The Chicago Bears could leave Soldier Field early for relatively cheap
CHICAGO — When the Chicago Bears recently announced a bid to buy land for a possible new stadium in Arlington Heights, Mayor Lori Lightfoot cast doubt on the team skipping town by holding up its lease with the city.
“The Bears are locked into a lease at Soldier Field until 2033,” Lightfoot said in a statement, dismissing the possibility of the charter NFL franchise leaving Chicago after 100 years as “noise.”
A review of the team’s 120-page lease with the city, however, shows that it would not be difficult for the Bears to break the agreement early — and the payment to do so would be relatively small compared with the cost of building a new state-of-the-art stadium.
If the Bears were to break the lease five years from now, in 2026, the team would have to pay $84 million in damages to the city, the analysis found. That estimate assumes the Bears’ inflation-adjusted payments to the city would continue to rise at a pace similar to increases since the lease’s inception in 2003. If the team waited beyond 2026 to leave Soldier Field, the financial penalty would be less.
An $84 million fine might sound like a lot of money, but in the high-priced world of the NFL it represents just 3% of the $2.2 billion average cost of the league’s seven newest stadiums. The Bears franchise is valued at $3.5 billion, even though the team does not own a stadium.
Allen Sanderson, a sports economist at the University of Chicago, said the penalties in the Bears lease at Soldier Field lease “absolutely will not” be a decisive factor in whether they leave the lakefront for the 326-acre site that is now home to Arlington International Racecourse.
“The numbers associated with the Soldier Field lease are just small,” Sanderson said. “$84 million is just a fraction of what a new stadium will cost.”
The Bears and the city are just 17 years removed from the completion of the $690 million Soldier Field renovation that placed a glass and steel saucerlike structure atop the limestone and colonnades of the original 1924 monument to veterans of World War I. Taxpayers covered $432 million of the project, a number that will balloon substantially once the hundreds of millions of dollars in debt and interest are paid off in 2032.
The taxpayer portion of the bill comes mostly from a hotel tax. The remainder of the Soldier Field renovations were funded in large part by an NFL loan extended to the Bears and by the team’s ability to sell high-priced personal seat licenses, which give fans the right to purchase season tickets.
The Bears’ landlord at Soldier Field is the Chicago Park District, whose board is controlled by the mayor. If the team sought to break its lease before its conclusion at the end of 2033 season, the two sides likely would enter into negotiations to reach a financial settlement, Park District officials said.
But in the event the Bears were to leave Chicago for the northwest suburbs without reaching such a deal, a damages clause in the lease requires the team to pay 150% of the money it owes on the remainder of the lease to the city within 30 days. The fewer years left on the lease, the smaller the payment becomes.
“That’s what I would call a doomsday provision, and you would hope it wouldn’t come to that,” said Timothy King, general counsel for the Chicago Park District. “That’s something that would be subject to negotiation, how to unwind the lease. I would do everything to protect the taxpayer, the interest of the taxpayer, and we would do everything we can to make the taxpayer whole.”
A spokesperson for the Bears declined to comment on the team’s lease with the city.
The lease
The Bears’ 30-year lease at Soldier Field began upon the completion of the stadium’s renovation in 2003.
Under the arrangement, the Bears make two annual payments to the Park District, one for the use of the stadium and one for the rights to 4,250 parking spots on game days. At the onset of the lease, the Bears’ combined annual payments totaled $5.7 million.
Every five years, the rent is adjusted for inflation (most recently in 2018) and the current payment is $6.48 million per year. The team, however, paid only $3.1 million in 2020 after reaching an agreement with the Park District that accounted for the fact that fans were not allowed to attend games because of the COVID-19 pandemic.
As part of the team’s lease, the Bears are allowed to keep revenue from concessions, stadium signage and the 4,250 parking spots, which account for “most of the spaces” used on game days, said Juliet Azimi, the Park District’s chief administrative officer. The Park District keeps the profits from any additional parking spaces sold for Bears games and has a contract with ASM Global to manage the stadium.
Unlike other NFL franchises that own their own stadiums, the Bears’ revenues are limited to the 10 home games played per season (including the preseason). The Park District collects all revenue from non-Bears events at the stadium and entered into an agreement with Major League Soccer’s Chicago Fire to play at the venue beginning with the 2020 season.
Also unlike other NFL teams, the Bears are unable to pursue a lucrative naming rights contract for the stadium. An original agreement would have allowed the team to pursue such a deal so long as Soldier Field remained as part of the name, but the Bears abandoned that effort amid opposition from veterans and then-Mayor Richard M. Daley.
Cramming the newly renovated stadium into the footprint of the original Soldier Field resulted in the Bears having the smallest-capacity stadium in the NFL (61,500 seats) despite playing in the nation’s third-largest media market.
So while building a new suburban stadium would come with a hefty price tag, it would also free the Bears from many of the revenue restrictions the team faces at Soldier Field that do not hinder other franchises.
Still, Sanderson, the University of Chicago economist, noted that close to 80% of an NFL team’s revenues come from lucrative television contracts that are split equally among the league’s 32 teams.
“The Bears could play in a cornfield in Iowa and it wouldn’t make much of a difference on their bottom line,” he said.
Sanderson, who argued at the time the lease was executed that it was a bad financial deal for taxpayers, said there were others who contended then that the Bears would have been better off pursuing a new domed stadium at another site in the city, including not far from the nearby McCormick Place convention center.
“It’s sort of like the old joke where the kid killed his parents and then sought mercy from the court because he’s an orphan. The Bears buried themselves,” Sanderson said. “Prominent people in town were telling them, ‘Don’t do this,’ and they were just stubborn about renovating Soldier Field. The stadium was obsolete before the first kickoff. They have the smallest dysfunctional stadium in the entire league, and it was their choice.”
The team’s lease, however, does provide options for the team to generate more income at Soldier Field by permitting the development of “team areas” within the stadium. Under the provision, the Bears are allowed to build, operate and keep all revenue from a Bears Hall of Fame, Bears retail shop, Bears sports bar and restaurant and other commercial spaces.
The franchise built a retail shop at the stadium at a cost of $596,000 in 2010, but has not pursued any of the other commercial possibilities at the stadium, Park District officials said. A Bears spokesperson declined to comment on the team’s failure to pursue additional commercial opportunities at Soldier Field.
The landlord
Another facet of the lease is the requirement that the Park District provide regular maintenance and capital improvements to Soldier Field, a point of frequent discussion between the city and the team.
The Park District receives an annual capital improvements stipend from the Illinois Sports Facilities Authority, the public body that issued bonds to pay for the construction of Guaranteed Rate Field, home of the White Sox, and the renovation of Soldier Field. That annual payment currently is around $3 million, said Azimi, the Park District’s chief administrative officer.
There are questions, however, about the availability of that funding moving forward, Park District officials acknowledged. The sports authority, which is controlled by Gov. J.B. Pritzker but also includes board members appointed by Lightfoot, receives much of its funding through hotel tax revenue, which has taken a major hit amid the pandemic and is not projected to recover until 2025.
In her reaction to the possibility of the Bears moving, Lightfoot suggested the team was using it as leverage in negotiations with the city.
“This announcement from the Bears comes in the midst of negotiations for improvements at Soldier Field,” the mayor said in her statement.
Kate LeFurgy, Lightfoot’s communications director, did not respond to questions about whether the negotiations were with the mayor’s office or the Park District.
King, the Park District’s general counsel, said his team and the Bears talk regularly about improvements that need to be made at Soldier Field. He described the most recent talks as “standard.”
“I’ve been here since 2005 and the relationship with the Bears has been constant, steady and they’ve been a marquee tenant,” King said. “There have been no anomalies this year. It’s been normal negotiations and setting up priorities between landlord and tenant.”
Azimi, who is charged with carrying out Soldier Field improvements, said, “With any landlord-tenant relationship there are always going to be requests for improvements and maybe a strain on the ability to provide those improvements, particularly as we have a fiduciary duty with taxpayer dollars.”
Azimi and King declined to detail any Soldier Field improvements the team has sought this year as did a Bears spokesperson.
The agreement between the Park District and the Bears calls for the two sides to agree on major capital improvements to Soldier Field every 10 years, starting in 2011. That would suggest the team and city would be due for such a round of talks in 2021, but King said the two sides have not put that provision into practice.
“That’s really just a default in the event the parties don’t communicate,” King said. “We don’t rely on that as a stopgap. It’s not that drastic where we have to set up a 10-year plan, because of the constant communication we have and the fluid upgrade process we have.”
That passage in the lease suggests improvements should be made to Soldier Field every 10 years “as reasonably required to make the facility among the top 25% of all NFL facilities.”
Scott Hagel, the Bears senior vice president of marketing and communications, declined to say whether the team considers Soldier Field to be among the NFL’s top eight stadiums.
The negotiations
Scrutiny on the Bears’ relationship with the city has ratcheted up since the team’s president and CEO, Ted Phillips, acknowledged on June 17 that the franchise had pursued a possible purchase of the Arlington International Racecourse.
“It’s our obligation to explore every possible option to ensure we’re doing what’s best for our organization and its future,” Phillips said. “If selected, this step allows us to further evaluate the property and its potential.”
The racecourse is owned by Churchill Downs Inc., which plans to close the facility and sell it following the conclusion of racing season. Just days after the team announced it had bid for the property, the Bears announced a deal with Rivers Casino to become the franchise’s exclusive sportsbook and casino.
Churchill has a 61% stake in Rivers Casino, with gambling magnate Neil Bluhm’s Rush Street Gaming also owning a share. The partnership only has further fueled speculation about a Bears move.
Tonya Abeln Churchill’s vice president of communications, said the company had received “strong proposals from numerous parties” interested in redeveloping the racetrack, but declined to say how many. At least one other group, led by former Arlington Park President Roy Arnold, has bid on the property in hopes of preserving horse racing there.
Abeln said there is “no concrete timeline for selecting a buyer” and said Churchill would provide an update “in the coming weeks as the evaluation process runs its course.”
Since the Bears moved to Chicago in 1921 from Decatur, the team has not owned its own stadium. It played at Wrigley Field until 1971, when the team relocated to Soldier Field. The Bears, however, periodically have threatened a move out of the city, with other suburban locations floated in the past.
Lightfoot seized on that history in her statement, which mocked the Bears for not being relevant in the postseason and dismissed the threat of the team relocating as “clearly a negotiating tactic that the Bears have used before.”
In a recent interview on 670 The Score, NFL Commissioner Roger Goodell left the door open to a Bears move, but noted the length of the team’s agreement with the city.
“We have a long lease at Soldier Field,” Goodell said of the Bears. “It’s a great place. But we’re all looking to the long term and trying to look at alternatives, and that’s what the Bears are doing.”
King noted the Chicago Fire just went through a similar process to get out of an ironclad lease that required the team to play at SeatGeek Stadium in suburban Bridgeview until 2036.
The Fire agreed to pay $65.5 million to Bridgeview, which used taxpayer money to finance its 20,000-seat stadium that opened in 2006. The team paid the village $10 million upfront, with the rest paid out in various installments through 2036.
Acquiring a site, designing a stadium and building it likely would take at least five years, making a Bears move before 2026 unlikely.
The Tribune analysis found the potential fines if the Bears broke the lease in subsequent years would be $74 million in 2027; $63.8 million in 2028; $53.3 million in 2029; $42.7 million in 2030; $32.1 million in 2031; $21.6 million in 2032; and $11 million in 2033.
“These provisions really contemplate worst-case scenarios,” King said. “We are protecting our clients’ fiscal stability and soundness and doing our due diligence, and the Bears are obligated to pursue all potential possibilities for them.
“I suppose that’s what they’re doing,” he said. “But as far as we know, we’re in business until 2033.”