(Bloomberg Opinion) -- I’m from the Village of Arlington Heights, Illinois. I like to call it a village somewhat in jest — it’s a sprawling Chicago suburb of about 75,000 people that boasts, among other things, the nearly century-old Arlington International Racecourse.
That 326-acre site looks increasingly likely to be the future home of the Chicago Bears. Churchill Downs Inc. said this week that it had agreed to sell the property about 30 miles northwest of the city for $197.2 million to the National Football League franchise, with closing expected in late 2022 or early 2023. The Arlington Heights village board, for its part, has already approved zoning that would allow for construction of a football stadium.
Some suspect this is simply a negotiating tactic to extract concessions from Chicago and Mayor Lori Lightfoot, who has said her administration remains committed to finding a way to keep the team in the city. I seriously doubt that’s the case — the Arlington Park property is simply too tempting to pass up. As The Athletic’s Dan Pompei put it, the move could make the Bears “the most valuable sports franchise in the world, or close to it.”
The Bears’ current arrangement is a bit of a mess. Soldier Field has the NFL’s smallest seating capacity at just 61,500. The stadium, the oldest in the NFL, is owned by the Chicago Park District and underwent a renovation in the early 2000s that was widely panned for making it look as if a spaceship landed atop its otherwise neoclassical architecture. It has a scenic perch near Lake Michigan and the city’s museums, but that makes it a long haul for anyone commuting by public transit and limits convenient parking options on gamedays. And while Chicagoans might not expect to watch games from a swimming pool like Jacksonville Jaguars fans, Soldier Field’s amenities are lacking relative to most other stadiums across the country.
A move to Arlington Heights would solve just about all of these issues. The franchise would have full authority over a new stadium, which could hold more fans and offer a better gameday experience, to say nothing of a lucrative deal with a naming sponsor. It would also have the power to develop the surrounding area, which is expected to be turned into an entertainment complex. Arlington Park is conveniently situated off of a major highway, is just a 20-minute drive from O’Hare International Airport, and, crucially, has its own dedicated stop on the Metra commuter rail line. It’s a quicker train ride from downtown Chicago than it is from San Francisco to Levi’s Stadium, home of the 49ers, in Santa Clara.
It doesn’t take much imagination to see how this could cause the franchise’s value to skyrocket. As it stands, Forbes values the Bears at $4.08 billion, seventh highest among NFL teams and 18th in the world. That’s despite the fact that the Bears, which play in the third-largest U.S. metropolitan area, collect a below-average amount of local revenue relative to NFL peers. It would take a $6.5 billion valuation to catch the Dallas Cowboys — a big leap, to be sure, but not out of the realm of possibility with a fresh start. A more modest jump could put the Bears in the same orbit as Real Madrid and the Los Angeles Lakers.
That kind of windfall matters because the current Bears owner, Virginia McCaskey, is nearly 100. The daughter of former coach and owner George Halas might not care about upgrading the franchise’s value and has no intention of selling, but her family reportedly has different plans. Whether they directly oversee the potential Arlington Heights development in the coming years or not, the prospect of a new mega-stadium would obviously boost the team’s sale value.
“Our goal is to chart a path forward that allows our team to thrive on the field, Chicagoland to prosper from this endeavor, and the Bears organization to be ensured a strong future,” Bears President and Chief Executive Officer Ted Phillips said in a statement.
It’s not clear what exactly Chicago can offer to compete with that. The city is grappling with a $733 million budget deficit and already paid hundreds of millions of dollars for the previous renovation. Lightfoot doesn’t have the political capital to offer large incentives to keep the Bears around, which likely explains why the franchise hasn’t bothered to negotiate with her. As Bloomberg News’s Shruti Date Singh reported, the team pays about $6.5 million annually to the park district, which is significant but not enough to make city officials bend to its will. Perhaps the biggest snag in the moving plan is that Bears have a lease that runs through 2033 — Lightfoot has made clear that she won’t let the franchise off the hook if it breaks the contract early.
Thus far, municipal-bond investors are taking the news in stride, judging by trading in debt from Chicago, the Chicago Park District and Arlington Heights and the surrounding suburbs. Combined with the lengthy lease agreement, that further suggests nothing is imminent. “Much work remains to be completed, including working closely with the Village of Arlington Heights and surrounding communities, before we can close on this transaction,” Phillips said.
But make no mistake: All signs point to the Bears eventually making the move to Arlington Heights. The economics make too much sense. It might be a decade or longer from now, but it looks as likely as ever that my village will be the future home of one of the world’s most valuable sports franchises.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.
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