Green Bay Packers Lambeau Field Facility Finance Project Facility Finance Project 1 Lambeau Field Facility Finance Project Lambeau Field Renovations November 19, 2012 Kari Ann Colie PRT 503 - Facility Bond Assignment Fall 2012 Table of Contents Introduction........................................................................................................................3 Funding Sources.................................................................................................................4 Loan Repayment Schedule.................................................................................................5 References..........................................................................................................................6 Facility Finance Project 2 Lambeau Field Introduction Lambeau Field is home to the well-known Green Bay Packers in Green Bay, Wisconsin. The facility was originally constructed and opened September 29, 1957 under the name City Stadium but was often called the New City Stadium. It was the first modern stadium to be built strictly for an NFL franchise. Following the death of the teams’ founder Curly Lambeau, the stadium was renamed Lambeau Field in 1965. From 1961 – 1995 Lambeau Field went through periodic expansions due to the increased demand of more seats. In 2000 the stadium went through extensive renovations, which were completed by the 2003 season. Reasoning for the renovations were to remain financially competitive in the NFL arena. Total cost for the 2003 renovations was $295 million. These renovations were funded through a stock sale by the team ($20 million), a 0.5% sales tax in Brown County, and personal seat license fees on season ticket holders. The residents of Brown County voted on the plan approved by the Wisconsin State Legislature and it was ratified with a 53% - 47% margin. (Wikipedia) Once again the Green Bay Packers has seen a need to expand Lambeau Field. On September 1, 20ll the newly planned renovations began. Construction that will increase the seating capacity of Lambeau Field by 7000 seats is expected to be completed by the 2013 season. Expansion plans will add seats to the south end zone, and a new gate and rooftop platform in the north end zone. Once the renovations are complete there will be two new gates for better stadium entry and exit, more seats and added amenities, more crowd noise on opponents, increased economic impact, additional ADA entrance and exit points, and high definition scoreboards. Facility Finance Project 3 Lambeau Field Funding Sources The 2011 expansion project to Lambeau Field is estimated to cost $143 million. The Green Bay Packers have done some strategic planning and have come up with a concrete plan for funding the project. From the beginning the teams’ main goal was to fund the renovations without having to use taxpayer dollars. If at all possible they wanted it to be a self-funded project. Initially, the Packers were arranging to finance all cost through traditional borrowing and a stock sale if approved by the NFL. As planning continued and doors opened the franchise locked in the following funding sources. They were approved to have a stock sale, the NFL agreed to contribute to the project through the G-4 stadium construction program, and the Green Bay/Brown County Professional Football Stadium District agreed to contribute the stadium user fees. On December 6, 2011 the Green Bay Packers began their fifth stock sale in team history. The last stock sale was in 1997 and it generated $20 million in revenue, which assisted with the 2003 expansion project. This stock sale generated $64 million in revenue and left $79 million needed for project funding. Stadium user fees will account for $21 million of the project cost. This is a one-time fee that will be paid by season ticket holders. Persons holding the green ticket packages will pay $2,400 and persons holding gold ticket packages will pay $900. Ticket holders are allowed to make payments on the user fee if unable to pay it all at one time. On October 22, 2012 the NFL agreed to contribute $58 million to the expansion project. Through the “Collective Bargaining Agreement” the G-4 stadium construction program offers loans to NFL teams to assist with funding for construction of new stadiums or the renovation of existing stadiums. The Packers are the second team to receive this funding following the San Francisco 49ers. “The loan is a direct and general obligation of the NFL and is backed by the commissioners’ rights over the leagues source revenue.” (Lewis, 2012) It is considered to be an unsecured note and according to Fitch ratings it received an A+ rating. (Lewis, 2012) The Green Bay Packers will have fifteen years to repay the loan with 0% interest. (Ryman, 2012) In the end the Green Bay Packers have engineered a well-developed plan. They reached their ultimate goal of not having to use taxpayers’ dollars and found a way to self-fund the project. I believe 0% interest is an added bonus as well as the fact that they didn’t even have to borrow half ($71.5 million) of what the project cost. Facility Finance Project 4 Lambeau Field Loan Repayment Schedule NFL G-4 Stadium Construction Program 0.00% interest, $58,000,000 for 15 years = $3,866,666.67 annual payments. ($3,866,666.6) Principle Interest Total Payment Principle remaining 58,000,000.00 Year 1 3,866,666.67 $0.00 3,866,666.67 54,133,333.33 2 3,866,666.67 $0.00 3,866,666.67 50,266,666.66 3 3,866,666.67 $0.00 3,866,666.67 46,399,999.99 4 3,866,666.67 $0.00 3,866,666.67 42,533,333.32 5 3,866,666.67 $0.00 3,866,666.67 38,666,666.65 6 3,866,666.67 $0.00 3,866,666.67 34,799,999.98 7 3,866,666.67 $0.00 3,866,666.67 30,933,333.31 8 3,866,666.67 $0.00 3,866,666.67 27,066,666.64 9 3,866,666.67 $0.00 3,866,666.67 23,199,999.97 10 3,866,666.67 $0.00 3,866,666.67 19,333,333.30 11 3,866,666.67 $0.00 3,866,666.67 15,466,666.63 12 3,866,666.67 $0.00 3,866,666.67 11,599,999.96 13 3,866,666.67 $0.00 3,866,666.67 7,733,333.29 14 3,866,666.67 $0.00 3,866,666.67 3,866,666.62 15 3,866,666.67 $0.00 3,866,666.67 (-0.05) $58,000,000.05 $0.00 $58,000,000.05 Facility Finance Project 5 Lambeau Field References Ryman, R. (2012, October 23). Nfl loans packers $58 million for lambeau expansion. Green bay press gazette. Retrieved from http://pqasb.pqarchiver.com/greenbaypressgazette/access/2795908331.html Ketchman, V. (2012, October 22). Nfl contributing to expansion. Retrieved from www.packers.com/news-and-events/lambeau-development Spofford, M. (2011, October 11). Nfl approves potential stock sale. Retrieved from www.packers.com/news-and-events/lambeau-development Spofford, M. (2012, March 01). Stock sale closes; shares top 268,000. Retrieved from www.packers.com/news-and-events/lambeau-development Spofford, M. (2011, August 25). No taxpayer dollars in new lambeau expansion. Retrieved from www.packers.com/news-and-events/lambeau-development Lewis, C. (2012, May 23). Fitch rates nfl's football trust notes 'a' & affirms outstanding; outlook stable. Businesswire. Retrieved from http://www.businesswire.com/news/home/20120523006623/en/Fitch- http://en.wikipedia.org/wiki/Lambeau Retrieved 11/19/12 Facility Finance Project 6 Lambeau Field .