The Chicago Bears football team of the National Football League is moving. The Bears have occupied Soldier Field in Chicago for decades. It is an old stadium, and it is the smallest stadium in terms of seating capacity in the NFL. The Bears lagged behind other NFL teams in generating revenue because of the small stadium. After trying to work with the city of Chicago and the state of Illinois to build a new stadium, Indiana's state government made an offer for them to move about 30 minutes away from the current field to Hamden, Indiana. This has caused a lot of consternation among Illinois politicians and of course some of the Bears fans.
Illinois Governor JB Pritzker and Chicago Mayor Brandon Johnson have been quite vocal in their opposition to the move. As you might expect, political posturing has been a big part of the public conversation. I'm sure you won't be surprised to find out that the politicians are not being truthful and transparent in their statements. Both of these men have claimed for example, that no other NFL team has moved out of the city with which they are associated. They can't really believe that New York City has two NFL franchises, can they? Both The Jets and the giants play in New Jersey and have for quite some time.
But more importantly, from a business standpoint, they claim that the Chicago Bears need to pay $534 million that is left on the bill to renovate Soldier Field. The Bears have offered to make a $25 million payment to help ease the transition of local businesses we'll have to make by not having the team in town. That's quite a difference in what the politicians say is owed and what the Bears owners have offered to pay. Who is right?
Soldier Field is not owned by the NFL team. It is rather owned by the Illinois Athletic Facilities Authority, a quasi-governmental agency responsible for sports facilities throughout the state. When it was agreed that Soldier Field needed significant upgrades, the Bears' ownership and the administrators for the IAFA consummated in agreement in writing. The Bears would pay $200 million towards the overall cost of the renovation as well as $134 million in rent for the duration of the lease. The Authority would pay the balance of the bill.
The stadium is used for other functions such as concerts and monster truck rallies. But the Bears are the primary occupants and users of the facility. Pritzker & Johnson have said they expected the Bears to renew their lease when it expired, and we're counting upon that revenue to pay off the balance of the reconstruction cost. If they had known the team might move, they would have negotiated a different contract with the organization. Part of being in business is to anticipate all possibilities, determine the likelihood of each occurring, and planning for those to occur. Clearly the government bureaucracy didn't go to business school. They just assumed the Bears would stay because is was 'the right thing to do.'
Now the IAFA is stuck with a stadium that will not generate the anticipated revenue, with the looming possibility of having to beg for money from the state legislature to avoid defaulting on the loans. The same political body that didn't want to help fund a new stadium for the Bears. Pritzker & Johnson, along with other politicians, have claimed the Bears will lose money by moving to a newer, state of the art stadium, because fans won't drive the extra 30 minutes to see their beloved team. Another miscalculation of the customer. Bears fans are among the most avid and loyal fan bases in professional sports.
An understanding of basic business principles could have avoided this situation. But governments aren't run on sound business principles, so bureaucrats and politicians aren't exposed to the demands and characteristics of running an actual business. Their ignorance is exposed once again.
