NO, AND TAXPAYERS SHOULD PREPARE FOR HIGHER TAXES

by Alex Calder

   (Plain Press July 2026) The NFL is America’s most successful sports league. Since 2020, franchise values have increased in many cases by more than 100 percent. The Seattle Seahawks are expected to sell for more than $9 billion. Players also benefit from the league’s success as each team can spend more than $300 million each year on player salaries.

   While NFL teams don’t need the public sector’s financial help to build a new stadium, local governments could benefit from its investment if tax revenues increase because of a team’s presence. Brook Park’s leadership recently decided to invest $640 million to ensure that the Browns’ new stadium would be built in the city. Is there a likelihood that the city would enjoy a financial return on this investment? Unfortunately, the answer is no, and local taxpayers will likely face higher property taxes in the future. Why?

NEWS ANALYSIS

   The first challenge is the size of the debt. At today’s borrowing rates, Brook Park needs to generate almost $40 million in new revenues to repay the debt. Brook Park will receive new earnings taxes from the salaries earned by players, coaches, and staff salaries. The new salary cap means players (home and visiting) will generate $6.1 million. The coaches, other staff members, and venue workers also pay an earnings tax. If we estimate that those earnings are approximately $100 million, there would be an additional $2 million in tax revenue. That elevates the new tax collections to $8.1 million per year.

   Brook Park could implement a tax collected from fans for tickets to games, concerts, and shows at the new stadium. Using the Browns’ average attendance levels, the same number of entertainment events at the new stadium that match what Ford Field hosts (in a larger market, Detroit-Ann Arbor metropolitan areas), average ticket prices to NFL games and concerts, and an admission tax rate of 7.5 percent, Brook Park should collect $12.5 million. Combined, the new revenue levels should produce $20.6 million each year.

   If it is assumed that these estimates are too conservative, and if tax collections are 20 percent higher, Brook Park’s taxpayers could expect $24.6 million in new revenue. The shortfall could mean the need for an addition $15 million to repay the money the city borrowed to ensure the stadium was built in Brook Park.

   Could property taxes increase because of new residential, retail, and commercial development and produce an additional $20 million? That would require growth rates that exceed what is taking place in NE Ohio and having people and businesses decide to live and work in Brook Park as opposed to downtown Cleveland or growing suburban areas. New homes and businesses will need services from Brook Park and local schools, meaning most of the new property taxes will be needed to pay for those services.

   These revenue streams will grow over time. Even a 3 percent growth rate resulting from higher salaries or ticket prices will fall short of the amount necessary to fully repay the bonds. It is likely that the revenue gap will have a cumulative shortfall of approximately $183 million. Taxpayers in Brook Park should be concerned that as the stadium ages there will be a need for substantial renovations and maintenance. The Browns, like other teams in the region, may also ask the City and County to support some of those costs.

   There is another reason to be cautious.

   Ticket taxes are often capitalized. In other words, some portion of the tax ultimately comes at the expense of team revenues because consumers are only willing to pay so much for a ticket. If the admissions tax did not exist, the team could potentially charge higher ticket prices and capture that revenue itself. As a result, the Browns may seek to ask Brook Park to use some of the ticket tax money to pay for maintenance and modernization.

   New stadiums often attract concerts and marquee events during their early years because they are state-of-the-art facilities. As venues age, however, they typically face greater competition from newer facilities. The number of major entertainment events hosted each year may decline over time, making long-term revenue projections even more uncertain. Especially given the competition that Cleveland has from markets like Columbus, Cincinnati, and Detroit.

   The stadium will raise Brook Park’s profile. Residents must decide if that benefit is sufficient to justify the additional taxes residents and businesses will need to pay. The Browns will be an asset for Brook Park, but value and profitability are not the same thing. Based on the numbers, residents should not expect this $640 million investment to pay for itself.

Editor’s note: The new Browns’ stadium is projected to cost $2.4 billion. Team owners have committed to $1.2 billion, and the State of Ohio has offered to contribute $600 million. The above article examines the expected local contribution of $640 million.