49ers stadium cost now $1.3b after added “fan experience enhancements”

The San Francisco 49ers are adding about $100 million worth of goodies to their new Santa Clara stadium, mostly for unspecified tech upgrades to “enhance the fan experience.” They can afford this, in part, because their annual rent payments are expected to go down from $30 million a year to $24.5 million a year, thanks to better-than-expected naming-rights and PSL sales and a refinancing deal that will cut the public stadium authority’s loan rate from 7% to 5%.

Clearly, the 49ers stadium is turning out to be a best-case scenario, where the public costs are going to be repaid by team revenues, and the stadium can pay for itself despite a whopping $1.3 billion price tag. (You could argue that the city could have held out for an even better deal where in exchange for fronting the cash it would get to profit from all the naming-rights and PSL boodle, instead of just breaking even, but that’s a best-case scenario for a more utopian America.) It just goes to show that some stadiums can be built with private money and turn a profit — so long as they’re in major metropolitan areas flush with tech income and host teams that go to the Super Bowl. Whether this would work in, say, San Diego, is another story, though one that the Chargers might want to be asking themselves given how their stadium subsidy demands are coming along.


6 comments on “49ers stadium cost now $1.3b after added “fan experience enhancements”

  1. Actually, they wanted $330 million for the naming rights. They got $220 million, but only 70% of that goes to Santa Clara’s Stadium Authority ($154 million over 20 years.) The remaining 30% goes to the 49ers.

  2. PSL revenue in Santa Clara will cover the entire $450 million short term loan and financing costs. The Chargers couldn’t raise $100 million in PSL revenue in San Diego.

  3. Well, I’d say about 80% of the time, these deals fail. Which means “something else” happens the other 20% of the time.

    For my own immediate needs, I can see that pro-KJ/pro-arena types in Sacramento will continue to insist that Sac will be one of the 20%. Obviously, that could happen. I just don’t think it will, and I also hope I’m wrong.

  4. It’s too soon to say how things work out in Santa Clara. I won’t be willing to say this doesn’t cost the city money until I see the stadium operating several years. There’s also the opportunity costs; the city’s own analysis stated that they could make more money with an office building (and the commercial real estate market is hot here again).

    I’m still waiting (crickets) to hear about alternative events…

  5. Current levels of fan interest in the 49ers have only come about because of the team’s performance over the past several years.

    When the team reverts to a lesser level of performance, as it has done many times over the course of its six-decade history, there is no reason to hope that fan interest will remain high.

    With high levels of fan interest comes high levels of corporate interest.

    Silicon Valley is in another one of its boom periods, so companies in the area (not just tech companies) can afford to spend money on corporate boxes, tickets, and spending to attract customers from the 49er fan base.

    When this boom expires, as it has many times during the seven decade history of the tech industry in the Valley, it will impact fans, customers, companies, and local governments all at once.

    That’s why you stress the point, Neil, that the 49er’s formula only works “in major metropolitan areas flush with tech income and host teams that go to the Super Bowl.”

    Neither of these two features are at all guaranteed to last for the 30-year lifetime of the stadium loans.

    I am still far from sanguine that this billion-dollar stadium won’t be a boondoggle for the taxpayers of the little city of Santa Clara a few years down the road.

  6. “Neither of these two features are at all guaranteed to last for the 30-year lifetime of the stadium loans.”

    Sure, but since the PSLs and naming rights are already sold, it’s going to be the PSL-holders and Levi’s who get screwed if the team ends up sucking for a decade.

    The 49ers gambled that demands for tickets, naming rights, etc., would be high, and won. I don’t know if I’d say that Santa Clara won too, exactly, but they certainly dodged a bullet thanks to the 49ers going on a winning streak at exactly the right time.

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