Last week, Buffalo Bills owner Terry Pegula made headlines in the NFL for reportedly considering selling a minority ownership in the multibillion-dollar organisation. Now, fresh information on the escalating cost of the next Bills stadium may give insight on the motive for the exploratory sale.
Pegula recruited investment bankers Allen & Company to oversee the potential sale of a minority ownership in the NFL team. While the exact proportion of the franchise that could be made available is uncertain, Tim Graham of The Athletic speculated that it could be 25%, but that amount is allegedly not locked in.
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Buffalo Bills’ franchise value (according to Forbes): $3.7 billion
With NFL income increasing and an even brighter future for the team once the new stadium is completed, the Pegula family could have simply been capitalising on a market teeming with people looking to invest in an NFL franchise. However, there could be another reason for the unexpected interest in a partial sale of the squad this year.
The Buffalo News reported over the weekend that cost overruns for the new Bills stadium might stretch the project from $1.4 billion to at least $2 billion by the time it is completed. Importantly, the Bills would bear the cost of the $600 million overruns.
According to Mike Florio of Pro Football Talk, Pegula could profit by selling a 25% ownership in the Bills for up to $1.5 billion. It would not only pay the additional cost of building a new Bills stadium, but it would also provide him with further financial protection if the stadium’s construction costs increased further. More crucially, he’d still come out ahead even if half of the proceeds from a sale went to the stadium.
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This would also not be the first time that the new Bills stadium has cost far more than expected. In August 2023, John Wawrow of the Associated Press reported that Bills stadium cost overruns were approaching $300 million. Less than a year later, the sum is approaching $600 million. Notably, the new stadium is not scheduled to open until the autumn of 2026.
In terms of taxpayer costs, the original plan called for New York to pay $850 million of the $1.4 billion total. However, the arrangement was structured so that any cost overruns would be borne by the Bills rather than taxpayers.