Is the Parking Lot Worth More Than the Stadium?

Here’s a question few university presidents or athletic directors would have asked a decade ago: Is the parking lot outside your football stadium more valuable than the stadium itself?  

At first glance, the question seems ridiculous. The stadium is where games are played. It’s where fans gather, donors engage, recruits visit, sponsors activate, and memories are made. The parking lot simply supports the event. 

Today, professional sports organizations are increasingly viewing their venues differently. I can’t tell you how many times I’ve heard reference to, “what the Atlanta Braves have done,” in the past month. The stadium itself is no longer the sole source of value; instead, it has become a catalyst for demand for everything built around it. The game draws people in, but the surrounding ecosystem is where long-term value is increasingly created.  

The Stadium Is No Longer the Whole Business 

College athletics may be approaching the same strategic inflection point. Over the past several years, the conversation around commercialization in college athletics has focused primarily on new revenue streams: premium seating, sponsorships, media rights, fundraising, etc. Those conversations are important, but they have largely assumed the business of athletics happens inside the stadium gates.  

What if that were no longer true? 

Across the country, institutions are beginning to explore mixed-use developments and entertainment districts with retail, restaurants, hotels, and more adjacent to athletics facilities. While each project looks different, they all reflect the same underlying realization: athletics can generate revenue while also generating demand. And demand has value far beyond ticket sales. 

Unlike professional sports franchises that may host only a handful of home games each season, universities are year-round destinations. NFL teams play eight or nine home games. Universities have students, faculty, staff, alumni, visitors, camps, graduations, conferences, concerts, and community events every single week. They anchor communities 365 days a year. That is a competitive advantage. Athletics also amplifies the flow of traffic by giving people a reason to gather, celebrate, return, and invest emotionally in the institution. That’s why I think it’s helpful to stop viewing athletics solely as a revenue-generating cost center and begin viewing it as one of the university’s most powerful demand generators. And the need to diversify revenue isn’t unique to athletics. The broader campus faces many of the same pressures, making these projects potentially valuable to both athletics and the institution. 

Athletics leaders have been beating the “value drum” for decades but quantifying the value their programs create for the broader institution has been a struggle. Everyone intuitively understands that successful athletics drives enrollment applications, strengthens alumni engagement, enhances national brand visibility, and contributes to the local economy. Yet those benefits have often been described qualitatively rather than measured strategically. Entertainment districts and adjacent commercial development may finally give universities a more tangible way to tell that story.  

In many ways, the stadium has the potential to become the anchor tenant for a much larger commercial ecosystem. A recent legal dispute involving Mark Cuban and the Dallas Mavericks illustrates how this thinking has evolved in professional sports. While the specific facts involve private ownership and therefore aren’t directly comparable to a public university, the underlying issue is telling. The disagreement extends well beyond basketball, raising a broader question about who participates in the long-term value created by the development surrounding the arena. 

Universities aren’t asking who owns the team. But this question is relevant: If athletics creates the demand, who should capture the value? That answer will look different at every institution. But regardless of the model, every institution should shift its thinking about athletics facilities from destinations to platforms that create demand for everything around them. Perhaps the most valuable asset wasn’t the stadium all along. Perhaps it was everything the stadium made possible. 

Four Ways to Own the Opportunity 

So back to the question: If athletics creates the demand, who captures the value? The answer depends on how the project is financed and structured. Universities often compare financing alternatives based on interest rates, cost of capital, or construction risk. Those factors matter, but they may not be the most important consideration. The financing model also determines who captures the long-term value athletics creates. Every financing decision is, in many ways, an ownership decision. It influences who controls future appreciation, who benefits from expanding commercial activity, and who has the flexibility to adapt as new opportunities emerge. 

There are at least four potential paths, each with different implications for ownership, risk, control, and long-term value. 

Option 1: University Debt (Bond Financed) 

This is the traditional higher education approach. The university (or affiliated entity) issues debt, owns the project, and retains virtually all of the upside. If the district succeeds, appreciation belongs to the university, and operating flexibility stays with the university. Essentially, you’re betting on yourself. The university also owns the risk. If occupancy fails, if retail struggles, if construction costs explode, that’s the institution’s problem. It could also consume debt capacity – every dollar borrowed for an entertainment district is a dollar unavailable somewhere else. 

Option 2: Public-Private Partnerships (P3s) 

This is probably where most schools are heading. Instead of building it themselves, institutions consider who the best partner is to build it. Private developers bring capital, development expertise, leasing experience, operating experience, and speed. The university contributes land, demand, brand, and location. Each contributes something the other lacks. It’s also less risk for the university. But here’s what you need to understand: who owns the upside, who controls it, and for how long? Who benefits if the district doubles in value, if rents increase, if Phase II becomes possible? The allocation of future value depends on how the deal is structured. Also, deal terms can vary significantly, from periods that align more closely with the underlying debt terms to arrangements that extend 75 years or longer. 

Option 3: Private Capital Investment 

People often use “P3” and “private capital” interchangeably when they’re not the same thing. P3 is a partnership structure. Private capital is a funding source. Those can overlap, but they don’t have to.  

Unlike a traditional P3, the university’s partner is the capital provider, not the developer. The capital provider may hire the developer, while its expertise lies in allocating capital rather than developing real estate. In many cases, universities may see a combination of both as a three-legged stool where the university, developer, and capital provider each contribute something different to the project. Like a P3, deal terms and structures can vary significantly, and the addition of a capital provider introduces another party with its own economics, objectives, rights, and expectations that have to be considered. 

Option 4: Philanthropy 

Traditionally, philanthropy has built stadiums, arenas, practice facilities, and locker rooms. Those gifts have shaped the physical landscape of college athletics for generations. But as athletics becomes increasingly commercial, should philanthropy continue to fund facilities, or could it also help fund the commercial ecosystem that surrounds those facilities?  

At first glance, the idea seems counterintuitive. Donors typically give to advance the university’s mission, not to maximize their own financial returns. Yet today’s environment looks very different than it did even five years ago. Many donors are already directing significant resources toward athlete revenue sharing, NIL initiatives, or annual operating support. That raises an interesting question. If a donor is willing to fund this year’s roster, would they also be willing to help create an asset designed to generate recurring revenue for future rosters? Could funding a revenue-producing asset ultimately create a more sustainable source of support than funding annual operating needs? 

But is this truly charitable giving? Perhaps this is where “friendly capital” enters the conversation. Boosters may be willing to accept different economics than a traditional investor because their return isn’t measured solely in dollars. Legacy, institutional impact, and competitive success may also influence how they define value. That could create opportunities for new forms of capital that sit somewhere between philanthropy and private capital.  

Not Every Campus Has the Same Opportunity 

Urban Universities: Competing for Attention 

Urban institutions often operate within an already vibrant commercial environment and compete with neighboring professional franchises, entertainment venues, and established retail districts. The opportunity is to become a stronger anchor within an existing ecosystem. Development strategies may focus on mixed-use projects, corporate partnerships, transit-oriented development, or activating underutilized campus property in ways that complement the surrounding city.  

Traditional College Towns: The Primary Economic Engine 

In many college towns, the university is the community’s defining institution, and athletics is often its most visible commercial catalyst. Football weekends fill hotels, restaurants, and retail stores. Local businesses schedule staffing around athletic calendars because the impact is so significant. In these markets, the opportunity is to capture more of the value that athletics is already creating. Universities may begin asking whether more of that economic activity should occur on or adjacent to university-controlled property through hotels, restaurants, retail space, and hospitality venues.  

Land Grant Universities: Leveraging Scale and Place 

Land grant institutions introduce another dynamic entirely. Many have something neither urban campuses nor traditional college towns possess: land. Significant land holdings provide flexibility that other institutions simply don’t have. The opportunity is to determine the highest and best use of strategically located property surrounding athletics facilities. An entertainment district may be only one piece of a much broader vision. Development could include student housing, research parks, conference facilities, or healthcare alongside athletics. Athletics becomes one of several anchors that activate the campus and attract visitors, talent, and investment. However, where land is publicly owned or subject to broader oversight, there may be value in staking a claim to its strategic use early. Land that looks underutilized today could attract very different priorities tomorrow. 

Private Universities: Navigating Legacy Land 

Private universities may have another advantage: significant land holdings accumulated over generations. In some cases, strategically located property that has served the institution for decades may offer new opportunities for new uses that support the university and athletics. But legacy land can also come with legacy constraints. Donor agreements, deed restrictions, conservation easements, use covenants, or other commitments may influence what can be developed and how. The opportunity is to understand both the potential value of these assets and the parameters within which that value can be realized.  

Before Breaking Ground, Understand the Tradeoffs 

Not every square foot of underutilized land should be monetized. Just because land could generate revenue doesn’t mean it should. Universities still have mission, culture, and public trust. Sometimes green space and gathering places have value. Commercialization shouldn’t erase what makes a campus unique. 

There’s also the question of governance. Professional sports typically has a single owner with a clear objective. Universities rarely do. Presidents, boards, provosts, faculty, students, and in some cases state officials all have different priorities. One group may view a project through the lens of revenue generation, another through student experience, another through academic mission, and another through political or community impact. The challenge is aligning governance around a shared vision for the right opportunity. 

There are also historic restrictions to consider. University land can carry limitations for any number of reasons, including how it was originally acquired, funded, conveyed, or used. State or federal land grants, gift agreements, deed restrictions, and other longstanding commitments can all shape what is possible today. The highest and best economic use of land may not always align with what is legally or institutionally permitted. 

Also to consider: fans don’t value the land the same way someone approaching it with fresh eyes might. A new leader, investor, or development partner may see inefficient land use, underutilized parking, and unrealized value. A fan sees where they’ve tailgated for 40 years, family traditions, and game day culture. Those are very different assets. The spreadsheet may say a hotel produces a higher return than a grass parking lot. And the fan may disagree. Emotional value is a very different conversation than an ROI calculation. 

Questions Every University Should Be Asking 

Before developing a parking lot, ask: 

• Mission: Does this advance the university’s long-term mission or simply generate revenue? 

• Tradition: What campus traditions or fan experiences could change? 

• Demand: Will this activate the campus year-round or only on game days?  

• Ownership: Who owns the asset today, and who should own it in the future? 

• Governance: Does our current governance model provide enough flexibility for future opportunities? 

• Tax: Are there federal, state, or local tax implications that should influence the structure and economic feasibility? 

• Optionality: What rights are we giving away that may become more valuable over time? 

It’s Not About the Parking Lot 

The conversation about entertainment districts needs to start with how universities define the role of athletics in an increasingly commercial ecosystem. For decades, athletics has generated demand that benefited the broader institution and surrounding community. The next generation of leaders will need to decide whether they simply want to create that demand or whether they should play a more intentional role in capturing the value it creates. The answer will look different at every institution. But the institutions asking these questions today will likely be better positioned for the opportunities that emerge tomorrow. 

Every entertainment district begins with a development plan, but the most important decisions often happen long before construction starts with strategic decisions. Whether you’re evaluating ownership structures, financing alternatives, governance models, long-term operating strategies—or just figuring out where to start—James Moore’s Collegiate Athletics CPAs and consultants can help you navigate what’s next. 

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