There are elements of the 49ers’ Silicon Valley stadium proposal that are fairly clear cut. The city of Santa Clara will be responsible for $79 million, a package of redevelopment funds/bonds and money to move an electrical substation, while local hotels will kick in $35 million. The team and the NFL have pledged $493 million to make the project happen.
It’s the other $330 million that are a little harder to decipher. This funding will be the responsibility of the city-run Stadium Authority, and supposedly will pay off bonds via streams such as stadium naming rights, a ticket tax, so-called pouring rights sold to vendors, and (hide your eyes, folks) dreaded personal seat licenses.
There is no publicly available breakdown of this $330 million obligation, but you would have to assume naming rights are a major portion of it. So we’re here today to ask the question: Are the 49ers overly optimistic in their expectations of naming revenue?
The logical first step is to look at some of the deals worked out by other NFL teams/stadiums in recent years, including the most recent – the Dolphins’ contract with Sun Life Financial, announced in January.
Here are seven to consider:
Dolphins/Sun Life Financial/$25 mil over 5 yrs
Cardinals/University of Phoenix/$154.5 mil over 20 yrs
Texans/Reliant Energy/$300 mil over 32 yrs
Redskins/FedEx/$200 mil over 27 yrs
Panthers/Bank of America/$140 mil over 20 yrs
Eagles/Lincoln Financial/$139.6 mil over 20 yrs
Colts/Lucas Oil/$121.5 mil over 20 yrs
With a couple notable exceptions, they’re mostly in the range of $6-8 million per year, with 20-year contracts. (The Reliant deal in Houston looks inflated, doesn’t it?) But some economic analysts think shorter deals like the one in Miami might become a trend as corporations wait out the next rollercoaster turn in an unpredictable market.
The 49ers declined to discuss the issue in detail.
“There is not much new information on the subject of naming rights from the 49ers,” Lisa Lang, VP of communications and government relations, told me in an e-mail, attaching a previously distributed fact sheet. “We have not broken the categories out any further for obvious reasons. As for other stadiums, each project is so different it is hard to make comparisons.”
William F. Bailey, treasurer for the anti-stadium group Santa Clara Plays Fair, is happy to make comparisons, and he says they all make his city’s proposed stadium financing look bad.
“The market for naming rights has clearly fallen off since the market meltdowns – equities and municipal bonds – and one need only look at New Cowboys (unsold), Meadowlands (unsold), and Candlestick’s last meager returns from Monster Cable. Those were $6M in four years, equaling a paltry $1.5M a year,” Bailey said, also in an e-mail. “The notion that these rights could be sold easily in Santa Clara, much less for any reasonable amount, is nothing more than irrational exuberance on the part of Stadium Boosters.”
Bailey might not be completely fair with his first two comparisons. Because Jerry Jones gets to advertise his “brand” while his mega-structure is called Cowboys Stadium, he is said to be waiting out an advantageous price. And though the new Jets/Giants stadium does not have a sponsor yet, everyone expects it to get one soon enough, and it may fetch a record-setting price.
But Bailey brings up a good point with the disappointing sum acquired by San Francisco for Monster’s sponsorship at Candlestick. There’s no way $1.5 million a year can get the Santa Clara Stadium Authority into the black.
Of course, this is Silicon Valley we’re talking about. It’s clear the team is hoping a Cisco or a Google or a Yahoo – all neighbors – steps up with a check for $150 million or so. (My personal recommendation: The GooglePlex.) Last week the team named John Vidalin chief sales officer; one of his primary jobs will be to secure naming rights.
Assuming, of course, that the project wins voter approval in Santa Clara in a week. Bailey is opposed to Measure J for numerous reasons, and naming rights are certainly among them.
“There are a number of claims being made about naming rights,” he said over the phone. “They’re trying to fool Santa Clara not only into funding the stadium, but maintaining it every year through the Stadium Authority. And they’ll have to do that without any contribution from the 49ers.”