Kansas Gov. Laura Kelly, a Democrat, holds up a Kansas City Chiefs jersey with team owner Clark Hunt before a news conference last month in Topeka, Kan., during which they announced the team would build a modern $3 billion stadium in the state. Experts say the $1.8 billion state subsidy sets a record for public funding of professional sports facilities. (Photo: Anna Kaminski/Kansas Reflector)
When Washington agreed to contribute billions in land and tax breaks for a modern Commanders soccer stadium, experts thought it would remain a standout facility in attractive deals for sports teams for a long time.
But just a few months later, attention turned to Kansas, where in December officials announced plans to finance 60% of a modern stadium for the NFL’s Kansas City Chiefs. The state has pledged to spend up to $1.8 billion, the largest-ever subsidy for professional sports.
Geoffrey Propheter, who studies stadium deals as an associate professor at the University of Colorado Denver’s School of Public Affairs, thought the Commanders deal would stand out for years to come “because of how absurd it was.”
DC Council in September finalized the plan allocating more than $1 billion in public funds to relocate commanders approximately 7 miles from suburban Maryland to a modern facility planned for the ancient RFK Stadium site.
The city’s deal, which offers free riverfront land and exclusive development rights, means the district could forgo between $6 billion and $25 billion in revenue over time, Propheter said. By his calculations, that means the planned Commanders Stadium project will be the most valuable package ever received by a sports team. The team is primarily owned by Josh Harris, a wealthy investor over $11 billion who also owns majority shares in the NBA’s Philadelphia 76ers and the New Jersey Devils in the NHL.
The Washington and Kansas stadium deals – both involving the relocation of stadiums within the same metropolitan area – establish separate provisions for taxpayer subsidies to sports teams. They provide further evidence that public officials have no interest in limiting donations to billionaire team owners, despite decades of research suggesting that stadiums are a waste of constrained taxes.
The deals could further raise public prices for projects in Chicago, Denver and Newark, New Jersey, where modern or upgraded facilities for NFL and NHL teams are being discussed.
“Kansas legislators have done every NFL team and every legislator supporting subsidies across the country a huge favor because now teams can look at the Kansas deal and say, ‘Hey, what we’re asking for is nowhere near as bad or as crazy or as stupid as what Kansas is offering,’” Propheter said. “So now we just raised the expectations higher.”
Decades of research have shown that stadium subsidies are a indigent investment of public dollars. However, the average amount of stadium subsidies, adjusted for inflation, has increased over time.
The Chiefs’ deal is expected to exceed the inflation-adjusted $1.48 billion awarded to Montreal’s Olympic Stadium, which opened in 1976, making it the costliest expenditure ever in the U.S. and Canada, said J.C. Bradbury, an economics professor at Kennesaw State University who studies stadium subsidies.
When 2024 dollars are included, the average stadium subsidy for projects started in 2010 was approximately $400 million. This amount increased to $605 million for projects scheduled to open in the 2020s. He added that the median for 2030s projects has already reached a median of $825 million.
“There are many different ways to measure these agreements,” he said, “but by any metric, recent agreements with chiefs and commanders are historically high.”
Agreement with Kansas
Kansas State officials insisted on luring the Chiefs about 20 miles from their longtime home at Arrowhead Stadium in Kansas City, Missouri.
Authorities maintained that the modern stadium would nonetheless stimulate billions of dollars in economic activity earnest questions from experts and local officials about taxpayers’ ability to cover the massive modern debt.
“I think honestly [it is] the biggest economic victory we will ever have in the state of Kansas,” Republican House Speaker Dan Hawkins said last month.
But officials also acknowledged that there was more to the push than just economic considerations: Democratic Gov. Laura Kelly said landing an NFL team would make Kansas a tourist destination, aid retain teenage people and break stereotypes about Kansas as a flyover state.
“What could be cooler than being the home of the Kansas City Chiefs?” she said.
Kansas officials, chiefs and commanders did not respond to Stateline’s questions about the contracts.
The Chiefs are owned by the Hunt family from Texas, one of the richest families in the country. Forbes estimated be worth almost $25 billion.
As both the Chiefs and MLB’s Kansas City Royals – also in Missouri – openly considered building modern stadiums in 2024, Topeka lawmakers passed legislation strengthening an already lucrative tax incentive program to lure a professional sports team to State Line Road.
To finance Kansas’ expected $1.8 billion share of the Chiefs’ modern stadium, state officials will shift sales taxes from much of the metropolitan area to pay down stadium debt. Officials say it won’t result in tax increases, but these tax diversions could cut deeply into the spending priorities of other cities and states.
Neil deMause, the journalist who did it Much has been written about stadium subsidiesstated that Kansas was effectively “negotiating against itself” because Missouri was not prepared to offer such a lucrative deal. The same situation occurred in Washington, he said, when it became clear that Maryland and Virginia, which are also competing for a modern stadium, would not offer billions in free land and other benefits.
The modern Chiefs stadium will be state-owned, which means the team will not be subject to property taxes, a lucrative perk. Chiefs will pay rent, but these funds will be transferred to an account that can be used for ongoing maintenance and security of the facility. The state will also pay millions into this fund each year.
The Chiefs will keep all revenue from ticket, parking and concession sales, including non-football events such as concerts and Final Four basketball games.
‘Painful day’: Missouri officials react to Chiefs announcing move to Kansas
The Chiefs have committed a crime before in Missouri $126 million in financing education, transport, health care and other social services for a period of 40 years. However, no such agreement has been announced in Kansas.
On a non-binding 33-page website term sheet issued by the state, the team agreed to contribute $3 million annually to a community impact fund. However, this fund is controlled by the Chiefs, who can spend it on charity or on profit-generating team-branded ventures, such as health clubs.
The Chiefs also agreed to adjust their current charitable and volunteer efforts in Missouri, but neither the team nor Kansas officials responded to questions about how that benefit would be calculated or enforced.
Kansas will receive some access to its stadium for events, including graduation ceremonies and free concerts, but these will be subject to availability determined by the team and all costs must be covered by the state.
Government officials are provided with one stadium hall for most events. However, the term sheet notes that government officials must pay for their own food, with the exception of free soda and water.
“They could have at least asked for free T-shirts or something,” deMause said.
“It’s About Panic”
The unfavorable deal in Kansas will likely boost efforts by other team owners looking to upgrade their facilities, deMause said.
“For some reason, we are at a point where team owners feel entitled to demand many more billions of dollars than anyone else,” he said. “And the more they get away with it, the more their co-owners will dare to ask for the same.”
In Illinois, lawmakers have been debating for years the possibility of moving the NFL’s Chicago Bears from Soldier Field to a modern site on Lake Michigan in Chicago or the suburb of Arlington Heights. For decades, the team was owned primarily by the McCaskey family. Last month, Bears president and CEO Kevin Warren signaled a lack of “legislative partnership” when he announced the team would explore a potential stadium in neighboring Indiana.
We are at a point where team owners feel entitled to demand many more billions of dollars than anyone else.
– Neil deMause, journalist who wrote about stadium subsidies
The news was met with a frosty reception from Illinois lawmakers, the Chicago Sun-Times reported. reported.
“I don’t think it’s a real threat,” said Illinois Rep. Kam Buckner, a Democrat whose district includes part of Chicago’s South Side. Buckner said lawmakers are pushing for the team to come up with a more detailed proposal before approving a package of taxpayer-funded land and infrastructure improvements.
Buckner said lawmakers in Springfield were closely watching the Kansas stadium deal but were determined not to follow a similar path.
“What happened in Kansas is exactly what Illinois should not have done,” he said. “Kansas is preparing to hand over billions of public dollars to one of the richest ownership families in the history of professional sports — not for schools, not for transportation, not for housing, but to subsidize a stadium for a team that is already printing money.”
Buckner said his constituents have a long list of legislative priorities — from health care to affordability issues — ahead of professional sports.
Buckner, a die-hard Bears fan, said he would not be drawn into “hostage negotiations” with the team.
“It’s about panic. It’s about fear,” he said. “It’s about the system we’ve created where if you don’t overpay, a billionaire can just take his toys and leave town, and people are afraid of that.”
Stateline reporter Kevin Hardy can be reached at: khardy@stateline.org.
This story was originally produced by state linewhich is part of States Newsroom, a nonprofit news network that includes the Ohio Capital Journal and is supported by grants and a coalition of donors as a 501c(3) public charity.
