Arlington Heights offer Bears Tax Cuts for Stadium

There are five phases of any business.

1. Startup/Launch
2. Growth
3. Shake-Out
4. Maturity
5. Decline

Due to the nature of the NFL (revenue sharing, constant/growing market), none have really hit the decline phase. The closest in the NFL is when a team relocates.

So the pertinent ones are the first four. When the Bears move to AH (theoretically), they will be in their launch/startup phase. This is really not an exact correlation to a starting or launching business as the Bears have a healthy, running business and are just relocating..... but for illustrative purposes it will be a startup in AH and will be swallowing a lot of capital expenses and trying to get revenues to exceed those expenses. The Bears will be putting out a lot of money. They will also be looking to additional future expansion (growth) in order to fill out some of the additional activities surrounding the stadium. They can go with several different types of business structures and perhaps revenue sharing in order to bring down needed expenditures to launch these in a shorter time frame. But the essence is they will have heavy expenses, heavy future projected expenses and uncertain revenues due to a new location. I think revenues will grow, and I am sure they do also, but the fact is those are projections and revenues will be unknown. In that phase of the business, it is not a good idea to pay royalties or have other costs such as that (for the Bears, the equivalent would be taxes - again not a real equivalency since taxes are a fixed overhead expense but since this an illustration and I am MSUing as I go along, it will suffice). So they want this expense low in order to allow them to get to the growth phase.

The growth phase is normally after breakeven. Again, since it is a profitable business that is moving, this will happen VERY quickly. Possibly day one. During this period a company will have excess cash. Some of this (the part that the Halas family does not siphon off), be used to fund the growth around the stadium to further increase their revenues. Again, at this point taxes need to be moderated in order to help fund this growth which will increase revenues and ultimately taxes due. 

The shake out phase is something that the NFL is kind of sheltered from. It happens when revenues level out due to a drop in demand (really does not happen in the NFL - at least to a significant degree) or an increase in competition. Again, they are pretty much shielded here. They now do have another league, but does anyone really consider them to be a threat? So they really have not gotten to this phase and so not beyond it either.

Going back to the growth phase, they will continue to invest in the surrounding infrastructure, increase revenues, and pay down debt. As this happens, they municipalities will cease their subsidies that allowed the team to grow and profit, but the team will also have larger revenues and profits. So the taxes will be much higher but the team will be able to afford it. The NFL is kind of unique - some of their capital expenses get subsidized by taxes and revenues continue to grow through TV, streaming and other growth. (not even including the new various revenue flows from the actual stadium like larger seating fees, food, etc, etc). And the teams not making as much get to have revenue sharing to be sure that no team really does awful, Not as good for the high earning teams, but the money is more than enough to deal with it.

So while every municipality wants a robust tax base, the best way to get it is to help the business become a robust business and allow them the help in early cash flow to get there. 

Good. I hope that happens

So true

The saga continues. I'm running out of popcorn