Levi’s Stadium event profits expected to come in at less than a fifth of projections
SANTA CLARA – The San Francisco 49ers say profits this past fiscal year for Levi’s Stadium events outside of National Football League games will be a projected $750,000 compared to the $5 million they were originally expecting.
The team blames the sharp fall in event profits – which in the past have included concerts, beer festivals and games by other sports leagues – on a 10 p.m. city curfew for weeknight, outdoor non-nfl events. Events on Fridays and Saturdays can go until 11 p.m.
“The Mayor has played politics and refused to correct, or even address, her music ban,” said 49ers Vice President of Public Affairs Rahul Chandhok, referring to Mayor Lisa Gillmor. “Residents have lost out on millions of dollars in revenue and music lovers have been denied an opportunity to view worldclass events.”
The curfew has been a major point of contention between the city and the 49ers, which operate the stadium and say the curfew is too restrictive.
A few large concerts at Levi’s Stadium have violated the curfew in recent years, including a Beyonce concert in 2016, and Coldplay and U2 concerts in 2017. British singer-songwriter Ed Sheeran reportedly cancelled a show at the stadium for his 2018 tour because of the curfew.
City officials, who were notified of the profit projections in writing Wednesday, said in a statement that the stadium’s management company “books money-losing, non-nfl events at Levi’s Stadium” and blaming the 10 p.m. curfew is “simply irresponsible and deflects from their management performance.”
“We are going to hold the 49ers to the rules they agreed to when Levi’s Stadium opened in 2014,” said Gillmor in a statement. “We can have successful concerts at the stadium on weekdays and weekends and allow for people in our community who work and go to school to sleep during the week.”
The city also pointed to $12 to $14 million in projected losses for the stadium for hosting the College Football Playoff National Championships.
Profits for non-nfl events have come in above $5 million in the past four fiscal years, according to Chandhok, or over $22 million since the 2014-15 fiscal year, with “$10.6 million going directly to the City’s general fund” and “an additional $9 million for the Stadium Authority’s Discretionary Fund.”
The city, citing an audit it conducted last yearamid debate over the curfew, argues the actual benefits of these types of events to the city’s general fund are much lower, and events that are less disruptive to the neighborhood, such as weddings and corporate events, actually bring in more revenue.
For example, events like soccer games and concerts brought in more than $5 million in profits in the 2017-18 fiscal year, but that was offset by $3.6 million in losses from non-nfl football games, according to an October statement from the city.
“The report also found that the majority of General Fund revenue is generated through over 100 special events, ranging from corporate events to weddings and holiday parties, held at the stadium,” according to the city statement. “These events brought in approximately $1.7 million to the General Fund and have a minimal impact on neighboring residents’ quality of life.”
The city has also pointed to a community poll it commissioned that found 36 percent of people living near the stadium, and 31 percent of Santa Clara voters, are concerned about noise from events at night.
Chandhok said concerts “continue to be some of the most profitable events a venue can host” and also pointed to other revenue generated by the stadium, including hotel bed taxes generated by stadium events.
He pointed to comments by a major concert promoter, Louis Messina, who said in a 2017 interview that the city is “going to lose so much revenue,” and “no one is going to play a building with a 10 p.m. curfew.”
“Political grandstanding and bad policy decisions have outcomes,” said Chandhok. “The largest promoters in the world forecasted the consequences of the music ban. We are seeing that play out now.”
The city said stadium management submitted a draft budget proposal late Wednesday night, and instead of going through the normal budget process with the city’s Stadium Authority, leaked information to the media.
“Santa Clara wants the 49ers to be good business partners, but they continue to attempt to wage a political war of words with Santa Clara,” according to the statement. “This is not a professional approach, and the Stadium Authority will act responsibly and professionally to present a budget.”
The $750,000 profit projection is not final, and could change before the fiscal year ends in June.
The football team has butted heads with Gillmor over a number of other issues, including a stadium rent adjustment and the use of a nearby soccer complex for parking.
Most recently, the city council voted unanimously on Tuesday to initiate a lawsuit against the team over the availability of handicap parking spaces and allegedly improper storage in the stadium’s main parking lot.
Chandhok said the stadium has an agreement with the Great America theme park for use of the lot.
“Initiating litigation comes as a surprise as we were scheduled to meet with city staff to discuss this issue in early February,” Chandhok said.