NFL may help Miami Dolphins owner Stephen Ross pay for renovations to Sun Life Stadium
As the Miami Dolphins pursue almost $200 million in public funds for an improved stadium, the team also may get some money from the NFL itself.
01/23/2013 12:01 AM
01/23/2013 12:26 AM
The National Football League may help Stephen Ross pay his share of a $400 million renovation of Sun Life Stadium.
Like other NFL owners seeking better stadiums, Ross would likely pursue league funds reserved for the projects, according to interviews with team insiders. The program could mean tens of millions of dollars in league money for the Dolphins as the team pushes for Florida and Miami-Dade to pay for just under half of the renovation.
The Dolphins have downplayed the NFL’s potential role as a significant player in the financing plan. Team executives say it’s too early to talk about potential NFL dollars, since lawmakers first must approve public funding for the effort.
“Until the legislation passes, it’s too speculative,’’ said Ric Katz, a Dolphin spokesman.
Miami-Dade commissioners could decide Wednesday whether to support the state legislation that the Dolphin drafted in order to fund the renovation. The project would bring a canopy to Sun Life, along with revamped jumbo monitors, new seats and stands much closer to the sidelines. Ross, a developer whose net worth is estimated by Forbes at $3.1 billion, has pledged to put at least $201 million in private dollars into the upgrade of the stadium his company owns.
Commissioner Barbara Jordan is sponsoring a non-binding resolution endorsing the state bill, which would allow commissioners to raise mainland hotel taxes to fund the bulk of the $199 million Ross has requested from the public. Florida would pay $90 million over 30 years to fund the project.
The Dolphins ramped up their public campaign before the debate — airing pro-stadium television commercials over the weekend and buying full-page newspaper ads slamming their top critic, billionaire activist Norman Braman. Braman dismissed the ads as “desperate,” calling the tax-funded plan “welfare for a billionaire.”
On Tuesday, the Dolphins also released a three-page document touting the plan’s value to taxpayers. Along with the economic boost Sun Life creates when hosting Super Bowl or a national college championship, the document highlighted Ross’ willingness to use private dollars to pay at least 51 percent of the costs.
“Just because the Marlins did a bad deal doesn’t mean we should oppose a good deal,’’ the Dolphins wrote.
Securing league money wouldn’t alter the mix of private and public dollars that Ross proposed, but it could lower the team’s share of the financing. While technically a loan, the league’s stadium program uses revenue from ticket sales and other dollars that teams must pay to the league as part of a revenue-sharing program, sports-finance experts said.
Teams “have to pay it to the league in any event, whether they get something out of it or not,’’ said Mark Ganis, a stadium-finance consultant and president of Sports Corp in Chicago.
The NFL’s stadium program isn’t a secret. Created in 2011 to replace a similar program, the NFL’s “G4” loan pool is reserved for stadiums with some public funding or contribution. Teams in San Francisco and Green Bay, Wisc., are set to receive the money for their stadiums, and others in San Diego and Minnesota hope to as well. Owners must pay back the money out of team profits if the stadium revenues fall short.
The Dolphins have been reluctant to talk about bringing on the NFL as Ross’s partner in the deal. A mention of the possibility appeared briefly on a Dolphins-run website touting the plan, but it has since been removed.
“There is also a significant amount of NFL funding that may become available for Miami-Dade if there is a public investment component,’’ the site, miamifirst.com, said in its Frequently Asked Questions section. “We are still working through these details with the League and will provide more information as soon as it becomes available.”
It was unclear Tuesday how much league money the Dolphins might be able to pursue. A league spokesman was not available for an interview. The G4 criteria provides loans for team owners up to $200 million, but the NFL won’t put in more money than the team itself.
NFL dollars could be particularly helpful for the Dolphins, a team with one of the largest debt loads in professional football. An analysis by Forbes found the Dolphins have the third-highest ratio of debt-to-value in the NFL. The team’s $380 million debt represents about 36 percent of the $1.06 billion value Forbes gave the Dolphins in its latest analysis. That puts the Dolphins behind only the New York Giants and Jets — teams that are jointly paying off most of the debt from a new $1 billion stadium.
The Dolphins owe about $230 million on Sun Life, largely thanks to a $210 million renovation H. Wayne Huizenga funded with private dollars when he was the owner in 2007.
That debt comes due between 2015 and 2017, meaning Ross must find a way to retire or extend that debt while raising new dollars for the planned renovation. Katz said none of the proposed $400 million funding would be used to retire any of the team’s existing debt.
Despite a rocky economy and wobbly fan support, stadium profits are healthy enough to cover the team’s estimated $380 million debt, according to Forbes and a December analysis by Fitch, a financial ratings firm. “They’re doing fairly well,’’ Fitch analyst Chad Lewis said of Sun Life.
But debt payments tied to the stadium are set to increase from $9 million a year to $20 million in 2014. Should revenues dip from more lackluster performances on the field, the Dolphins may face a profit squeeze. “Continued positive revenue growth and healthy management of expenses will be vital in retaining the financial flexibility needed for the 2015 and 2017 refinancings,” Fitch wrote in December.
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