Hosting Super Bowl might cost Santa Clara more than it’s worth

When the NFL was trying to get Santa Clara to approve a new stadium for the San Francisco 49ers, one of the things it did was promise to hold a Super Bowl there (or at least promise to think about it). Which, it turns out, may have been less a promise than a threat:

Santa Clara officials this week began weighing whether the city can still make money from a Super Bowl and related events after stomaching a new list of financial demands from the NFL — including giving up huge chunks of tax revenue…

Essentially, the NFL wants to lease the $1.2 billion Santa Clara stadium and the surrounding area — possibly including the Santa Clara Convention Center, a nearby soccer park and parking lots — for Super Bowl week at a much cheaper rate than normal, [City Attorney Ren] Nosky said. The league also wants other concessions, including possible tax breaks or a portion of the tax revenues received from hotels or other venues during the events…

NFL spokesman Greg Aiello said Thursday that the league also requires host cities to forego sales tax charges on Super Bowl game tickets, which are typically very pricey. Other host cities have exempted the NFL and its employees from taxes on visits and sales during the Super Bowl.

Oh yeah, and let’s not forget that San Francisco would be the actual host city, meaning that much of the Super Bowl week activities would take place there, and not in Santa Clara. But Santa Clarans would at least rest easy knowing that game tickets were being redeemed within their city limits, even if they couldn’t collect tax money on them.

11 comments on “Hosting Super Bowl might cost Santa Clara more than it’s worth

  1. “Has this gotten stupid enough for you yet?” Santa Clara: “No, keep going”.

    We’re kind of like that guy who gets the Russian mail order bride whose first demand upon setting foot in his home is “can I send for my boyfriend now?”.

    It’s not reassuring having city attorney Ren Nosky involved with this either as he recently served in the same capacity in Stockton which suffered greatly due to unrealistic development schemes conceived during his tenure (which is apparently why the SC city council wanted him in the first place).

    Also should be kept in mind that Silicon Valley public safety costs are among the highest in the nation. There were at least 92 arrests in the stands at Saturday’s 49er game at Candlestick–so our cops may be pretty busy…

  2. Indianapolis lost money on the SB ($1 million.) If a city of 1 million loses money,
    and Glendale, which has twice Santa Clara’s population, loses money ($2 million), how much will SC lose? We have one of the highest paid police depts. in the state of CA. We don’t even have enough officers to staff a regular NFL game much less a SB.
    In addition to demanding all public safety costs inside and outside of the stadium for free, the NFL’s typical SB demands include: use of the stadium rent free, use of lots of surrounding space rent free, lots of free parking, hotel rooms below ‘rack rate’, a no-fly zone (how will that work when the stadium is directly under the main flight path for San Jose International Airport?), no sales tax on food/hotels for its employees because it is (ridiculous!) a non-profit corporation…free free free and the list goes on. The host city gets no money from tickets/concessions/novelties etc.

    Not surprising that studies by economists have shown the hype of how much a community makes off of a SB is exaggerated 4 fold. And SC is sooo small that most of the hotel/restaurant etc. spending will occur outside of our city.

    Not one person on the Super Bowl bid committee is from Santa Clara, or represents the interests of the taxpaying Santa Clarans who will be footing the bill for this. Will our council demand that other communities/county/state pony up to help pay for a SB if they want one here? Or will they continue to pretend that the stadium will cost us nothing?

  3. Wow, that article is just blood-red meat for this site.

    You’d think that people who purport to support honesty and transparency would stop BSing about cities losing money on Super Bowls. It is possible that the city government spends more than it takes in during a Super Bowl week, BUT THAT IS THE PURPOSE OF GOVERNMENT. To allow private businesses to thrive by providing an infrastructure. I mean, wow. It cost the city of Indianapolis a whole $1 million TO MAKE $100 MILLION EXTRA (and that is a low, low estimate) for businesses within the city during a Super Bowl week. What were they thinking?

  4. “Businesses within the city” didn’t make $100 million during Super Bowl week. Visitors to Indianapolis spent an estimated $100 million within the city, including on the game. It’s the difference between net and gross.

    But in any case, the issue isn’t that Indianapolis spent $1 million to host the Super Bowl. It’s that the Super Bowl was supposed to be the benefit for the $700 million or so that the city spent on a new stadium for the Colts. Instead, its reward was more losses. I guess it’s nice if the hotel industry is happy, but there would have been cheaper ways to make them happy.

  5. The primary purpose of government is not to provide infrastructure in order for private businesses to thrive, nor is it to select which private businesses thrive by application of targetted subsidy to a given business or sector.

    If the former were the case, only corporate entities would be allowed to vote in this democracy. Wait! This is America…. I may have just undermined my argument there…

  6. Nobody should be surprised by the modern day “trusts” – professional sports franchises and their filicitators –
    following in the footsteps of JP Morgan & JD Rockefeller.
    Create a monolopy and set the rules.

  7. It seems that the NFL is also making demands for an upgraded stadium in Miami. The other city in the running for Super Bowl L.

  8. Well, the thing is that professional sports is economically speaking a “mouse that roars”. Check a sports team program and see how many people they really employ outside of their own highly visible performers. Office staff is actually pretty sparse. The city’s own estimate is that the annual economic activity generated by the stadium will be about the same as mid-sized grocery store in the same location. Yet the council thinks this is their most persuasive argument.

    The NFL has learned to maximize their profit making and are loath to leave anything on the table. When they are dealing with public officials who clearly not indifferent to whether a deal gets done, their job is made all the easier.

    Dan seems to think this relationship can be, or is, symbiotic; my belief is that it is parasitic.

  9. Check out carefully Commissioner Goodell’s demands that we allow him and his “league” raid our hotel taxes. That revenue stream is projected to be $11M to our ~$155M General Fund in fiscal 2012-2013.

    Hm. Now consider: The first year that the stadium opens in Santa Clara: Jed York will take home a haul of at least $130 MILLION in TV royalties and luxury box income.

    That same year, he pays a pathetic $180 *thousand* into the city’s General Fund.

    In other words: It will take no time at all for the NFL’s raids on our hotel taxes to exceed the pitiful Ground Rent paid by Jed York into that same General Fund.

    As usual: Stadium boosters have no coherent answer to any of this other than to regurgitate the same absurd “Niner Numbers” ad nauseam.

    Bill Bailey, Treasurer,
    Santa Clara Plays Fair dot Org