Dive Brief:
- After an analyst said construction companies see major profit margins from stadium and arena construction, Tutor Perini CEO Ronald Tutor contradicted those claims during a conference call this week.
- "There is no money in the sports," he said. "They track the same level of margin in the 3% to 4% range. So that doesn't make it high margin by any stretch in our book."
- Tutor Perini, one of the nation's largest construction companies, is currently in pursuit of a contract for the hyped but uncertain NFL stadium in Los Angeles, which could eventually be home to as many as two football teams looking to move cities.
Dive Insight:
Stadium construction is a hot-button issue, as it can involve the use of private and public funds. Although a massive new facility often brings the promise of an economic boom for the surrounding area, some studies have contended that isn't always the case.
But team owners and local governments seem undeterred by those reports, as Milwaukee Bucks President Peter Feigin, for example, has promised to start "a transformative economic development project that will help revitalize our community and region," and the Wisconsin State Assembly and Gov. Scott Walker agreed to spend $250 million to help build the basketball team a new stadium.
Although Tutor said that contractors don't see high margins with stadiums, the high-profile projects continue to draw the largest construction companies in the world. Tutor Perini has several stadium projects under its belt, including the Philadelphia Eagles' Lincoln Financial Field and the Chicago White Sox U.S. Cellular Field, according to Business Insider.
Tutor said his company has already created preliminary drawings for a Los Angeles stadium and he believes a decision will be made soon regarding which team can relocate. "My assumption is, as I believe everyone's is, by end of the year January, the NFL will anoint one," he said. However, an NFL owner said the vote could come in March.
