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Volume 21 No. 43


Los Angeles Rams owner Stan Kroenke and his wife, Ann Walton Kroenke, are investing $1.6 billion in the team’s new Inglewood stadium, a project that now costs in excess of $4 billion. The information was provided by finance sources after banks met earlier this month to arrange a $2.25 billion loan for the construction.


The Kroenkes’ $1.6 billion investment is higher than the final price of the last NFL team to sell, the Buffalo Bills, which were bought by Terry and Kim Pegula for $1.4 billion in 2014. That underscores the allure of the L.A. market as well as the surging price of building the yet-to-be-named stadium.

Stan Kroenke’s investment in the new stadium tops previous NFL team sales.
Photo: getty images

“It is unprecedented,” one banker said of the investment. By comparison, after debt, the top equity infusions into stadiums from NFL team owners, such as the Cowboys’ Jerry Jones and Falcons’ Arthur Blank, have topped out at a few hundred million dollars. Kroenke also has agreed to a completion guarantee, the finance sources said, meaning he covers cost overruns and is responsible for the debt if the project does not open on time.

The $4.25 billion cost for the 298-acre site just four miles from LAX airport more than doubles the most expensive stadium ever built in the U.S., the $1.7 billion spent on MetLife Stadium in New Jersey. The cost also includes the value of a 6,000-seat amphitheater but not the planned retail and commercial development, as well as the building of a new NFL Network home that is expected to drive the total cost of the project close to $5 billion if not more, the finance sources said.

The price tag has skyrocketed since NFL owners first approved the stadium in January 2016, when Stan Kroenke estimated a price tag of $2.3 billion. It soon rose to $2.6 billion, and then in March got cited in media reports as $3 billion. Part of the soaring cost is due to ensuring that the venue can withstand an earthquake, and the new projected figure includes what are known as soft costs, which cover items such as access roads and utilities and by themselves are budgeted at $850 million, the sources said.

Rams/Chargers stadium cost sources

Amount Source

$2.25 billion Banks
$1.6 billion Stan and Ann Kroenke
$400 million NFL stadium financing

Total: $4.25 billion
Source: SportsBusiness Journal research

The Rams declined to comment.

The sources asked for anonymity because the bank meeting on May 4 in L.A. was confidential. Kroenke met with the bankers at a reception after the meeting and a tour of the construction site.

JPMorgan Chase is leading the bank group, which includes Bank of America, Citigroup, US Bank, Citizens Bank, Sumitomo, GSP Capital, MUFG Bank and Fifth Third Bank. The minimum a bank is lending is $50 million and the maximum is $300 million, the sources said. The deal should close this spring.

JPMorgan declined to comment.

In a loan like this, the lead bank arranges for other lenders to buy into the debt as a way to spread the risk. That process is called syndication.

The stadium, scheduled to open in 2020, will house both the Rams and Chargers. The Rams are the primary equity partner in the stadium operating company, though the Chargers have a piece, too, and so will pay off a portion of the debt costs.

The Inglewood, Calif., facility will now cost $4.25 billion to build.
Photo: courtesy of the los angeles rams

The loan’s pricing is 200 interest points over the floating rate index, the London Interbank Offered Rate. Last week, the three-month LIBOR was 2.35 percent, so if for example the Rams were paying interest last week, the rate would have been 4.35 percent. The Rams are not borrowing the full $2.25 billion right away (they tap the credit as construction moves on) and that total amount will be reduced after personal seat license fees are used to pay down the debt. Nevertheless, interest alone could be well north of $50 million annually.

The deal includes a $183 million interest reserve, so the Rams can pay interest in coming years before all the revenue starts flowing, one of the finance sources said.

Of course, the stadium is expected to be a revenue-gushing machine. The loan requires pledges of revenue that is 1.75 times debt, the finance sources said. Including PSL sales, that suggests stadium revenue of close to $4 billion.

The stadium is to host not just the Chargers and Rams but concerts, other sports and events for the 2028 Summer Olympics. The 2022 Super Bowl also is scheduled for the stadium.

Howard Hughes built airplanes, made movies, dated Hollywood starlets and flew around the world.


But he never built a ballpark.

Now the late billionaire’s real estate development company — The Howard Hughes Corp. — is about to start pouring concrete for its $150 million Las Vegas Ballpark for the Class AAA Las Vegas 51s in Summerlin, about 10 miles west of the Las Vegas Strip.

Hughes Corp. owns the New York Mets affiliate and will change the franchise’s alien-inspired name when the team moves into the new ballpark in 2019. The team now plays at Cashman Field in downtown Las Vegas.

Las Vegas Ballpark will be a key anchor in the urban core of the Summerlin community.
Photo: rendering: the howard hughes corp.

Hughes executives and HOK architects designing the ballpark see it and the adjacent Vegas Golden Knights headquarters and practice facility as key economic and real estate drivers in the affluent Summerlin area.

Tom Warden, Hughes senior vice president of community and government relations, said the 10,000-seat ballpark will be a centerpiece in a planned urban core for the 22,500-acre community that’s on land Howard Hughes bought in 1952.

“It is new urban in nature,” Warden said of the 6,000 acres slated for the downtown portion of the development, including the ballpark. The master-planned community already has 100,000 residents and is projected for another 100,000, Warden said.

Plans call for a live-work-play, walkable urban area with 4,000 new housing units, complete with offices, restaurants and retail. “It’s going to be a cool downtown in a suburban location,” said Michael Parks, a senior vice president with commercial real estate firm CBRE.

The ballpark follows the urban core’s drive for density, sitting on just 8 acres. The facility’s design elements will include a 50-person outfield swimming pool, outdoor pool tables and other games, and a “beers of the world” concessions area, said Anton Foss, HOK managing principal. “People will want to get up and walk around,” he said.

The ballpark also will be able to host soccer, concerts and other events beyond baseball. It could seat as many as 15,000 for concerts.

The ballpark is the latest major sports project for the Las Vegas metro. T-Mobile Arena, home of the Vegas Golden Knights, opened in 2016. The NFL’s Raiders are building a $2 billion stadium in Las Vegas and will relocate there from Oakland in 2020.

While Minnesota United has yet to gain much attention after its entry into MLS last year, the team hopes that will soon change, especially when its new stadium opens next year.


“We’ve got to do it our way, creating our own identity and who and what we want to be,” CEO Chris Wright said of his club’s philosophy. 

Season-ticket sales have reached their cap as fans anticipate the arrival of Allianz Field.
Photo: twitter

At the core of that strategy is Allianz Field, a privately funded, $200 million stadium that is more than 50 percent complete and is set to open next April.

“Three years ago the team was playing in the NASL and had under 500 season-ticket holders, and now we’re roughly a year away from the venue opening and we’re sold out of that inventory,” said Bryant Pfeiffer, Minnesota United chief revenue officer. “Awareness of the team is at an all-time high and should only keep growing.” 

‘Wonderwall’ strikes a chord at new stadium

When it opens next year, Allianz Field will have a 2,800-person supporters space that will be known by just one word, according to Minnesota United CEO Chris Wright: Wonderwall.

It’s a reference to the 1990s song by the British band Oasis, which has become a hallmark in the club’s brief history. It dates back to 2011, when then assistant coach Carl Craig began using it to get the players in a positive mindset. After the team, then known as the NSC Minnesota Stars, clinched a spot in the NASL playoffs by one point the players sang it with their supporters, known as the Dark Clouds. The tradition has stuck, and that high level of fan passion and fervor is a key part of the team’s success.

“That section and that song? That’s going to drive the experience inside Allianz Field,” Wright said.


Wonderwall, by Oasis (excerpts)

Today is gonna be the day

That they’re gonna throw it back to you

By now you should’ve somehow

Realized what you gotta do

I don’t believe that anybody

Feels the way I do, about you now …

Because maybe, you’re gonna be the one that saves me

And after all, you’re my wonderwall

Earlier this month, the club hit 14,500 season-ticket holders for next season — its self-imposed cap — after starting the 2018 season with 11,000. It has more than 600 people on its waitlist. The new stadium, which was designed by Populous and is being built by Mortenson Construction, will seat 19,400. Last season, the team averaged 20,538 fans in its temporary home of TCF Bank Stadium. There are also three premium clubs in the stadium that are completely sold out, and 21 of the stadium’s 25 suites have as well. 

Minnesota United is touting some of the unique elements the stadium will bring to fans. Among them are a brew hall that will feature 96 beer taps and will be open on non-game days; a large “great lawn” outside the stadium that Wright said the team will have programming on; and a 2,800-person standing supporters section. 

Minnesota United also is working with Oak View Group to help it sell sponsorships around the new stadium, including three gate partnerships and potential naming rights for its club spaces. It signed a 10-year deal with Bell Bank in April for naming rights to one of the gates, the first top-tier sponsorship the team has signed since its naming-rights deal with Allianz.

Moving into the new stadium will be a significant revenue booster for the team, although Wright noted that the club’s expenses will rise as well as it has chosen to self-manage the stadium.

“Our goal is to break even next year, and that would mean our revenues would have to go up exponentially,” Wright said. “But our owners are in a position to say that we need to make sure the experience we are generating for the fans is absolutely second to none, and that is far more important.”