Tuesday, April 5, 2011

The 49ers' Stadium Subsidies: There are Naming Rights, then there are Naming Rights

Dear Santa Clarans,

Open up the stadium's Term Sheet and note from the last line of Section 7.3(b) on page 10:

  • "Unless otherwise agreed by 49ers Stadium Company, Naming Rights Revenue will not include revenue from rights to name or sponsor components of the Stadium, or from advertising or promotional activites, all of which are included in the Team Revenue." [Emphasis mine.]
The Santa Clara Stadium Authority will be paying massive debt service as a part of its $330 million portion of the 49ers stadium subsidy. Yet, less than an hour ago, one of the 49ers own representatives tried to tell me that every cent from the sponsorship of the overall naming of a stadium in Santa Clara will flow into the Santa Clara Stadium Authority.

Really? Check out this evening's "Stadium Naming Rights Marketing Agreement," part 2.2:
  • "The Parties acknowledge that Stadco and/or the Team may also separately retain the Naming Rights Broker to perform sponsorship brokerage services for Stadco and/or the Team."
If they use that same broker - and the "halo effect" of the overall stadium naming rights - in order to inflate the naming rights take from any "Joe Montana Gate" or "Bill Walsh Concourse," the 49ers really will score - better than they did last playing season and probably better than this year.

Please. Let's not pretend for a minute that the Santa Clara Stadium Authority is going to get the best deal it can possibly get under those conditions. Putting even more cash into the pockets of the 49ers doesn't help us pay off the massive debts we'll have from the stadium's construction - or from operating it for the 49ers.

The massive stadium subsidy means well over $130 million in broadcast royalties, luxury box contracts and club seating for the 49ers in the first year of any stadium in our city.

It means a stinking $180,000 for our City's General Fund.

But - as usual - we saw this evening in City Council Chambers that the stadium subsidy "deal" isn't intended to benefit us.

It's only designed to benefit the 49ers.

Thank you for your continued support,
Bill Bailey, Treasurer,