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STADIUM GEEK WEEK: G3 FINANCING

By Jaboner Jackson 8 am | The FOOTBALLPHDS continue to get an inordinate amount of email from our Wonderful Readers about G3 Financing, which we are always mentioning as an important source of NFL stadium financing.  We are not afraid to get super-PHD on any topic.  The geekier it is, the better it is.  Without further delay, here is Everything You Could Ever Hope to Learn About the NFL’s G3 Financing, presented so that even my sweet little mother can understand this intriguing topic.

What the heck is G3 financing?

G3 financing refers to loans made by the NFL to help finance the construction of new football stadiums.  It was intended to stop franchise free agency.

Why is it called G3 financing?

G3 financing (aka G-3 financing) refers to Resolution G-3 in 1999’s NFL Master Agreement, which in turn was referenced in the Collective Bargaining Agreement.  Resolution G-3 was subsequently renewed in 2003 and again in 2006.

What the heck is the Master Agreement?

Although the Collective Bargaining Agreement gets all of the publicity, it is not the only agreement that governs the NFL.  The teams themselves have a Master Agreement, which shows how revenues will be split up between the 32 teams.  For example, the Master Agreement states that all 32 franchises share equally in television revenue.  The Master Agreement also shows what revenues are not shared between the teams, such as local advertising deals.

How I can get my hands on some G3 financing?

Build a new NFL stadium with both public and private funds.

Does this mean that Farmers Field can get G3 financing?

Farmers Field will NOT get G3 financing since it will not utilize public funds for the actual construction of the stadium.

Is this free money? Or do teams and stadiums need to pay it back?

Yes, teams and stadiums need to pay back these loans.  They are paid back directly out of the visiting team’s share of luxury box and club seat revenue.

What stadiums were built with G3 financing?

The recent stadium construction boom was built with G3 Financing.  The New Meadowlands Stadium received $300 million in G3 financing.  Cowboys Stadium received $150 million in G3 financing.  Lucas Oil Stadium received $150 million in G3 financing.  In total, about $1 billion in stadium costs have been financed through the G3 program since 1999.

Why did the Meadowlands receive more than Cowboys Stadium?  Especially since the Cowboys cheerleaders are hotter?

Under the last iteration of G3 financing, each team was eligible for up to $150 million in G3 financing.  Accordingly, the Meadowlands Stadium received $300 million since the stadium had two teams, the New York Giants and New York Jets.

So why not just throw $150 million at San Diego, Oakland, Minnesota, and San Francisco?

The G3 fund was depleted after construction began on the New Meadowlands Stadium.  There has been no more funds to finance through G3 program since 2008.  There is currently no money to throw around.

Is that why the owners opted out of the current CBA?  To renew their G3 financing?

Yes.

Will G3 financing still be $150 million per team and stadium in the new CBA?

No.  We expect this figure to increase substantially.  We have heard between $200-250 million per team will be allocated in the next version of G3 financing.

Why do you guys care about this crap?

We cover the NFL in L.A.  And we can’t cover the NFL in L.A. if we don’t know everything about stadium financing.

I still don’t understand what you’re saying about G3 financing.

Don’t worry about it.  Here is the bottom line: stadiums in San Diego, Minnesota, and Santa Clara will end up getting done.  And Farmers Field in Los Angeles is already a done deal.

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We continue our Geek Week by bringing you Personal Seat Licenses and Luxury Boxes, Stadium Naming Rights, and Disposition and Development Agreements as the week progresses.  Put on your geek classes, take some No-Doz, and get ready for more information than you could ever possibly want to  know about building Brand Spanking New Stadiums.

jaboner@footballphds.com