49ers Stadium Issue: Delayed Due To Labor Issues

Yesterday, Matt Barrows posted an interview he conducted with 49ers President and CEO Jed York and it included some intriguing comments related to the 49ers stadium situation:

Looking at the financing markets, talking to our investment bank, the big thing that's coming out right now - the economic arrangement between the NFL and the player's union are going to directly impact the ability for teams to finance and the league to finance new stadiums. And I think there's a chance that this stadium is delayed from '14 to a '15 opening because of that.

Naturally some folks are skeptical about all this. However York's comments about the labor issues are in fact perfectly reasonable. The San Jose Mercury News posted an article as well, and for those who read that, but not the Barrows interview, I strongly recommend you check out Barrows' piece as it provides a bit more from the horse's mouth.

The labor issues play a significant role in the stadium's viability because of the G3 fund. The G3 fund was set up by the NFL as a way to provide low interest loans (they might actually be no-interest) to NFL teams that are building stadiums. Teams can get upwards of $150 million towards their stadium to go towards their stadium and the loan is then repaid with the visiting teams' share of club seat revenue once the stadium is done.

The problem right now is that due to a bunch of new stadiums (most notably the Giants/Jets stadium) the fund is basically empty. Part of the collective bargaining negotiations includes addressing the G3 fund and what kind of program the league will use (if any). Until that gets sorted out, that leaves upwards of a $150 million hole in the 49ers budgeting process.

Now I certainly can't say with any level of confidence that a new stadium will be built for the 49ers in Santa Clara or anywhere in the Bay Area. I certainly want it to happen, but who really knows what will happen in the coming years. At the same time, I can accept that the labor negotiations will in fact play a part in any Bay Area NFL stadium's potential success.

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