Santa Clara to sue 49ers for stadium control, after team allegedly gave itself cut-rate rent for college bowl game, among other things

The simmering squabble between the San Francisco 49ers management and the city of Santa Clara blowed up real good last night, when the Santa Clara city council voted to strip the 49ers of their right to run concerts and other events at their stadium, on the grounds of having “grossly mismanaged” them:

The City Council voted 6-0 Tuesday, with council member Patricia Mahan absent, to initiate legal proceedings to end the team’s management agreement. The action would not affect the team’s home games or other National Football League activities, City Attorney Brian Doyle said.

“We have hit rock bottom and we have nothing to lose” by ending the agreement, Doyle said at the council meeting.

One of the city’s claims: The 49ers rented out the stadium to something called the Redbox Bowl, at a $500,000 loss to the city. “Guess who owns the Redbox Bowl?” said Doyle. “The 49ers.”

As you may recall if you were following when the 49ers’ crazy-convoluted stadium deal was arranged way back in 2012, the city of Santa Clara built and owned the stadium, paying it off partly from stadium revenues and partly from rent money the 49ers paid to the city to repay money that the 49ers loaned to the city after borrowing it from banks. (If you think that last clause is hard to read, think how it was to type it.) This, at the time, seemed like a maybe-promising way to fund a stadium, since the 49ers would get out of paying property taxes by not owning the stadium and get out of having to share a bunch of revenues with the NFL by having them go directly to the city, while the city would get all its debts paid off so long as 49ers fans bought enough personal seat licenses (which they did, not that they were all that happy about it afterwards).

Things have gone way downhill since then, including the 49ers owners threatening to withhold rent payments to the city; Santa Clara’s mayor threatening to seize management of the stadium if 49ers execs didn’t hand over documents on how they were spending city money; and finally last week the Rolling Stones complaining of mismanagement at the stadium and vowed never to play there again, which is honestly maybe kind of an idle threat for a band whose members range in age from 72 to 78, but anyway.

The 49ers have responded by calling Santa Clara’s actions “purely retaliatory.” There’s a city press conference scheduled for right about now to maybe explain exactly what lease clauses the team has violated that could allow Santa Clara to terminate the management contract — I’ll add an update if we learn anything new then.

UPDATE: Per SFist: “At the press conference, per KPIX, Santa Clara Mayor Lisa M. Gillmor leveled accusations of wage theft on the 49ers, saying they failed to pay prevailing wages for workers at the venue. Also she said that stadium manager Jim Mercurio had ‘received or purchased stock in two companies that were granted stadium authority contracts,’ which is a ‘clear conflict of interest.’ The team maintains that they will continue to manage the stadium for all event, and they say the city’s actions are ‘in direct violation of the clear language of the relevant contracts.'”


2 comments on “Santa Clara to sue 49ers for stadium control, after team allegedly gave itself cut-rate rent for college bowl game, among other things

  1. Well, this IS how Glencore manages to fool African nations who’s residents live in dire poverty into taking out IMF loans to build facilities for their resource extraction companies… based on the notion that – at world price – the resource will easily allow the nation to repay the loans and generate vast profits for the penniless nation.

    And then Glencore sells the resource to it’s own Swiss registered subsidiary for $2/tonne… leaving both the host nation and the locals even worse off than they were before AND with massive IMF debts to repay (somehow).

    So why wouldn’t an NFL owner adopt such a model?
    Who could have imagined forming a partnership with a York run business would result in less than satisfactory outcomes???

    Let’s hope the city uses all the leverage and contractual power it actually has to good effect.

  2. I went to Wrestlemania at the 49ers stadium a few years back. I won’t how much the city lost on that?