The financing landscape for sports stadiums and arenas has undergone a fundamental transformation over the past three decades. What was once a model dominated by public subsidies has evolved into a more balanced and sophisticated approach, with public-private partnerships emerging as the preferred structure for creating durable, diversified revenue streams and ensuring public support for large-scale projects. This shift reflects not only changing political attitudes toward stadium subsidies but also a recognition that well-structured partnerships can deliver mutual benefits to teams, municipalities and surrounding communities.
The Evolving Balance of Public and Private Investment
The most striking trend in stadium financing is the dramatic shift in how costs are allocated between public and private sources. According to the authors of Public Policy Toward Professional Sports Stadiums: A Review, the median share of stadium construction costs covered by public spending has fallen from approximately 70% during the 1990-2000 period to roughly 50% in the 2010s and to closer to 40% since 2020. Some of the decrease in the share of public spending can be attributed to a recent trend of private financing, which includes the construction of the $5.5 billion SoFi Stadium that opened in 2020.
However, this evolution should not be viewed as a retreat from public participation but rather as a rebalancing toward structures that align incentives more effectively. Public entities remain essential partners, but their contributions are increasingly structured to generate returns — whether through economic development or community amenities — rather than serving as outright subsidies. The result is a public-private partnership model in which both sides have meaningful skin in the game and shared interests in the facility’s long-term success.
Stadium-As-An-Achor Approach: Entertainment Districts as Revenue Multipliers
Perhaps no trend better exemplifies the modern public-private partnership model than the integration of stadiums into broader entertainment districts. Stadiums are no longer conceived as stand-alone venues but as anchors for comprehensive mixed-use developments featuring hospitality, retail, cultural amenities and social spaces designed to attract visitors well beyond traditional game days.
The stadium-as-an-anchor approach was popularized, in part, by The Star in Frisco, a 91-acre campus featuring the Dallas Cowboys World Headquarters and an indoor athletic training facility that was developed as part of a public-private partnership between Frisco, Texas, the Frisco Independent School District (Frisco ISD) and the Dallas Cowboys. The Star is a $1.5 billion mixed-use development with office, retail, restaurants, a medical center and a hotel supporting the larger campus. The Ford Center at The Star is shared by the Dallas Cowboys and Frisco ISD’s eight high schools and hosts events from high school football games and soccer matches to NFL practice sessions.
This stadium-as-an-anchor approach changes the economics of public participation. When a municipality invests in infrastructure supporting an entertainment district, it is not merely subsidizing a team’s operations, but it catalyzes a broader development ecosystem that generates diversified tax revenues. Hotels, restaurants, retail establishments and residential developments all contribute to tax bases in ways that a stadium alone could not achieve. In addition, the stadium-as-an-anchor or destination approach helps alleviate some of the game day traffic as it provides attendees with entertainment and other options available before and after the venue opens and closes. The result is that public subsidies tend to increase in tandem with the expected economic impacts of these larger district developments.
For teams and facility operators, entertainment district integration provides insulation against the inherent volatility of sports performance. A team’s on-field results will inevitably fluctuate, but a well-designed entertainment district can generate consistent foot traffic and revenues regardless of win-loss records. This diversification makes the overall financing structure more resilient and attractive to public and private participants.
The Atlanta Braves’ Battery Atlanta development exemplifies this model’s cash flow potential. According to the Atlanta Braves’ financial results from the third quarter of 2025, the 75-acre mixed-use development surrounding Truist Park (home of the Atlanta Braves) generated $70.9 million in real estate revenue through the first nine months of 2025, a 44% increase from the prior year, with operating margins approaching 70%. Based on statistics provided by the Atlanta Braves and Cobb County, Georgia, approximately nine million people visited The Battery in 2024, spending an average of three hours on the property, with 74% of visitors from outside the county. Cobb County reported that, in 2024, the stadium and associated taxes generated a $3 million net gain for Cobb County’s General Fund — well beyond the county’s debt service obligations — demonstrating how these arrangements can work for both sides.
Community Benefits Agreements: Expanding the Definition of Partnership
The most innovative public-private partnerships increasingly extend beyond traditional financial arrangements to encompass community benefit agreements, which are contracts between developers and stakeholders setting forth the benefits the community will receive in exchange for public support of the proposed developments. These agreements solidify commitments to local hiring, affordable housing, youth programs and neighborhood improvements, ensuring that stadium development delivers tangible benefits to surrounding communities.
The Jacksonville Jaguars’ recent $1.4 billion stadium renovation is an example of this trend. The project includes a $300 million community benefits agreement, the largest in NFL history, covering workforce development, affordable housing, park improvements and youth sports programs. This substantial commitment, split evenly between Jacksonville, Florida, and the Jaguars, reflects a recognition that long-term community support for stadium projects depends on demonstrable local benefits beyond job creation and economic activity.
Community benefits agreements serve multiple functions within the public-private partnership structure. They provide political sustainability by building constituencies with direct stakes in the project’s success. They address legitimate concerns about displacement and gentrification that often accompany major developments. And they create accountability mechanisms that ensure public benefits are actually delivered rather than merely promised.
From a financing perspective, robust community benefits agreements can strengthen a project’s credit profile by reducing political and regulatory risk. A project with broad community support is less likely to face opposition that could delay construction, complicate permitting or create ongoing operational challenges. The upfront investment in community benefits can thus be understood as a form of risk mitigation that supports the overall financing structure.
Key Takeaways
The evolution of stadium financing toward a more balanced public-private partnership model reflects a growing understanding of how these complex projects can be structured to serve multiple stakeholders effectively. By combining entertainment district integration and meaningful community commitments, modern public-private partnerships can create durable revenue streams that can support facilities and further public support for decades.
For stakeholders advising on stadium transactions, the key insight is that successful partnerships require attention not only to financial engineering but also to the alignment of interests across all participants. The most resilient structures are those in which public entities, private operators, investors and communities all have meaningful stakes in long-term success. When that alignment is achieved, the partnership creates value that exceeds what any single party could generate alone.
McGuireWoods advises teams, investors, developers and municipalities on stadium and arena development, public-private partnerships and complex project financings. For more information, contact the authors, your McGuireWoods contact, or a member of the firm’s Sports and Public Finance teams.