The cost of the new Bills stadium keeps rising. Will fans have to pick up the tab? (2024)

The cost of the new home of the Buffalo Bills has risen from its original estimate of $1.35 billion to $1.54 billion and is projected to reach at least $1.7 billion by the time it’s done in 2026.

Those cost overruns – estimated now at up to $400 million – are the responsibility of the Bills, according to the agreement reached by the team with New York State and Erie County.

But will all that money really come from the wallet of Bills billionaire owner Terry Pegula or should season ticket holders expect to at least share in those costs?

The Bills insist they will not, but experts on stadium financing say that as the cost goes up, one way or another, fans will end up paying more than they would have if the price had not gone up.

While some of the cost could be made up for in ticket prices and other ways to raise money through sales at the current and new stadium, there’s a better chance it would be done through personal seat licenses, according to some analysts, because those proceeds do not have to be shared leaguewide.

PSLs will be required for every season ticket holder planning to buy tickets at the 60,000-plus seat new stadium, which is receiving $850 million in public funds from the state and county.

Some experts on stadium financing believe that because the team’s portion of the stadium cost has risen from around $500 million to up to $850 million, or about 40% of the total cost, that PSL prices could increase or jump by up to that same percentage in some or all sections from the team’s original price points being developed a few years back.

Many of the projected prices for the PSLs, good for the 30-year life of the team’s lease, were revealed in a survey distributed to some fans in May 2022.

It’s also possible that there are other plans in the works to help raise money for stadium cost overruns, according to these analysts. They include bringing on a minority owner, which Pegula has expressed interest in doing, or trying to benefit from ancillary development that often happens around new stadiums.

The Bills and their consultant handling PSL sales, Legends, will not talk publicly about pricing for the seat licenses. The only pricing that has come out so far is from information provided by fans in the club seats who have been presented with the team’s new stadium sales pitch while visiting the Stadium Experience Center in Williamsville. No general admission season ticket holders have been to the center yet to discuss PSL pricing, and some fans have been told that pricing was not set in stone yet for those seats. The center opened in March.

“It doesn’t even matter if there are cost overruns,” said Victor Matheson, professor of sports economics at Holy Cross College.

“It simply has to do with the fans ending up with a much nicer stadium and nicer fan experience, and the owners knowing they can squeeze more money out of people for the better experience,” he added. “It’s not because they have to, but because they can.”

However, in a recent conversation with The Buffalo News, Bills Chief Operating Officer Pete Guelli said the price of the PSLs will not increase if the cost of the stadium goes up, even as some of the initial pricing in club seats seems to suggest otherwise.

“We know, as the stadium price goes up, we’re responsible for those overruns and it’s not going to be reflected in the price of the PSLs,” said Guelli, who has experience with PSLs at MetLife Stadium having worked in the New York Giants front office.

Matheson said stadium cost overruns are fairly common during the construction of what are now billion-dollar NFL stadiums. In the case of the Bills, officials close to the project have said cost overruns are mostly due to inflation that drove up the cost of supplies and materials, as well as labor.

“The Pegulas either have to take that hit or they try to pass some of that – not necessarily all of it – to the consumer,” said Chuck Lindsey, professor of marketing at the University at Buffalo. “That may be why we’re seeing a fairly big difference from the early estimates for PSLs from a few years ago and what people are being presented with when they go through the Stadium Experience Center and talk to a sales rep.”

Some fans — what the Bills consider a minority of the season ticket base — have been pushing back after hearing initial PSL pricing for club seats, which seem to be more than the estimates from the survey of two years ago. Because of that, fans with season tickets in reserved seating, which makes up most of the stadium, are guessing their PSLs may also be more expensive than first anticipated. And, in Buffalo, there are fewer corporate buyers to purchase pricey PSLs.

“When pricing comes out and people form their initial expectations, they anchor to that potential fee, but then when a year or two goes by and it’s more money, that creates some sticker shock,” Lindsey said.

In the survey, club seats were expected to cost between $6,250 and $16,500, but some of the new stadium’s highest-end PSLs are selling for much more.

Fans say the Bills are asking $50,000 for the premier second-level club section at the 50-yard-line – the Founders Club (only 750 of those seats are being sold), $20,000 for the East Club, seating on the second level that runs the entire length of the stadium, and $15,000 for the Field Club, which is in the lower bowl behind the Bills bench. Some also report being offered a PSL for $10,000 in lower-end club sections.

Though it is a small sample size, these prices do fall in line with the potential for the increasing PSL costs in tandem with the anticipated cost increase for the Bills’ share of the stadium price. The clubs are where the team and Legends may feel there’s more opportunity for additional money to be made.

Legends has run the sales of PSLs at a number of the most recent new NFL stadiums, including raising around $550 million at the Las Vegas Raiders’ $1.9 billion Allegiant Stadium by charging between $500 and $75,000 per PSL. The stadium opened in 2020.

The Bills followed Legends’ recommendation to start with the most expensive PSLs before moving onto the general reserved seating, and Guelli said there will be PSL price points that fit every fan.

And even if prices were to be higher on some of the least expensive seat licenses, it would not have the same effect, Lindsey said.

For example, an upper-level end zone seat PSL that was priced at $500 in the survey would jump to $700 if the team were to bump the price by, say, 40%. An upper-level seat between the 40- and 15-yard-lines priced at $1,750 in the survey would jump to $2,450 in that scenario.

“If you were initially planning to get charged $1,000 for a PSL and you’re told by a sales rep that it’s going to be more like $1,400, that’s not that bad,” Lindsey said. “That’s an extra $400 over 30 years.”

But PSLs won’t be the only cost fans have to worry about. They also likely will be dealing with significantly elevated costs for tickets, as well what could be higher-priced merchandise, parking and concessions. Matheson said in an analysis he conducted of 15 new stadiums, the average cost of a ticket in the first year rose by around 30%.

Still, teams in need of help with stadium construction costs will likely prioritize raising money through PSLs over increasing ticket prices, because the PSL money can all be kept by the team and goes directly toward stadium construction, Matheson said. Meanwhile, for ticket revenue, there’s a 60/40 split required by the NFL, with 40% going to the visiting team.

“They don’t really want to double their ticket prices because that doubles what goes back to the league, so what they’d rather do is finance the stadium through a big PSL,” Matheson said. “That will be a better deal for the team.”

There are alternatives to raising more money through PSLs.

In April, Pegula announced that he is exploring the potential sale of a noncontrolling, minority stake in the Bills, which could pull in close to $1 billion.

Watching a recent optional training practice from the sidelines was Snyder native Jeffrey Gundlach, the billionaire investor whose $65 million contributions fueled the expansion of the Buffalo AKG Art Museum. Gundlach, who is the co-founder and CEO of mutual fund company DoubleLine Capital, would be on a speculative list of potential candidates for such a role.

The Bills have said they are open to adding multiple limited partners.

Andrew Zimbalist, a professor of economics at Smith College, said an increasingly popular way to raise money for a stadium build is the team investing in mixed-use development around the stadium that comes with subsidies, incentives and tax abatements.

But the Bills have said they don’t want to be in the development business. And the stadium being in a sparsely developed section of Orchard Park for the last 50 seasons has not created much spinoff development. Some doubt that even the building of a new stadium would change that.