The enthusiasm of Buffalo Bills fans is well-known.
Erie County wants to see how much that enthusiasm is worth.
The county will price $110 million of general obligation bonds for a new Bills stadium this week, with a heavily publicized retail order period. The results will test whether the fans known for
"We wanted to give the average person, that probably doesn't do a lot of investing in municipal bonds, a chance to get in on this deal," Erie County Comptroller Kevin Hardwick said.
The investor preview site for the deal, which carries the address
Football fans are a big, passionate market. The Bills averaged more than 69,000 fans in their current 71,000-seat venue in 2023, and the league pulls in
Although stadium-related bond deals have been open to retail municipal bond investors before, Erie County appears to be the first issuer to market its stadium bonds to fans. Hardwick said he thought it was the right thing to do.
"I thought it was important," Hardwick said, for "the fans, who have supported the stadium not only with their hopes and their dreams and their heartbreak and their frostbite over the years, but also their money. Because the existing stadium is owned by Erie County, and we have paid for the upkeep of that stadium over the years through tax dollars."
The new stadium, which will cost $1.7 billion, will also be built through their tax dollars. It will be owned by the new
The county has already paid $125 million toward construction, and this deal will cover $110 million of the remainder.
Jefferies is book-running senior manager, joined by Ramirez & Co. as co-senior and TD Securities, Raymond James and JP Morgan as co-managers. Masterson Advisors is the municipal advisor for the deal. Hawkins is the bond counsel.
The bonds are general obligations of the county and tax-exempt, which put legal constraints on how Erie can pitch them.
The Bills aren't involved at all, but gave permission to use the team's renderings of the new stadium and the word "Bills" in the website's domain name.
The county's main outreach has been through local media, where Hardwick has pitched the bonds as a "once in a generation" opportunity.
It's a novel way to sell stadium bonds, said University of Colorado economist Geoffrey Propheter, but it's not a novel pitch. Baseball teams often let fans pay to add their names to a brick in a stadium.
Sports journalist Neil DeMause, author of the book "Field of Schemes" about stadium subsidies, said the marketing evokes the Green Bay Packers' "fan ownership" structure, but for a stadium instead of the team.
Except, DeMause said, "you're not really a part owner of the stadium. You're a part banker of the stadium."
The emotional appeals at play are tried and true, and the Bills' fans, known as the Bills Mafia, have a reputation for being very passionate, said Blake Lynch, head of business development at IMTC. But it's hard to tell how many fans will be compelled to buy their first municipal bond.
The deal is in most regards a typical municipal bond sale — the smallest denomination available is $5,000, and the bonds are only available on certain brokerage platforms.
"Financial advisors who manage people's money are really going to have to help the individual investor navigate this," Lynch said.
"If you're in a low tax bracket, it may not make sense for you, from a holistic financial planning view, to buy those bonds," Lynch said. "That first-time investor maybe should be buying a corporate bond or something else that offers a better risk-return profile for that investor based on their overall financial plan."
At least the financial risks of a double-A GO bond are arguably lower than the emotional cost of supporting a team best-known for
It will also be hard to tell how many first-time buyers the deal attracts, because any Erie County GO deal would be popular with retail investors.
The deal drew AA rating affirmations from Kroll Bond Rating Agency and S&P Global Ratings, and Fitch Ratings, which does not rate the deal, upgraded Erie County to AA from AA-minus Monday, citing its new local government rating criteria.
This will be the county's first issuance with a retail order period.
The novelty will be popular with retail investors, said Kyle Gerberding, head of trading at Asset Preservation Advisors. New York issuers have offered almost $50 billion of debt this year, but around 80% of it has come from the same few New York City and New York State government issuers. Erie County has only issued $44 million this year.
It may be possible to judge interest from fans by the proportion of retail orders for the minimum denomination, Gerberding said. Many of his New York clients purchase $10,000 or $15,000 at a time, rather than just 5s.
Anecdotally, Hardwick said he's received a lot of inquiries about the bonds, and heard from people who've opened brokerage accounts in preparation for the sale. And BuyBillsBonds.com has received a lot of traffic.
If the county's strategy works, it could become a trend in stadium bond financings. BondLink CEO Colin MacNaught, whose firm supplies the investor website's platform, said many of his clients are looking for ways to appeal to retail investors.
"I think retail has been really strong over the past year, and you're seeing issuers across the board trying to tailor their bond offerings to make them more retail friendly, announcing earlier, having retail order periods, having more retail-friendly bond structures," MacNaught said.
Investors aren't likely to lose sleep over the GO bond, but Gerberding said the stadium project itself raises policy questions.
It was the largest stadium subsidy package ever
New York Gov. Kathy Hochul, a former Erie County clerk, said the stadium's impact
Football stadiums are "the worst of the worst," DeMause said. There are only a few dozen games each year when the stadium could create economic activity, and the fans who come aren't new tourists, but season ticket holders.
Teams often claim that their new arenas will hold more events, Propheter said, but that rarely bears out. The Bills' new stadium will be located a few thousand feet from the current stadium, with a similar design and fewer seats.
"You're taking a team that's there, and moving them across the parking lot, and that's supposed to generate more revenue," Propheter said. "I don't believe it."
"And on top of all of this, you're building an open-air stadium in Buffalo," DeMause said.
Hardwick said the new stadium is an improvement over the county's current deal. Under the Bills' 2012 lease, Erie has to make annual payments to the team that increase with inflation. Last year's payment was $7.4 million.
"Once we hand over the balance of the $250 million — we're at $125 million now — we will be, for most intents and purposes, out of the business of football," Hardwick said. "We'll just enjoy watching the Bills play in our backyard."
The new stadium is supposed to open for the 2026 season.
On Monday night, after the retail order period closes, the Bills will be playing the Jacksonville Jaguars, at home. Hardwick has tickets.
"I hope the sale will help the Bills win," Hardwick said. "I and about 70,000 other people in the stands will be disappointed if they don't win on Monday."
