The Anatomy of the Gwinnett Stadium Deal

We are now learning more details about how Gwinnett County plans to pay for the Triple-A Braves new stadium. The county is still pushing the line that this is a sound business deal that won’t be a burden to taxpayers.

County Commissioner Bert Nasuti, who started the movement to bring baseball to the county, said the stadium financing is based on highly conservative estimates and is about as risk-free as it could be.

“We wouldn’t be doing it otherwise,” he said.

Really, Bert? Let’s take a look at look at the financing plan as it is listed in todays AJC (Gwinnett edition).


* Land: $5 million
* Stadium: $40 million
* Total: $45 million

The land has already been paid for, but the stadium has yet to be built. And given its need to be built quickly, it is likely that the the $40 million price tag will go up. The underestimation of construction costs is common for publicly-financed stadiums, and the county is responsible for all cost overruns. It is possible that the construction will come in under budget, but I doubt it.

Next, let’s look at the revenues.

* County recreation fund $12 million
* Revenue bonds (borrowing) $33 million

The $12 million is gone. What is lost from these funds is the opportunity cost of what these funds could have been used for: park improvements, special programs, security, etc. Whether taxpayers of Gwinnett preferred these things or a Braves stadium is an open question. It’s too bad the County Commission didn’t let the voters have a say.

Paying off the debt is where the county truly becomes creative. In some areas, I believe the county is being realistic, but in others the projections are outrageously optimistic.


* Stadium rent $250,000
* Ticket fees $400,000
* Parking fees $200,000
* Car rental tax $600,000
* Naming rights $500,000
* GCVB contribution $400,000
* TOTAL $2,350,000

In regard to rent, ticket fees, and parking, I think these estimates are accurate.

The Braves are required to pay $250,000 a year in rent for the first five years, after that time the rent payment will rise with the consumer price index. Assuming an average CPI growth of 3%, these averages out to about $350,000 year over the next 30 years.

The ticket fees come from a $1 fee per ticket that the Braves must pay to the county for every ticket sold. $400,000 is the minimum the team must pay the county, and given the size of the stadium, it is not likely that attendance will generate much more than this.

The Braves must split net parking revenues with the county. Assuming an average attendance between 6,000 and 7,0000, one car per three fans, and a $3 parking fee, $200,000 seems to be a reasonable estimate of the county’s parking share.

Next, let’s jump to the naming rights, the last source of funding that does not require taxpayer assistance. Gwinnett can sell the rights to the stadium, but it must pay the Braves $350,000 annually from this revenue. Should naming rights sell for more in the future, the county must pay a higher share to the Braves. The county is projecting that it will earn $500,000 a year ($850,000 total — $350,000 to the Braves).

Two experts interviewed for the story state that they feel the projection is reasonable.

Adam Zimmerman, executive vice president of the Marietta sports management firm Career Sports and Entertainment, believes Gwinnett should be able to leverage the county’s wealthy population and the stadium’s relationship to the major-league Atlanta Braves to score a healthy deal. After all, he said, the stadium’s sponsor would be attaching its name to the next generation of major-league talent in Atlanta.

“It’s almost a catch-the-rising-star platform that a corporation could own,” Zimmerman said. “There’s something that could really be had from owning that gateway to the majors.”

Jeffrey Grill, who has helped build naming-rights deals as a partner with the law firm of Pillsbury Winthrop Shaw Pittman in Washington. Stadiums in heavily-populated, affluent areas have the best chance of getting a big contract, he said.

“Gwinnett County has been one of the fastest-growing counties in the country for the past 20 years. I would believe that the annual value of the naming rights should be significantly in excess of the national average and that $850,000 per year is a possibility,” he said.

I won’t dispute the qualitative assessments of these gentlemen. There is no disputing that Gwinnett is a growing area that many corporations would like to be associated with. However, that doesn’t mean any number is possible. The quantitative evidence is not favorable, as I say in the story.

The anticipated $850,000 deal would be the second-highest naming rights deal for a Triple-A team behind Chuchanski Park in Fresno ($1.1 million) and ahead of Raley Field in Sacramento ($750,000) and PGE Park in Portland ($710,000). No other naming rights deal comes close to these. The top-three stadiums are on the more-expensive west coast and serve as the host to the top-level baseball club in a major metropolitan area (not a suburb)—two of these cities host NBA teams. The Fresno and Portland facilities host other sports teams (minor league soccer and college football). Everyone knows where Fresno and Portland are. Have people outside of Georgia ever heard of Gwinnett County? I find it hard to believe that Gwinnett is comparable to these other markets.

The average Triple-A naming rights deal is $338,000. The most recent stadium naming rights deal for a Triple-A stadium occurred in Lackawanna County, PA for the Scranton/Wilkes-Barre Yankees, for which PNC will pay $365,000 per year. I think Gwinnett will be lucky to get $450,000 from any naming rights deal, which nets the county $100,000—$400,000 less than the county anticipates. If the county doesn’t get that money from naming rights, it will get it from taxpayers.

This brings me to the only official tax that Gwinnett county officials admit to. Though they operate on the erroneous assumption that the tax will not be paid by its own citizens, it is most certainly will be.

“It takes the burden off the local taxpayers,” Commissioner Bert Nasuti said of the car rental tax, which is also in place in Atlanta to fund improvements made to Philips Arena in the late 1990s. “The reason you do that is so you don’t raise taxes.

I cannot comment on how much revenue that the tax will raise, but it will most certainly be paid Gwinnett County residents—the people who rent cars in Gwinnett County—not outsiders lured in by the existence of a Triple-A team.

As for the last revenue item, the Gwinnett Convention and Visitors Bureau will contribute $400,000. This revenue will mainly come from the Arena at Gwinnett Center, another taxpayer-funded facility. Even if that facility is earning a profit—and I doubt that it is—the excess revenue going to the Braves stadium still represents a cost to Gwinnett taxpayers. Instead of funding roads or schools, the revenue now subsidizes a stadium that hands over a large portion of its earnings to a sports franchise. Using revenues from a taxpayer-funded arena to pay for a baseball stadium is like plugging a power strip into itself to generate power.

Thus, when we add up the tax liability to Gwinnett citizens to cover the $2.35 million annual debt payments, taxpayers are left to cover $1.4 million—approximately 60% of the debt.

When the deal was announced, county administrator Jock Connell stated, “We anticipate it paying for itself from day one.” This plan doesn’t come close to meeting this standard, and it is a shame that county officials have been so deceptive in presenting their plan to the public.

Also in the AJC, as a sidebar to the story, there is a story on my discussion of the stadium deal on Sabernomics. Thanks to Michael Pearson for covering the story so well, so as to make my job easier.

2 Responses “The Anatomy of the Gwinnett Stadium Deal”

  1. Don Shaw says:


    I have received the contract and it seems you left out the $500,000 that Gwinnett must place in escrow for the capital reserves to cover repair and maintenance items at the stadium. Upon readign the contract it appears that the Braves will only maintain the field. Heck it even says we are responsible for the score board maintenance.

    I was at a meeting at Gwinnett today and Jock Connell actually said to the employees of Gwinnett that he expects the naming rights to be somewhere in the $12 to $15 million on a fifteen year contract. Many employees asked questions about this and answers were not on the up and up.

    Mike Pearson has done a good job at covering this story but needs to show the debt on this as well as the revenue stream.

  2. JC says:

    The way this deal is going, what’s another $500K? 😉

    How can Connell say that with a straight face? Their own consulting firm’s rosy projections for naming rights are $650K-$750K a year.