Dolphins’ stadium revenues spike due to renovations
7 November 2016
More than 65,000 aqua and orange-clad Dolphins fans drove home happy Sunday after Miami’s thrilling victory over the Jets.
Stephen Ross, the team’s owner, has to be happy too — with how his team is performing both on the field and at the gate.
Revenues at the stadium now known as Hard Rock were up 11 percent in the 2015 fiscal year, a sign that Ross’ half-billion dollar investment is already paying dividends.
That’s according to Fitch Ratings, a Big Three credit rating agency that recently announced that it has affirmed South Florida Stadium LLC’s BBB (“investment grade”) credit rating.
The affirmation “reflects Hard Rock Stadium’s status as a premier venue in South Florida and host to the ... Miami Dolphins, the core anchor tenant at the facility since 1987, and also the strong ownership commitment to the franchise and the stadium.”
The stadium’s strengths are offset, Fitch continued, to some degree by the variable rate on moneys borrowed by Ross and a high leverage structure, compared to other stand-alone stadium facilities.
But the big takeaway: The stadium is making appreciably more money with some 10,000 fewer seats, suggesting the team is cashing in on its luxury products like Hard Rock’s living room boxes and posh 72 Club.
And that growth should only continue in the years to come. Fitch’s 2015 assessment did not include the team’s 18-year, $250 million naming rights agreement with Hard Rock.
Plus, construction over the last two years has eliminated many of the non-football events that the Dolphins plan to host going forward. That will change next year, as evidenced by the Coldplay concert scheduled for Hard Rock in August 2017.
So there will be plenty of revenue to service a debt that’s nearly $300 million, including bonds that predate the three-year renovation project. Of the $500 million tab, $350 million came from Ross’ coffers, $100 million was borrowed and another $50 million from the NFL’s G-4 program. Fitch expects Ross to cover any construction overruns.
One additional point in the report: the Dolphins are defendants in a lawsuit “related to the steel works associated with the renovation project.” The Miami Herald has learned that this refers to a dispute with a vendor over the cost of steel purchased by Ross for the erection of the stadium’s shade canopy.