2 Santa Clara Stadium
Authority
Study Session
Proposed Santa Clara Stadium Authority FY 2025/26
Budget, Compliance and Management Policies, and
Marketing Plan
Item #2.A (25-263)
March 4, 2025
Agenda
1. Overview
2. Key Summary
3. February 25th Study Session Questions and Responses
4. Recommendation
POST MEETING MATERIAL
1 Overv iew
October/November 2024 Stadium Authority staff worked with Manco to discuss the annual budget plan which included the dates that Manco would provide all necessary documents as required by the Stadium Agreements.
December 2024 Stadium Authority staff provided the Stadium Authority G&A, Public Safety Capital Expenses, and Discretionary Fund costs to Manco for review and incorporation into the annual budget.
At least 45 days prior to the start of the fiscal year (January 31) ManCo provided the required documents per the Stadium Agreements:
Stadium Operations and Maintenance Plan
January 2025 Annual Shared Expense Budget with Five Year Projection Annual Stadium Authority Operations Budget, Capital Expenditure Plan with Five-Year Projection Annual Public Safety Budget
2025 Marketing Plan and Public Safety Document Updates
February 2025 Staff submitted a series of questions to Manco on February 11, 2025, and received responses on February 21.
February 25 & March 4, Special Study Session on Fiscal Year 2024/25 Operating, Debt Service, and Capital Budget, Stadium Operation 2025 and Maintenance Plan, Public Safety Budget and Marketing Plan March 11, 2025 Public Hearing to approve the SCSA Proposed Fiscal Year 2024/25 Operating, Debt Service, and Capital Budget March 14, 2025 SCSA Notice of approval/disapproval of the Stadium Manager's Draft Annual Stadium Authority Budget March 21, 2025 Stadium Manager required to submit Adopted Budget to the Trust ( 10 days prior to start of FY) 3 Overview (cont .)
I
Summary of Report Attachments:
1. Proposed Santa Clara Stadium Authority Fiscal Year 2025/26 Operating, Debt Service, and Capital Budget
2. Annual Public Safety Budget
3. 2025 Marketing Plan
4. Stadium Authority Budget Policy
5. Stadium Authority Compliance and Management Policy
6. Staff Report from February 25, 2025 Meeting
7. Staff Presentation from February 25, 2025 Meeting
8. Questions and Responses from February 25, 2025 Meeting 4 2
Overview (cont .)
Operating
Budget
$61.2M
5 +
Debt
Service
Budget
$20.6M
+
CapEx
Budget
$18.6M -
Debt Service
and Capital
Transfers Out
$22.8M
--
Total
Budget
$77.6M
Excess Revenues Distribution
Excess Revenues Distribution: If revenues exceeds expenses in a lease year the Excess Revenues are required to be distributed in the order as set forth in Article 14 of the Stadium Lease agreement as shown below.
1. Payoff any 6. Fund Operating Expense 7. Fund Renovation / outstanding Manco Reserve up to $20M - Demolition Reserve Revolving Loan - NIA Completed in FY2022/23, (50% if less than $70M) Revised Annual 3% Contribution Ongoing - In progress
2. Fund Future c Safety Cost Stadium Authority 5. Repay any outstanding Expenses up to $2M - tstanding New Completed in FY principal balance on (50% of
2014/15 Subordinate Loan - Completed g) - In progress
in FY 2022/23
9. Additional
3. Fund Stadium disbursements can be
Capital E)(penditure 4. Fund Operating Expense used to pay Stadium Reserve up to $1M- Reserve up to $10M- Authority Discretionary Annual contribution Completed in FY 2014/15 Expense, including the 6 City's General Fund -
Future Allocation
3 Stadium Authority FY2025/26 Budget
Ke Summa
o Implements terms of the 2024 Settlement Agreement
o Supports major events including 2026 World Cup and Super Bowl LX o Net Non-NFL Events Revenue budgeted at $5.3 million
Lower than prior two fiscal years (FY)
• FY 2023/24 Actual: $8.3 million
• FY 2024/25 Projection: $9.2 million
Historical performance increases from preliminary budget projection o Public Safety Costs (PSC) reimt,ursements over threshold expenditure is budgeted to be $2.1 million
$2.0 million from PSC Reserve
$0.1 million from Discretionary Fund
o PSC 2024 Outstanding Balance ($9.2 million in FY 2024/25, $2.8 million in FY 2025/26) 7 Projected $2.8 million balance at end of FY2025/26
Stadium Authority FY2025/26 Budget
Ke Summa (cont. )
o Direct payments to the General Fund at $6.2 million
• Performance Rent for FY 2025/26 ($2.2 million, accrual basis) • Projected FY 2025/26 Excess Revenue ($2.8 million)
• Ground Rent ($1.0 million)
• Senior and Youth Fees ($270,000)
o Non-NFL Ticket Surcharge revenue is projected to increase $2.0 million, increase of the surcharge from $4 to $8 for tickets sold for certain events o Additional $1.0 million to the CapEx fund above contractual requirements to provide additional resources for potential additional CapEx expenses o Levi's Naming Rights expense of $1.6 million to cover the Authority's obligations under its Naming Rights Agreement with Levi's to provide suite and tickets to the six 2026 World Cup soccer matches (anticipated B additional surcharge of $2.1 million from events)
4 February 25th Study Session Questions
and Res onses
Question: The CapEx reserve is
projected to drop to a low level in
FY2025/26, what is the plan to address
the low reserve amount? How does the
additional $1.0 million contribution
factor into this plan when there are no
specific projects identified for these
additional funds.
g
Response: The Stadium Manager has contracted with a
consultant to complete a Facilities Condition Assessment (FCA) which is expected to be completed in May. Staff has participated in a walk-through with the consultant and once the Stadium Authority receives a copy of this FCA report, staff will perform an independent review to understand the budget implications. This report will inform decisions around Levi's Stadium capital needs.
The additional $1.0 million contribution is being recommended in case unexpected expenses arise during the fiscal year. Depending on the results of the FCA report, this additional contribution could be adjusted.
February 25th Study Sess ion Questions
and Res onses (cont. )
Question: What additional information
can be provided regarding new Manco
office space expense?
rn
Response : Manco staff moved into office space on Great America Parkway and a share of those expenses were proposed by the Stadium Manager to be included in the Stadium Authority's FY 2025/26 budget under the Other Expenses line item. Since this is a new expense request by Manco, conversations between Stadium Authority staff and Manco about this topic are ongoing.
According to Manco the decision by the 49ers to move business staff, including Manco employees , to office space off Great America Parkway is intended to foster collaboration and efficiency across the organization. Unlike the previous structure, all business staff are consolidated in one location, leading to more frequent personal interactions that provide stronger working relationships and improved productivity. The costs associated with the office space will be allocated to the SCSA, StadCo and TeamCo for their respective share of costs based on employee count.
5 February 25th Study Session Questions
and Res onses (cont.)
Question: Why is the Levi's naming
right's expense related to the FIFA
World Cup 2026 tickets being included
in the FY2025/26 budget when the FIFA
World Cup 2026 games do not occur
until FY2026/27? When will the Stadium
Authority receive the FIFA World Cup
2026 ticket surcharge?
11 Response: This is a timing difference due to the fact that the expense needs to occur in the year prior to the receipt of revenue for the FIFA events. FIFA is requiring that tickets and suites that are being allocated through sponsorship agreements must be purchased by the fall of 2025. Otherwise , they will be reverted back to FIFA to be sold. Therefore , the purchase of tickets for Levi's required under the naming rights agreement is expected to occur in FY2025/26. The ticket surcharge that the Stadium Authority will collect on the FIFA World Cup 2026 soccer events will not be received until after the events occur in FY2026/27 .
February 25th Study Session Questions
and Res onses (cont. )
Question: Why are Stadium Builder
License (SBL) Sales and Service
expenses high given that SBL revenue
is declining? Why is there a need for 19
FTE in the SBL Sales and Service
departments?
12 Response: The sales and support model for legacy and new SBL revenues consists of three key areas: 1) active sales efforts to sell licenses; 2) support services for existing SBL customers-including collections on financed SBLs and member support ; and 3) general services such as ticketing. Staffing levels are continuously evaluated to align with these functions, ensuring clarity on individual roles, sales activities that are exclusive to SBLs, and benchmarking ROI through sales quotas and customer support levels. Although there are 19 SBL Sales and Service staff members , they do not equate to 19 full-time equivalents (FTEs), as their time spent on Stadium Authority-related tasks is tracked and reflected in the budget accordingly. The SBL Sales team has consistently exceeded revenue targets, generating over $10 million in new SBL sales in three of the last four sales campaigns.
However, many of these sales are financed over a 10-year period, meaning that while they contribute to long-term contractual revenue, they may not be fully reflected in the current fiscal year. 6 February 25th Study Session Questions
and Res onses (cont.)
Question: Why have Stadium Authority
General & Administration (G&A) costs
increased by 8% from the prior year?
Are the staff members included in this
budget subject to CalPERS? Are the 8.7
FTE all Stadium Authority positions?
Question: What is the source of the
excess revenues, why do they fluctuate
year over year and how do they flow to
the City's General Fund?
13 Response: These staff support costs are City employees working on Stadium Authority activities . Portions of over 40 different staff perform this work which equates to 8. 7 FTE positions . Cost increases are attributed to increases in staff time as well as increases to salaries and benefits including CalPERS costs. The overall Stadium Authority G&A budget also includes some consultant contracts including audit and legal services as an example.
Response: Excess revenues are generated when revenues
exceed operating expenses, transfers to the CapEx reserve and debt service expenses. The terms of the 2024 Settlement Agreement and resulting amendments to the lease agreements describe how excess revenues are to be distributed at the end of the fiscal year (often referred to as the excess revenue waterfall}.
The reason that excess revenues can fluctuate from year to year is the result of revenues and expenses coming in higher or lower than anticipated.
February 25th Study Session Questions
and Res onses (cont.)
Question: During the 2024 Settlement
process it was expected that the City's
General Fund would receive $20 million
in the following two Fiscal Years. Please
describe where this $20 million is
shown in the budget.
Estimated $20M Payments to the City
Base Rent ($2 M) Vear-End "~ss Revenue" ~S7,) M)
• FY 2024 /25 • $1 M i • FY 2024 /25 • $3.1 M {est. )
• FY 2025/26 • $1 M '. • FY 2024 /25 - $1.0 M (G&A Savings) • FY 2025/ 26 - $3.6 M (est. )
P_erforfflilnCCt-SaS:ed Rent (S9.6 Mt Senior and Youth Program Fees ($0.6 Ml I • FY 2022/2 3 - $4.2 M • FY 2024/ 25 - $0.3 M {est ,) I • FY 2023/ 24 - $2. 9 M • FY 2025 /26 - $0.3 M (est .) I • FY 2024/25 - $2.5 M (est. )
Projected Payments from Stadium Authority to the City's General Fund
Senior & Youth Fees
G roi.id Rent
Performance Rent
Transfer to c· General Furd from Excess Revenues
Total
FY 2024125
$ 279,000
1,000 ,000
11,450 ,000
5,893.000
$1 8,622,000
FY 2025/26
$ 270,000 $
1,000,000
2,150,000
2,820 ,000
S 6,240,000
Total
549,000
$13 .6 vs. $9.6
$8.7 vs. $7.7
7 February 25th Study Session Questions
and Res onses (cont.)
Question: What is the source of the
excess revenues, why do they fluctuate
year over year and how do they flow to
the City's General Fund?
15 Response: Excess revenues are generated when revenues exceed operating expenses, transfers to the CapEx reserve and debt service expenses. The terms of the 2024 Settlement Agreement and resulting amendments to the lease agreements describe how excess revenues are to be distributed at the end of the fiscal year (often referred to as the excess revenue waterfall).
The steps are described in detail on page 18 of the Santa Clara Stadium Authority Proposed Fiscal Year 2025/26 Operating, Debt Service and Capital Budget. The reason that excess revenues can fluctuate from year to year is the result of revenues and expenses coming in higher or lower than anticipated.
February 25th Study Session Questions
and Res onses (cont.)
Question: Why did the Naming Rights
Signage CapEx project increase by
$1.1 million?
·16
Response: The initial budget estimate was calculated prior to the forma bid process. Upon a competitive solicitation the, total estimate came in higher than originally projected. The increase was due to additional structural support required for the large sign and rising material and labor costs. This project was approved by the Board in December 2024.
8 February 25th Study Session Questions
and Res onses (cont.)
Question: How will the Marketing Plan be
used to increase net Non-NFL Event
Revenue?
17 Response: The Marketing Plan focuses on increasing net Non-NFL event revenue by boosting awareness, engagement, and direct bookings for Levi's Stadium . Non-NFL revenue has exceeded targets based on a focus on booking higher margin events, which is a key pillar of the marketing plan. Another important pillar includes targeted advertising to position the stadium as a top-tier venue and client engagement efforts like showcases and networking events.
Additionally, staying active in the industry through conferences and market research helps maintain a competitive edge. With a strategic approach to these initiatives, the plan aims to drive sustained growth and maximize marketing ROI. SCSA staff believe the Marketing Plan should be more comprehensive in nature to include more business justification for the current strategy and opportunities for growth beyond the current strategy. Stadium Authority will work with a consultant to provide insights on industry best practices regarding revenue optimization strategies for Non-NFL events, and staff will work with Stadium Manager on discussing opportunities for growth within the Levi's Stadium business model constraints (e.g. costs, contractual obligations and stadium infrastructure).
February 25th Study Session Questions
and Res onses (cont.)
Question: Why is the SOMP
confidential and can it be public after it
is finalized?
·13
Response: The SOMP is more than 700 pages long, and
addresses a wide variety of topics including security, staffing, and equipment. Much of this information is safety-sensitive and is therefore not for public dissemination.
9 February 25th Study Session Questions
and Res onses (cont.)
Question: Does the City or Manco
make decisions on public safety
deployment (and therefore costs) during
events?
19 Response: The City's Police Department works with the Stadium Manager for deployment at Levi's Stadium events based on threat assessments for each event. The Stadium operates in a layered public safety approach, and during normal or major events, where another governmental agency does not take over control (e.g., the Secret Service), the Santa Clara Police Department is the lead law enforcement agency.
February 25th Study Session Questions
and Res onses (cont.)
Question: Why are the $1.5 million
funds need to for warranty related
work?
20 Response: This has been carried over for several years related to projects that were identified after the initial construction had been completed. While certain capital elements may be covered by a warranty, the cost to remove and replace the capital element (for example) may not be covered by the warranty thus the need for capital funds for warranty related work. Manco is in the process of reviewing the outstanding warranty related projects and claims to determine if any warranty related expenditures may be required.
Upon confirmation that no further warranty work is anticipated, the funds may be allocated to the CapEx reserve .
10 February 25th Study Session Questions
and Res onses (cont.)
Question: Why are the projections for
net Non-NFL Event Revenue only $5.3
million when there are some good
performers that are coming?
Response: Manco has a practice of budgeting net non-NFL event revenue lower than what is expected based on events that are known. Stadium Authority staff expects the net non-NFL event revenue to come in higher than budgeted similar to prior years.
This is more of a budgeting practice than an expected reduction in revenue.
Net Non-NFL Event Revenue
(in millions)
Adopted Actual/ Variance Budget Projection
FY 2022/23 $ 0.3 $ 8.8 $ 8.5
FY 2023/24 4.5 8.3 3.8
FY 2024/25 6.0 9.3 3.3
FY 2025/26 5.3 TBD TBD
February 25th Study Session Questions
and Res onses (cont.)
Question: Please provide a comparison
of FY2025/26 and FY2024/25 Shared
Stadium Expenses.
22 Response: As Manco continues to assess its operations, they have eliminated one position in the Engineering Department and two in the Stadium Operation Department. The proposed shared stadium expense budget has also been updated to include 20 new security positions that are expected to transition in-house . This transition will help with quality and consistency of security personnel, enhanced operational control and flexibility, and improved customer and stakeholder experience .
The increase in the groundskeeping department proposed budget is related to two anticipated field replacements due to the timing of Non-NFL events.
The increase to the equipment line is due to an increase in software license costs driven by the need for a security system integrator to assess the stadium's security technology
infrastructure.
11 February 25th Study Session Questions
and Res onses (cont .)
Shared Stadium Expenses by Category
FY 2024/25 FY 2025126 V•nonce (S) Vononco (%) (Budget) (Budget) T olal Canpensa1ion $ 5,617,889 $ 6,721 ,479 $ 1,103,790 20% T rlM!I, l.leols 3 E,.enannent 267,152 240,112 (47 ,040) -16% Outside Services 3,100,266 2,236.420 (663,646) -26%
General Supplies 156,256 162,906 6,650 4%
Teleph~ 223,916 315,681 91,765 41%
Equipment 347,880 360,077 12,197 4%
Uriforms 61,081 80,974 19,893 33%
0111 .. 1,3,631 73,351 9,720 15%
SubtOIM 9,857.873 10,191,002 333,129 3%
lri:5V1iltlc-e 3,417.000 3,530,000 103,000 3%
MS!U!Qfff!cnl fre: 269,000 = ,ooo 8.000 3%
To<al $1 3,553.873 $13 ,998,002 $ - .129 3%
Shared Stadium Expenses by Department
FY 2024/25 FY 2025126 Varlonoo ($) Vorlonco (%)
(Bud!!!!! (Budll!t!
Sectrly $ 1,601 ,668 $ 1,904,942 $ 303,274 19%
Stadi..m Operations 3,383,947 3,498,837 114,890 3%
Ergneering 3,935,208 3,751,772 (183,436 ) -5%
Guest Services 620 ,562 485,626 (134,936) -22%
Groll'ldskeeping 316,468 549,825 233,337 74%
Insurance 3.427,000 3,530,000 103,000 3%
Manogerne,uFee 269,000 277 ,000 S.000 3%
Total S1:l,553,873 S 13,998, 002 s 4",1 29 3%
23 February 25th Study Session Questions
and Res onses (cont. )
Question: It has been stated that there
are no FIFA World Cup 2026 and Super
Bowl LX costs included in the Stadium
Authority budget, however at another
meeting it was mentioned that some
costs will be billed to the Stadium
Authority. Where are those costs in the
Stadium Authority Budget?
24 Response: There are no direct event costs associated with the FIFA World Cup 2026 and Super Bowl LX included in the
proposed budget. The Board has approved an Assignment and Assumption Agreement for FIFA matches which covers and guides how event (including pre- and post-) costs will be reimbursed and/or funded by other governmental agencies. As a part of the Agreement, if certain preliminary costs are not able to be reimbursed by other governmental agencies, the costs ( est. at $148,930) will be covered by the Stadium Authority. These costs are not currently included in the proposed budget. Additionally, the Assignment and Assumption Agreement does not charge the Bay Area Host Committee for normal and customary personnel charges that are budgeted to the Stadium Authority on an annual basis. Staff is currently negotiating with the Bay Area Host Committee and the San Francisco Forty-Niners on Super Bowl LX agreements.
12 February 25th Study Sess ion Questions
and Res onses (cont. )
Question: Please compare the 10-year
projection with Rent Arbitration Exhibit
J.
25 Santa Clara Stadium Authority
10-Year Forecast Corrparlson with Rent Arbilration Exhibit J General Fund Impact
(In mUN ans)
ASCII Y•r 2025126 2026J77 2027/28 2Q2BIZI ~o 2D31YJ1 2DJ1l32 ~ 2033JJ4 2G:l4i35 Lw's® Slildlum Yearof0ptn1iom: 12 13 1-4 111 1S 17 18 18 20 21 10-Ymr Fonicast
Grnmd Reill - Base 1 00 s 1 00 s 1 00 s I 00 s 110 s 110 s 110 s 1 10 s 1 10 s 1 20 Gro.Jnd Rent - Pertamaxe 413 215 285 253 231 235 2JJ 254 261 274 SenuYrun, Fee 027 027 027 027 027 027 027 027 027 o:,:, ~iR£!!l!:!t 282. za J~ , .. ) 40 ..ui ;, 1.&J • 2l i~
'IO-Y•r Pclncnt Tcml ~ O~;:;;i &ffl 1 786 ~ ~ I 72§ $ 1&1 J 10oe i g~ 1 .a:m ~ •!!l R_,t Amtndon Exhlbn J
Gra.md Renl • Base s 1 00 s 1 00 s 1 00 s 100 s 110 s 110 s 110 s 110 s 1 10 s 120 Gra.md R~t - PE'ffcmi.n:e 2 96 3 06 317 328 33S 346 358 3 71 3 83 392 SerntrYoutn Fee 0 23 0 23 023 023 023 023 023 023 023 023 ~1{£i:'i;~
""' .,, 6?2 501 103 (i 27 ~ 31 .. ,
Rlrd:ArtlltrdonExftflllt:J'R>'III l !<!I! l •:ii!! I'. 2!1! $ Uf!,! J ,,n i · 1fJ! :i 1Ui! 1 10a, I ~.n ·1, IOO:Z 10-Ymr FonicasrR-,t Arbltr.lUon Exhibit J C0mp.,r1son
GrounCI Rent - Base s s s s
Gmmd Rent - PerlClmaice 117 (O!l1) (032) (0 75) (104) ( 11 1) (IU) (117) (I 19) (118) seno-Yruth Fee 0OJ 0OJ 0OJ 004 004 004 oo, 004 0OJ 007
-·-
2&! 2 :,,; IC'l Q5\ Q:>1! flt i11!b 0.'12 0 ,, 01} ~711 10-Yau-~AIIHlnrlon:EttfDIIJCl:lnlllmttDCI I "-m 1 l;!i l {1~:I rum 1 f! l3 J aa1 (.Q71} I fli§l s IZ!lil I 11,IIIZl February 25th Study Session Questions
and Res onses (cont. )
Question: Who selected the marketing
consultant and what will they be looking
at?
26 Response: Staff conducted a competitive solicitation process and released a Request for Proposals. Subsequently, City/SCSA staff selected the marketing consultant without consultation with Manco or other outside entities, as the contract is with the Stadium Authority and the sole client is the Stadium Authority. The review includes analyzing current marketing strategies, evaluating marketing and branding elements for consistency and impact, reviewing media plans for efficiency and Return on Investment (ROI), and interpreting performance data.
13 27
Recommendation
1. Review and provide input, or possible Board action, on the Proposed Santa Clara Stadium Authority Fiscal Year 2025/26 Operating, Debt Service, and Capital Budget, Proposed Stadium Authority Budget, Compliance and Management Policies, and 2025 Levi's Stadium Events Marketing Plan
Santa Clara Stadium
Authority
Study Session
Proposed Santa Clara Stadium Authority FY 2025/26
Budget, Compliance and Management Policies, and
Marketing Plan
Item #2.A (25-263)
March 4, 2025
14