What Happens When A Cash-Poor Billionaire Wants A New Sports Stadium? Lobbying.

The Tennessee Titans turned a couple million in political spending into over a billion dollars from taxpayers.

Image: Drone shot of Nissan Stadium home to the Tennessee Titans football team. Image Credit: John Partipilo

By Adam Friedman [Tennessee Lookout -CC BY-NC-ND 4.0] –

Tennessee Titans CEO Burke Nihill stepped up to the podium on an early May 2022 morning to justify why his team needed, or more likely wanted, a new NFL stadium in downtown Nashville.

For months, Nihill had made the rounds advocating the wonders of a new stadium, claiming it would benefit the taxpayers and community.

As the questions went on, he tried a new tactic, letting it be known the Titans owners — Amy Adams Strunk and her family — weren’t rich enough to pay for a new stadium.

“The family is quite literally putting all of the Adams’ assets in the mix,” Nihill said. “Things that the family has owned for 50 to 60 years. They’re being sold. They’re being liquidated to be able to help pay for this contribution.”

The Adams family is wealthy by almost every standard except one — among sports owners, they rank near the bottom in net worth outside of the team.

In the year after Nihill’s statement, KSA Industries — a company controlled by the Adams family — sold all its stock in Adams Resource and Energy and the real estate beneath its three Texas car dealerships. The moves generated $100-120 million, a drop in the bucket compared to the cost of a new football stadium.

The selling of these personal assets left the Adams family almost two billion dollars shy of the cash needed and limited on options.

So the family turned to a strategy common for Tennessee businesses wanting help with a project. They hired a deep roster of lobbyists to persuade lawmakers to raise taxes and fund their proposal with public dollars that those opposed to the stadium say could have been spent elsewhere.

Tennessee Football Inc., the operators of the Titans and a subsidiary of KSA Industries, has spent at least $1.6 million on lobbying and donations to Tennessee state lawmakers since 2009, according to a database created by the Tennessee Lookout that tracks political spending at the state level. 

Nearly half of the state spending has been spent in the last four years as the team began to ask Tennessee and Metro Nashville lawmakers for more public dollars, culminating in state and local approval of $1.26 billion for its new $2.1 billion stadium. 

The team’s spending was likely higher because of legal loopholes in Nashville and state campaign finance, allowing it to withhold information on its lobbying expense to the Metro Nashville Council and the lobbying firm it hired. 

The Lookout’s database — which links millions of rows of data from state campaign finance and lobby reports — shows that over the past 15 years, 167 companies have spent more than $1 million influencing Tennessee’s politicians. The Titans rank no. 86 on the Lookout’s million dollar list.

The seven-figure mark appears as an inflection point for influence because it demonstrates consistency. 

David Miller, a politics professor at East Tennessee State University, said there’s no “set rule” for the amount of money it takes to exert influence, but year after year spending is more impactful because it establishes a presence, allowing a company to build relationships with lawmakers before making a big ask. 

“You’re able to get more out of your lobbying,” said Miller, whose published work includes studying the influence of interest groups in politics. 

This steady flow of spending in Tennessee politics can be helpful when an organization is trying to secure government contracts, tax breaks, favored regulations, or a large taxpayer-funded sports stadium subsidy. 

Starting in 2019, as the Titans began to ask state and city lawmakers for more money, the team tripled the number of state and city lobbyists it employed and opened a political action committee to legally shower cash on politicians who helped them.

This spending helped the team capture a subsidy potentially worth billions of dollars, including a hotel tax increase previously proposed to fund public transit.  

Metro Nashville Council member Bob Mendes said the Titans deal is partially about opportunity cost because, by raising the hotel tax, they’ve likely closed the door on an increase in it for future public projects.

But, Mendes added, the other part of the deal is how taxpayers inflated the Adams family net worth by hundreds of millions of dollars.

“We signed up to let the team administer tax money for future improvements,” said Mendes. “Fifteen to 20 years from now, we’re gonna find out that there’s been a billion dollars worth of improvements all or almost all funded by tax dollars.”

“We’ll pay for this round, and we’ll pay for the next round. All while the team’s net worth will have gone up by a ton.”

The Titans and their ownership group are notoriously tight-lipped, with Nihil making public comments on behalf of the team during the stadium approval process. Adams Strunk gave no interviews and made no public statements. 

The Lookout reached out to representatives with the Titans, sending them a list of questions related to this story, but they declined to comment.

The strategy behind the stadium deal

For more than a decade, the Titans employed a small team of lobbyists from law firms Lyell Law and Waller Lansden Dortch & Davis (often called, and hereafter referred to, as Waller, and now owned by Holland Knight).

The Titans shifted from this strategy in 2019 as they began to convince state and city lawmakers to pass a series of laws for the team’s financial benefit. 

First, the Titans increased average state political spending from around $80,000 annually to $190,000, including hosting a $46,000 event to sway lawmakers. The team launched a political action committee (“PAC”) donating $42,250 to state and metro politicians who helped pass the favorable legislation.  

Finally, the team nearly tripled its number of lobbyists as they began to ask officials for even more money.

The team added Waller lobbyist Nicole Osborne Watson in 2019, two years after her husband, Sen. Bo Watson, R-Hixson, took chairmanship on the powerful Senate Finance Ways and Means Committee.

Osborne Watson declined to comment, but Sen. Watson said he “strictly” follows Tennessee’s disclosure laws and Senate rules “pertaining to any personal interest in a bill.”

When the Titans asked lawmakers for a $500 million bond in 2022 and the Metro Nashville Council for $760 million, the team brought in more lobbyists from Waller and new ones from C5 Strategies, Jigsaw, Lane Government Relations, the Maynard Group and 353 Media Group.

James Strickland, a political science professor at Arizona State University, said the number of lobbyist can significantly help, especially if they’re the ones with the best connections.

“A lot of lobbying is about long-term relationships where they can get meetings more easily on a repeated basis with lawmakers,” said Strickland, whose research focuses on legislatures and state politics.

The first piece to the stadium funding puzzle was securing money from the state, where the team’s 15 lobbyists tried to win over skepticism from some members of the Republican supermajority, particularly in the Senate where the deal faced a narrow passage.

“I have not found any support for it in my district or throughout the state,” said Sen. Janice Bowling, R-Tullahoma, when the bill was brought to the Senate floor in April 2022.

Bowling, along with 12 other Senate Republicans, voted against the deal. This meant the Titans needed at least two votes from Senate Democrats and couldn’t afford to lose many Republicans.

Sen. Watson told the Chattanooga Times Free Press in May 2022 that he initially opposed the Titans funding, but voted for it in the end because the House approved the money and he didn’t want to vote against the entire budget.

Senate Majority Leader Jack Johnson also initially opposed the deal, even advocating for the Titans money to be removed from the budget so there could be a standalone vote. Johnson faced a primary challenge later that summer from a Republican adamantly opposed to the stadium.

But, when the deal came before the Senate in April 2022 Watson, Johnson and four Democrats — Nashville Sens. Heidi Campbell and Jeff Yarbro, and Memphis Sens. Raumesh Akbari and Sara Kyle — helped pass the deal passed in an 18-13 Senate vote. In the state House, the Titans stadium funds had an easier passage of 71-19.

Efforts then shifted to the Metro Nashville Council, where the team hired an additional four lobbyists to push back as opponents tried to change the terms of the deal they viewed as unfavorable to taxpayers.

“How do we, as everyday people compete with that?” said Sen. Charlane Oliver, D-Nashville.

Oliver was not elected to the state Senate until after the stadium vote but has been a fixture in Nashville politics for years, opposing the deal as a nonprofit executive before her political career.

“There are people who are unelected in this city who reap the benefits of not having to be elected but have all the power to change the trajectory of this city,” she said.

One of them is Waller’s James Weaver, considered by many to be the most influential lobbyist to the Metro Council.

Weaver wielded his influence in many ways, including during a critical council vote on the stadium. Chaos ensued on the council floor after the stadium opponents passed an amendment to the deal.

Sitting in the council audience at the time, Weaver picked up his phone using voice-to-text, where audience members could hear him say “now you ask for the deferral.”

Within minutes of this message, a council member asked for a deferral vote delaying the deal, allowing Weaver and the others time to kill the opponents’ amendment.

Weaver declined to answer any questions related to his lobbying activities, citing an ethical obligation preventing him from talking without permission from the Titans.

The public might never know how much the Titans spent on lobbying

The full extent of the team’s political spending is likely unknown because of loopholes in city disclosure requirements, allowing companies to hide the size of their spending.

The Titans and Waller heavily lobbied the Metro Nashville Council and Mayor John Cooper for years over various aspects of the stadium deal.

But, the cost of the local lobbying doesn’t have to be reported and therefore is unknown.

At the state level, the Titans had to declare their lobbying expenses and donations. But, state laws also allow Waller as a firm to legally make donations.

Waller employees lobby for various companies, but the firm also runs a political action committee that donated $687,000 to state lawmakers since 2009.

State law prevents a company that hired Waller to specifically dictate the firm’s political donations. But more than 90% of the money raised for the Waller Landsen PAC is from the firm itself. This allows for the mixing of money because Waller PAC donations come from the firm’s revenue, which comes from the firm’s clients.

“All of the government relations professionals at our law firm have been and remain in compliance with the state and local regulations and laws that govern advocacy related to their work on behalf of the firm’s clients,” Weaver said in a statement on behalf of the firm.

Waller isn’t the only group to exploit this loophole, as several other Tennessee lobbying firms run PACs using a similar system.

But Waller’s spending does have a pattern. Most of the money the firm gives at the state level is to politicians with leadership positions from both parties, except for Rep. Gary Hicks, R-Rogersville.

Despite not serving as chairman of any committee or in House leadership, Hicks has received $22,000 from the Waller PAC since his election in 2016 – the second most of any House member and ahead of House Speaker Cameron Sexton, R-Crossville.

Hicks is the chair of House Finance Ways and Means subcommittee.

These donations coincide with Hicks sponsoring legislation creating a sales tax capture district for the Titans and co-sponsoring the bill that gave the team the $500 million from the state.

The Lookout made several attempts to reach Hicks, including emailing, calling and reaching out through a Tennessee House Republican spokesperson. Hicks didn’t respond to any of these requests.

The Adams family’s wealth is all tied up in the team

The Adams family has owned the Titans since its inception as the Houston Oilers in 1959. Kenneth S. “Bud” Adams Jr. used $25,000 from his oil drilling and transportation business — what would become Adams Resource and Energy — to start the team.

Over the years, Bud Adams diversified his assets all under the umbrella of KSA Industries. The parent company owned the team; its Adams Resource and Energy stock; various real estate in Texas, including three car dealerships in the Houston area; Bud Adams Ranches in St. Lucie, Fla.; and 50% of River Garden Farms Company in Woodland, Calif.

By the time of Bud Adams’ death in 2013, the Titans’ value had increased to over $1 billion, while his other assets didn’t improve with the same upward velocity.

His estate left one-third of KSA Industries to his daughters, Amy Strunk Adams and Susie Adams Smith, and the remaining third to his son’s widow, Susan Lewis, and their children Kenneth Adams, IV and Barclay Adams.

Adams Smith initially took the controlling stake in the Titans, but after two years, the family ousted her and installed Strunk Adams as the controlling owner. By this point, the Titans were generating hundreds of millions of dollars in revenue for the family, significantly more than the other assets.

The change in Titans leadership factored into the families’ finances when, in 2020, Strunk Adams and the other heirs bought out Adams Smith for between $500-$550 million, according to the Nashville Business Journal.

Around this time, the team was trying to close on a $600 million remodel of Nissan Stadium, which included a $300 million taxpayer subsidy from Metro Nashville to build a roof over the current structure.

Between 2021 and 2022, the team shifted its position, realizing it wanted a new stadium, not a remodel. Officially, the team and Mayor Cooper’s office told the public it was because the remodeling cost was nearly as expensive as building a new facility. But, experts dispute these claims because other football teams renovated stadiums built in the same era as the current Nashville facility in recent years for substantially less than the new project’s cost.

J.C. Bradbury, an economics professor at Kennesaw State University, said a new facility versus a remodeled one was likely to provide the team a stronger “novelty effect,” enhancing its short-term revenue and team value.

“Twenty to 30 years ago, it was popular to have luxury boxes that were way up high,” he said. “People say now, ‘I want to sit close to the game,’ but you can’t just move those luxury boxes down there. So when you build a new stadium, you build the new luxury boxes closer.”

By building a new enclosed stadium, the team can increase its revenue from NFL games and other events. The current open-air stadium limits its hosting abilities, such as when rain canceled a Garth Brooks show in May 2021.

“You personally make a lot more money,” Bradbury said, “especially when these revenue streams are not connected to NFL revenue sharing.”

The NFL requires ticket sales for each game to be split, with 60% going to the home team and 40% to the visitors. Concerts, luxury boxes and other non-NFL-related events don’t fall under this split.

But a new stadium presented a financial challenge for the team. Unlike owners in New York or Los Angeles, the Adams family didn’t have access to the billions of dollars needed to finance it privately.

The Adams family conveyed this message to lawmakers when asking for money.

House Speaker Cameron Sexton told an East Tennessee radio station in April 2022 he supported the deal because the Adams family was “liquidating everything they have ” to come up with their contribution to the stadium.

Those transactions, along with an NFL loan and projected revenue from personal seat licenses, brought the team’s financing to $840 million, well below the project’s total cost – meaning it needed city and state taxpayers to fund the rest.

Donations, donations and more donations

Securing taxpayer money for a new stadium started at the state level with Gov. Bill Lee, Senate and House leaders.

Lee introduced the $500 million in state funding as part of his budget amendment in March 2022. Sexton, Lt. Gov. Randy McNally, R-Oak Ridge, and the Nashville Democratic delegation all signaled their support for the deal shortly after.

The deal also required lawmakers to agree to raise the hotel-motel tax by 1%. In 2018, this same increase was proposed as part of a deal to expand public transit in Nashville, which failed at the ballot box. Yarbro and the late Rep. Bill Beck, D-Nashville, sponsored the stadium-tied tax increase.

All except Beck are among the top recipients in donations received from the Titans, Wallers and Jigsaw (one of the other firms hired by the team) political action committees.

After passage at the state level, the debate for a new stadium moved to the Metro Nashville Council, where Mayor Cooper ended up championing the deal, seeing it as a way to develop the East Bank, a legacy goal after he chose not to run for re-election.

Helping the deal was the groundwork laid by Waller, which has given current Metro Council members around $91,500 since 2009, including $75,300 to those who favored the deal in the years leading up to the stadium’s approval.

Together, Cooper’s office, those council members and the team’s hired lobbyists fought back several attempts that would have made the deal “less favorable” for the team. The stadium deal was ultimately approved in April 2023.

One of those attempts was by council member Mendes to ban gambling around the stadium.

Mendes said while gambling might not be legal now, the team’s ability to lobby lawmakers shows the legislature could allow it any time in the future.

“There are five acres immediately next to the stadium, and nobody could ever say what would be built there,” Mendes said. “I’m pretty sure I know what’s going to be built there. When the state approves gambling, that’s the gambling facility.”