The war of words between the city of Santa Clara and the San Francisco 49ers flared up again this week, with millions of dollars on the line.
On the eve of today’s opening of the 49ers training camp, Santa Clara City Manager Deanna Santana, who doubles as executive director of the Santa Stadium Authority for Levi’s Stadium, released a “community letter” repeating the city’s demand that the National Football League Team pay a $1.1 million bill for stadium security.
Santana’s letter was released the same afternoon that a Santa Clara County jury found former 49ers defensive end Dana Stubblefield guilty of charges that he raped a woman at his Morgan Hill home in 2015.
The community missive included what the city said was the most recent information received from the 49ers about the Stadium Authority’s year-end financial report.
The 49ers in early June sent the city a bill for $2.74 million, payable in just four days, to cover net losses for the “non-NFL” events at Levi’s Stadium in Santa Clara for 2019-20. The team said it wouldn’t pay the security bill until the city reimbursed the team for the losses in the event business.
The 49ers are having none of it.
“Mayor [Lisa] Gillmor and her million-dollar-a-year city manager are cherry-picking numbers entirely out of context and relying on fuzzy math,” wrote Rahul Chandhok, vice president of public affairs and strategic communications, in response to a request for comment on Santana’s letter. “The 49ers Management Company has generated a profit for the Stadium Authority in every year of operation,” Chandhok said. “This past year alone, we provided the authority with $68 million in revenue.”
“The mayor, city manager and their army of taxpayer-funded political consultants have done everything in their power to destroy the stadium event business, he said.
In her statement this week, Santana said the 49ers had estimated earlier this year that the Stadium Authority would make approximately $18,000 in revenue by the end of last fiscal year (March 2020).
“This low revenue was based on the 49ers practice of booking losing non-NFL events ( 75 percent of non-NFL events lose money,” Santana said.
Santana published a chart that showed that just two of the seven non-National Football League events at Levi’s Stadium in the January-March quarter reported a profit: the Rolling Stones concert ($900,000) and the U.S. Women’s National Soccer Team match vs. South Africa ($200,000).
Three events lost money, according to Santana: Monster Jam ($400,000), the International Champions Cup soccer match, Chivas vs. Benfica ($100,000) and the Pac-12 Football championship, Oregon vs. Utah ($2.2 million). Two events broke even: the Redbox Bowl and the High School Football Series.
Total revenue for the 2019-20 fiscal year’s third quarter was $22.2 million, with $23.7 million in expenses, for a total loss in the quarter of $1.6 million.
Santa Clara voters approved the Santa Clara Stadium Taxpayer Protection and Economic Progress Act (Measure J) to protect the city’s finances by prohibiting the expenditure of city funds on stadium authority maintenance and operating costs. Just what constitutes these costs continues to be a point of contention between the city and the team.
Santana “in the past year, has billed a startling $7 million for city employee time, including her own,” countered Chandhok. “She has tripled the cost of overhead, due in large part to the alarming increase in the salaries for and benefits to her political allies.”
“Levi’s Stadium posted positive financial numbers for non-NFL events in every year before Santana’s arrival [in 2017],” he said. “Any losses related to those events are due to Santana pushing excessive costs onto the authority.”
Last fiscal year, Santa Clara provided public safety services for NFL and non-NFL events. The 49ers have paid for the public safety services for the home games, but still owe $1.1 million for services for the non-NFL events, according to the city.
“City staff have reminded the 49ers that Measure J does not allow city funds to cover any public safety costs related to stadium operations and that prompt payment of outstanding city invoices is required—however, the 49ers continue to refuse to pay the city.,” wrote Santana in her letter.
“The $1.1 million that the city complains is being withheld by the 49ers has, in fact, already been paid to the Stadium Authority and has been sitting in an authority-controlled bank account for more than a month,” said the 49ers spokesperson. “It is unclear why the Stadium Authority doesn’t simply transfer the funds to pay the city’s bills.”
“At a time when the city is facing its own fiscal deficits resulting from an economic downturn due to the COVID-19 pandemic, the Stadium Authority’s financial losses of $2.7 million as reported by the 49ers for last fiscal year (versus the general fund revenues the city had historically received), compounded by the 49ers refusal to reimburse the city $1.1 million for public safety services, is having a tremendous negative impact on public resources,” Santana wrote.
The San Francisco 49ers kick off their 2020 schedule on Sept. 13 at Levi’s against the Arizona Cardinals. No “non-NFL” events are scheduled in 2020.