Jeff Kravitz/Getty Images
- A new study shows Levi's Stadium generated $2 billion for the local economy in its first 10 years.
- It is also on pace to pay off construction-related debt 15 years early.
- The study found a huge portion came from non-NFL events, such as two Taylor Swift concerts.
Levi's Stadium, home to the NFL's San Francisco 49ers, has been an economic boon to the Santa Clara area. And experience-driven spending on non-NFL events, like concerts, is partially responsible.
A new economic and fiscal analysis provided by the 49ers from marketing research and economic consulting firm SportsEconomics for Levi's Stadium estimates that the venue has generated more than $2 billion for the local economy through direct (e.g., visitor money spent on things like restaurants and hotels) and indirect spending (outside money spent in a community that is later re-spent in the same area).
Of that, $546 million has gone to employee earnings, with an estimated 12,000 full-time jobs created thanks to the stadium in its first decade of operation.
Additionally, the 49ers announced that thanks to high revenue streams and the sale of seat licenses, most construction-related debt was paid off more than 15 years early. The latter, also known as "Stadium Builders Licenses," is akin to buying a membership that allows fans to purchase season tickets and get premium access to other events. More than $300 million was brought in before Levi's Stadium opened and was used to help pay for its construction.
HNTB
Non-NFL events contributed to the stadium's success
While the stadium was built for an NFL team, the study showed that a big chunk of the economic impact came from non-NFL events, especially live music concerts.
For example, SportsEconomics estimates the local economic impact of the 2022 fiscal year was $251 million. That included 12 NFL games and seven high-profile concerts, including The Weeknd, Coldplay, Elton John, and Red Hot Chili Peppers.
Those four concerts alone contributed $36.5 million to the economy. Meanwhile, the impact of regular-season NFL games used in the study ranged from $8.2 million to $17.9 million.
Kate Green/Getty Images
That momentum has continued in 2023, thanks to Taylor Swift. Her two concerts at Levi's Stadium in July are estimated to have generated a total of $33.5 million in economic impact for the area.
In a recent interview with sports business and culture website Front Office Sports, 49ers President Al Guido said revenue from events unrelated to the NFL "definitely exceeded" expectations.
This is not surprising as people are spending more money on experiences in the post-pandemic world — what Bank of America has termed "Funflation" — with the biggest example being Swift's tour.
Data from the research company QuestionPro obtained by Fortune estimated that Swift's "The Eras Tour" could generate $4.6 billion in US consumer spending. Hits Daily Double reports that Swifties spent between $1,300 and $1,500 on hotels, travel, and food for every $100 spent on tickets, between four and five times the typical rate.
The Las Vegas Convention and Vistors Authority credited Swift's tour with bringing tourism back to pre-COVID levels. And in Glendale, Arizona, her first concert helped generate more local revenue than the Super Bowl had in February.
Mike Coppola/Getty Images for MTV
A big win for other teams
These numbers are a big win for sports teams seeking financial help to build stadiums. In the never-ending debate over who should pay for stadiums, the 49ers are trying to show that using public assistance doesn't have to be detrimental to an area.
If cities want to attract big-name artists and enjoy similar impacts as Levi's Stadium, they will need stadiums that are more modern. Of the 20 US stadiums used in the first leg of Swift's tour, 17 were built or underwent extensive renovations in the last 15 years.
One of the key attractants to building new stadiums is that they can include more luxury suites. These high-end accommodations have become one of the fundamental driving forces behind teams' demands for new stadiums as they create more revenue than regular seats.
Robert Beck/Getty Images
Of the $1.3 billion needed to build Levi's Stadium, $950 million came from Goldman Sachs loans given to the Santa Clara Stadium Authority (SCSA), a public group separate from the city of Santa Clara, which was created to obtain funds for the construction and oversee the operations of the stadium.
It is that $950 million construction-related debt that is on pace to be paid off early, saving the SCSA an estimated $100 million in interest payments.
A similar situation played out recently in Minneapolis, where debt from the construction of the Minnesota Vikings' new stadium was paid off 23 years early, saving taxpayers $226 million in interest.
Public money for Levi's Stadium construction amounted to about $114 million. Of that, $35 million came from new tax money, a 2% hike on hotels near the stadium.
The rest of the non-public funding — approximately $263 million — came from the NFL's stadium fund and the 49ers.
Guido thanked the citizens of the Bay Area in a letter and lauded the economic impact study in a statement.
"We have always seen Levi's Stadium as a powerful economic engine for this community and the region, and we're proud this report shows that over nearly a decade we have lived up to that potential and promise," Guido wrote in his letter.
Of course, not all public funding works out for an area subsidizing a stadium. Before the Levi's Stadium analysis, most earlier studies showed the impact of a stadium rarely lives up to the promises of the teams.
But now, other teams have a roadmap detailing how to fund a stadium in a way that helps many.
And if the cities get new stadiums and can attract future Swift concerts, they can thank the 49ers.
from All Content from Business Insider https://www.businessinsider.com/levis-stadium-cost-value-49ers-economy-taylor-swift-2023-10
via gqrds
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.