman Red McCombs paid $250 million when he bought the Vikings from a group of 10 Minnesota owners. McCombs, too, wanted a new stadium to replace the Metrodome, but state policymakers weren't interested. He sold the team to a group led by Zygi Wilf in 2005, for a reported $600 million, which was more than double what he paid.

The NFL's most cautionary stadium tale dates to 2002, in Seattle. The Seahawks, after an intense political battle, built Qwest Field for about $430 million. As a result, that NFL franchise increased in value by about 38 percent. But their $170 million increase beat the average for teams without new stadiums by just $10 million over the same period. In percentage terms, the Seahawks' average growth rate was indistinguishable from the rest of the league those years.

But Forbes' Badenhausen says there's no doubt a new home will be a windfall for the Vikings.

"A new stadium would be an absolute home run for the team," he said, although it isn't clear how big a home run it will be until a deal is inked.

Zimbalist, the Smith College sports economist, agrees. He says the raw numbers, like the cost of a new stadium and the value of a team, aren't the most telling factors in how a stadium deal works out for an NFL franchise. The difference between business in their old home -- another fact the Vikings don't disclose -- and the business in their new home is the real value.

"Some deals are 100 percent publicly funded. Some deals, like what the Giants and Jets did in the Meadowlands in New Jersey are 100 percent privately funded," Zimbalist said. "Some deals have substantial lease rental payments. Some deals don't have that. Because of these different characteristics, you're going to see some teams have enormous jumps in their franchise value, over $100 million, and other teams are going to have very modest increases. I don't think any of that speaks to what would happen for Zygi Wilf under certain conditions if he got a new stadium in the Twin Cities."

Taxpayers can take some consolation: the tentative Vikings stadium deal announced last month has a "clawback" provision. The public stadium authority gets up to 18 percent of the capital gain if the team is sold within 15 years of the signing of a stadium bill, although that percentage drops by 1.2 percent annually.

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