Bud Adams

We’ve seen a bunch of examples of NFL teams relocating throughout the past few decades, and it’s almost always the same story: the owner wants public funding to replace an aging stadium, the local government doesn’t want to give it to them, so the owner instead relocates to a new city that will spend public money to build a new stadium for the team. This makes sense from an immediate cost perspective: stadiums are expensive, and owners want their team to turn a profit, so they would want the local government to cover as much of that cost as possible even if it means relocating to a less desirable market. However, the home market that a team plays in can have a major effect on the franchise’s value, which is the most valuable asset an owner has. A drop in franchise value due to relocation can outpace the cost of privately funding a new stadium by a significant margin, and there is no better example of this than the relocation of the Houston Oilers to Nashville.

In the mid-90s, the Astrodome was aging badly and was one of the worst stadiums in the NFL. Oilers owner Bud Adams had secured some renovations to the Astrodome in the 1980s, but he soon threatened to leave Houston unless the Oilers got a brand-new arena which he would only pay for 25% of. Giving so much money to the Oilers so soon after the renovations was politically unpopular in Houston, so the city government refused to give Adams what he wanted. Adams then came to an agreement with the city of Nashville to move the team there and build a new stadium for them with significant public funds.

The relocation itself was handled terribly. Adams announced the Oilers would be moving to Nashville for the 1998 season before the 1996 season even kicked off, causing local support to dry up almost immediately and the Oilers to do abysmal gates in 1996. Adams decided to move the team a year early, but what would become Nissan Stadium would not be ready until 1999, so the Oilers had to play in temporary venues for the next two seasons. No stadiums in the Nashville area appealed to Adams, so he instead picked the Liberty Bowl in Memphis which had a large seating capacity and luxury boxes unlike any stadium in the Nashville area. The problem was that Memphis was too far from Nashville for fans to make the trip, and Memphis locals didn’t want to support a team that wasn’t theirs, so gates were once again terrible and when they did sell well most fans were cheering for the visitors. In 1998 Adams moved the team to the smaller Vanderbilt Stadium in Nashville which also wasn’t ideal. The team’s marketing in Nashville was stymied by the Memphis debacle and by the decision to first hold onto the Oilers name before changing course abruptly and rebranding as the Titans. Meanwhile, the NFL was bringing football back to Houston by announcing that Houston would get an expansion franchise called the Texans with a brand-new stadium just as Adams had wanted.

Because of the Texans being created, and because the Titans and Texans are similar in terms of history, on-field success, and the lack of a large national following outside of their home markets, the difference in franchise values can be attributed almost exclusively to the difference in playing in the Houston vs. Nashville markets. That difference is highly significant: the Texans are one of the NFL’s more valuable franchises at $4.7 billion in 2022 according to Forbes, while the Titans are one of the leagues least valuable with a 2022 franchise value of $3.5 billion, more than a billion dollar difference. The total cost to build the Texans new stadium was $352 million, about $623 million in 2023 dollars, while the costs of Nissan Stadium not covered by public funds were $146 million or about $275 million in 2023 dollars. The Titans also have some value still from continuing to hold the rights to the Oilers name and selling Oilers merchandise that the Texans don’t have, and they had to pay a $28 million ($53 million in 2023 dollars) relocation fee to move the team, so all told it’s not an exaggeration to say that in the long term the family of Bud Adams is now about a billion dollars less wealthy than they would have been if Adams had decided to privately fund a new stadium to keep his team in Houston instead of relocating to Nashville.

Obviously not all relocations are this clear-cut successes or failures, but this example shows the potential pitfalls of placing short-term savings over maximizing long-term value. The Oilers/Titans example should give owners pause to rush to relocation instead of privately funding a stadium if the team’s new market is significantly less valuable than its current one, even with a good deal for public funding. Likewise, this example should also give larger markets reason to avoid giving large amounts of public money to keep a team, since in many cases the value of staying in the market should long-term overcome the value of getting public funding for a new stadium. It’s not surprising given his mishandling of the team’s relocation that Bud Adams was generally bad at taking a long-term view at his business, but others should use his example to avoid making the same mistake.

Everyone knows the story of how art modell screwed over the browns. The same thing with the irsays loading up the moving vans and skipping town in the middle of the night. But it seems that Bud Adams never gets criticized on this sub for running the oilers into the ground, then moving them from Houston. Was it just overshadowed by the Cleveland move happening around the same time?

As you may know, Bud Adams has passed away. This is the place to discuss and share your feelings - good or bad - towards the man.

All these years I thought I was a Titans fan originally cause I thought they looked the coolest. Turns out it was fate. Rock Chalk!

I was reading this article from 2011.. (This is the most recent source I could find, it still might be ongoing)

And this bit caught my attention.

...Each of those figures includes about $40 million the county still owes on debt it accrued making renovations to the facility in the 1980s at the request of the Houston Oilers, who have played in Tennessee for the last 15 years.....

I never realized with all the hubbub dealing with what should be done with the Astrodome (the main topic of the linked article) that we still owed money (as of 2011) on the renovations Adams demanded a decade before the move...