Will Broncos build NFL's next splashy stadium? For owner-to-be Rob Walton, venue issue looms large
Rob Walton could take a page from Rams owner Stan Kroenke, his cousin by marriage, by investing big in a new stadium for the Broncos. But there are several factors at play.
DENVER – The Denver Broncos are pulling a Los Angeles double this fall, traveling to the city to play at SoFi Stadium twice.
Perhaps the trips in October to face the Chargers and on Christmas Day to take on the Rams will give the franchise’s new ownership group some grand, stadium-related ideas.
Not that Walmart heir Rob Walton and company, who have agreed to buy the Broncos pending league approval, haven’t already had that opportunity. Rams owner Stan Kroenke is married to Walton's cousin, Ann Walton Kroenke.
That’s just one of the reasons Kroenke’s $5.5 billion project on the West Coast could factor into the Walton-Penner ownership group’s thinking once its formally in charge in Denver.
“You look what the Rams did, building a new stadium and all those things,” Broncos left tackle Garett Bolles said while discussing the new ownership group this week. “I’m not quite sure what (the Walton-Penner group’s) plans are, but I know they have exciting plans. You could tell just with the message he shared, just how excited Mr. Walton is.”
The stadium situation is likely to be a point of focus early on here. Broncos CEO Joe Ellis, one of three trustees who guided the Patrick D. Bowlen Trust through the selling process, said earlier this year that making decisions on Denver’s existing stadium, Empower Field at Mile High, will likely rank at the top of a new owner’s priority list.
“I think it’s a challenge and something you do have to look at right away if you’re the new owner, for sure,” Ellis told reporters at the league meetings in Florida back in March. “It’ll be very interesting, but from a big-picture business perspective, that will be No. 1 on the next owner’s plate.”
Empower Field was built in 2001 at a cost of around $450 million. Since then, about half of the league’s franchises have opened new stadiums and several others have done major renovation projects. Ellis said this spring that while the Broncos’ facility is in “good shape,” it will also require, “significant upgrades that need to be done and can be done to improve it and keep up with many of the others around the league.
“Will it ever be SoFi or Allegiant (Stadium in Las Vegas)? Probably not,” he added. “So that’s something a new owner has to look at. But there are all kinds of things that go into evaluating a new stadium and one of them, the most important, is how much is it going to cost and what does my investment mean in terms of return when I do that?”
Given the family relations, the state of the stadium in Denver and the fact that division rivals play in the two venues Ellis happened to reference, it would hardly constitute a surprise if the Walton group solicits advice from Kroenke. Not only did he pay for the cost of building SoFi Stadium, but he is also putting substantial resources into developing the area around the building, too, following a trend in professional sports.
“So from the stadium perceptive, in some regards, yes, it’s a crown jewel given L.A.’s market demographics, they serve that high-end demographic really well and they’re able to really kind of monetize the elite crowd here in L.A., but I think the real revenue generation is in the surrounding developments that I believe will open pretty soon,” said Edwin Draughan, a vice president at Park Lane Bank, an investment bank that works extensively in the sports market. “Retail, housing, etc. That ancillary revenue, that’s revenue generation 24/7/365, unlike the stadium, which again, you only have nine, 10 games if you’re lucky.
“That’s where the real revenue and appreciation comes into play.”
Franchises across sports have made these types of plays in all kinds of situations. The Atlanta Braves moved to the suburbs in order to build a new stadium and develop around it. The Milwaukee Bucks built a new arena directly adjacent to their old building downtown and developed the Deer District around it. The Green Bay Packers renovated Lambeau Field and developed extensively around it. The Golden State Warriors checked a whole host of boxes, moving into a new, downtown building across the bay from Oakland in San Francisco and adding around the building itself.
Franchise owners, naturally, are not undertaking massive development projects around their stadiums and arenas just for kicks.
“That’s the next step outside of just team appreciation, is to leverage that team to develop real estate, own said real estate and then bring more attention to that real estate because of your team,” Draughan said. “That’s how you really kind of unlock the value of sports team ownership.”
In Denver, the Walton-Penner group will have options. There is an existing Stadium District Master Plan that covers the area directly south of Empower Field, including parking lots and some surrounding area, that could be the avenue to either redevelopment or a full rebuild downtown. The franchise’s headquarters are in Englewood in the southeast part of the metropolitan area.
Ellis called the area around the current stadium “a tremendous real estate opportunity … to move forward and do a significant mixed development of office, retail, housing, possibly a hotel, maybe some small entertainment venue stuff, things along those lines that can really bring some vibrancy to that area.”
It's unclear exactly how much work the new Walton-Penner group has done in figuring out what direction to go, but once the sale is approved by the league’s ownership group, they’ll be properly armed to hit the ground running. Walton, according to Forbes, is worth in the neighborhood of $60 billion, nearly six times Kroenke’s estimated fortune and four times any other NFL owner.
“Similar to (former Microsoft executive Steve) Ballmer when he bought the (NBA’s Los Angeles) Clippers,” Draughan said, referencing the only American sports owner wealthier than Walton. “He wanted it and he decided he’ll figure everything out later.
“There’s not much that excess capital can’t solve in some way, shape or form.”
Follow USA TODAY Sports' Parker Gabriel on Twitter @ParkerJGabriel.