Scott Ball / Rivard Report
When the San Antonio Commanders kick off their inaugural season in the Alamodome on Saturday, they will be just the third current regular tenant for a building that has not turned a profit in 17 years, even as the City of San Antonio pumps millions into it for renovations.
The City has finalized a lease agreement at the Alamodome with the Alliance of American Football, the fledgling eight-team pro football league, allowing the Commanders to play at least five games there each season. The agreement is for three years with an option for an additional three years, said Patricia Muzquiz Cantor, director of the City’s Convention and Sports Facilities Department.
“It’s a good contract for us,” she said.
The AAF team joins the Alamo Bowl and San Antonio Sports, a nonprofit organization that stages sporting events throughout the year, including the men’s and women’s Final Four tournaments, as the Alamodome’s only paying tenants. While the University of Texas at San Antonio plays its home football games in the stadium, it does not pay rent to the City. It pays only for stadium expenses such as security, staffing, and other operational costs on game days.
It remains to be seen how much the Commanders making the Alamodome their home will impact the stadium’s bottom line. If the league proves successful where other spring football leagues have failed, the City will consider it a good return on its recent investments, even though those investments were made to attract the NCAA men’s Final Four and not a new football team.
If the Commanders attract large crowds, the revenue generated from concessions and parking could be enough to push the Alamodome closer to a balanced budget or even to profitability, Muzquiz Cantor said. If the new team generates less interest and smaller crowds, the impact to the stadium’s bottom line will be much less significant.
Muzquiz Cantor said the AAF will pay full rent of $50,000 per game for the Alamodome, along with all expenses associated with stadium operations on game days. The league will keep any revenue it makes from merchandise sales, sponsorships, and temporary signage.
The City Attorney’s Office declined to provide a copy of the contract to the Rivard Report, citing a league request that it be kept private because the AAF is still negotiating stadium deals with other cities in the league.
The Alamodome, which opened May 15, 1993, had expenses of more than $14 million for the 2018 fiscal year – a year in which it played host to the men’s Final Four – but took in just under $12 million in revenue, creating a shortfall of $2.5 million. The stadium also had shortfalls of $446,645 in 2017 and $1,203,662 in 2016, according to financial records obtained by the Rivard Report.
Muzquiz Cantor said the last time the Alamodome turned a profit was in 2002, the last year the San Antonio Spurs played their home games there. The Spurs moved to the AT&T Center for the 2002-03 season and the Alamodome has needed subsidies to balance its budget each year since, Muzquiz Cantor said.
The Alamodome is not alone in needing those subsidies. The Henry B. González Convention Center also receives subsidies annually to pay some of its bills. Muzquiz Cantor has overseen both facilities for less than a year and said the two facilities combined to bring in $32.7 million in fiscal year 2018 but needed an additional $15.8 million to cover expenses.
A significant contributor to that shortfall is the debt service on both buildings, each of which has undergone major renovations in recent years. Muzquiz Cantor said the additional money to cover the shortfalls comes from the city’s hotel occupancy tax.
David Bojanic, a professor in tourism management at UTSA, said convention centers and municipally owned stadiums such as the Alamodome often require subsidies from the cities in which they are located.
“It’s fairly common in big cities,” Bojanic said. “I know San Diego had trouble getting a new convention center or a new stadium because the citizens said, ‘No, we don’t want to pay for it.’ You’re seeing more pushback from local residents about that because they do take it out of taxes that could be used for other things.”
Adie Tomer, a fellow at the Brookings Institution Metropolitan Policy Program, agreed that facilities such as stadiums and convention centers in large cities often are subsidized, saying it is up to those cities to determine whether it is appropriate or not to do so.
“These are cultural institutions, so the question is as much about local framing,” Tomer said. “Should we expect these physical assets to make a financial profit if we also hope for them to deliver cultural and social returns? That’s up for debate. But if elected officials market the assets as revenue-generators, they can box themselves in to unrealistic expectations.”
Such expectations were on view last year in the lead-up to the Final Four held at the Alamodome in March. City officials routinely pointed to a study they commissioned prepared by Steven Nivin, chief economist of the SABÉR Research Institute. The study estimated the local economic impact of hosting the Final Four at $185 million.
Hosting the Final Four also led to the City spending $65.5 million on major stadium renovations that were completed early last year. There is still more than $30 million in debt service to be paid on those renovations, Muzquiz Cantor said, but the improvements also helped the city land the 2021 women’s Final Four and the 2025 men’s Final Four. More renovations will be needed before the men’s Final Four returns again.
Seventy-six full-time employees work at the Alamodome. Although concessions workers, ushers, and ticket takers are generally subcontractors who are not full time, personnel costs are one of the building’s largest expenses along with utilities, according to the building’s revenue and expense reports.
For example, in fiscal year 2018, the Alamodome spent more than $4 million on employee- and subcontractor-related expenses and another $1.7 million on chilled water, which cools the building when it’s hot outside.
Muzquiz Cantor said the Alamodome is important to San Antonio because it provides a place where groups from all over the city can hold events such as high school football, basketball, and marching band competitions. It’s also a place where high school and college graduations are routinely held.
The stadium is in use for events an average of 110-120 days per year. Muzquiz Cantor said each of those events produces revenue.
Muzquiz Cantor said she would like to see more events at the Alamodome.
“That’s really one of my goals for 2019 – to be able to increase the number and the quality of events in order to increase revenue at the Alamodome and shorten the supplementation that is happening,” she said.