When the Buffalo Bills open their $2.2 billion Highmark Stadium this September, they’ll be opening the NFL’s smallest venue: 60,108 seats, down from the 71,608 the old stadium held. And to make that happen, New York State and Erie County paid $850 million in public funds, resulting in 11,500 fewer seats, with personal seat licenses (the mechanism allowing holders the right to buy season tickets) running as high as $50,000 per seat. Get-in prices on opening night have already listed at $663 on the resale market.
The stadium was built, in significant part, with the money of the fans being priced out of it. New York State contributed $600 million; Erie County contributed $250 million, which collectively is the largest public subsidy ever committed to an NFL facility. But the Bills Mafia’s new stadium isn’t unique in this funding: In deal after deal across American sports, it’s the same playbook in which the public funds a venue, and the owner uses it to serve a wealthier, smaller crowd.
“No one has ever built a new stadium and provided more affordable tickets after that new stadium has opened,” said Victor Matheson, a professor of economics at the College of the Holy Cross who has studied sports subsidies for nearly 30 years. “It’s, in fact, exactly the opposite.”
Individual teams in most leagues don’t have to share revenue from premium seats and luxury boxes with the rest of their league—while TV and merchandise revenue is pooled. That incentive pushes every owner in the same direction: Rip out the cheap seats, build suites, constrain supply, and extract maximum value from the fans with the deepest pockets.
“The money is in super premium experiences, not in actually putting people in the seats,” Matheson told Fortune. “The old model was: Build an 85,000-seat stadium and sell cheap bleacher tickets and hopefully they buy some peanuts and Cracker Jack. That’s not the way anyone sells things anymore.”
“We make stadiums and arenas smaller, but we make them nicer,” Matheson continued. “You tear out a bunch of bleacher seats, and you put in a box with a handful of seats but a super-premium experience, because you can make a lot more money on a few seats to the right people than a lot of seats to the working class.”
The incentive structure reinforces itself: Teams don’t have to share premium revenue with the league, making it the one revenue stream they can maximize entirely on their own terms.
The stadium subsidy race has a direct parallel in the broader economy in terms of cities competing with each other using public money to offer companies better tax incentives and bring their businesses there.
Economists say these cities, already with the structural advantages to win regardless, are essentially throwing money into the void because these companies and stadium owners were always going to pick them. Buffalo was never realistically going to lose the Bills. The $850 million was, in effect, a ransom paid to prevent a departure that was never truly on the table.
Judd Kessler, a professor of business economics at the Wharton School and author of Lucky by Design, said the stadium subsidy dynamic is a hidden market failure at the structural level. When public money builds a venue that an owner then deliberately constrains and ups the amenities and premiums, the taxpayer is funding the creation of a scarcity they will personally be priced out of. When venues price below what the full market would bear, the surplus moves sideways into bots, queues, and resale platforms. And when there, between 25 and 35% gets extracted in fees on every transaction.
“This profit-maximizing concept, when you’re simultaneously asking for handouts from regular taxpayers, is appalling,” Matheson said. “Asking blue-collar workers to pay higher taxes so the wealthy and upper-middle class can go see games in shiny new stadiums is absolutely one of the worst pieces of public policy out there.”
