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49ers New Stadium: Los Angeles Stadium, Farmers Insurance Naming Rights & Redevelopment Money

The 49ers stadium woes have flown under the radar the last few months, but some outside developments could bring the topic back to the forefront. Or at least it's bringing it back to the forefront here at Niners Nation. There are two bits of news, one related to a potential Los Angeles football stadium and one related to Governor Jerry Brown's plans in regards to redevelopment agencies. The big news recently was the announcement that Farmers Insurance has agreed to pay $700 million over 30 years for the naming rights to a potential Los Angeles football stadium. For a billion dollar stadium, that would cover a monster portion of the costs. Even with cost overruns you're looking at more than half the deal being covered just by naming rights.

While teams like the Dallas Cowboys and New York Giants and Jets can't get naming rights done for their existing stadiums, a hypothetical stadium in LA is well on its way to being financed. This is the kind of naming rights deal that was happening with regularity in the late '90s, but dissipated when the dot-com bubble burst. At first glance this seems like crazy money, but given the location it could actually make a lot of sense. The hypothetical stadium is planned for down near the Staples Center.

Once its built, I can only begin to imagine the number of major events it will host outside of just football games. While the Cowboys and Giants/Jets can be considered either marquee franchises or in important media markets, they're still in Dallas and New Jersey. Whether you like LA or not, it's a major location, and a location near the Staples Center would be perfect for media attention. As long as the Giants/Jets are in the Meadowlands, you could argue they're squandering some of their NY media potential.

If our San Francisco 49ers are going to finance a sizable chunk of their stadium (as they'll need to do), a big naming rights contract is pivotal. It wouldn't reach the levels of the Farmers' deal, but it would need to bring in some decent cash. I think there is the chance for a Silicon Valley company to get in on it (Oracle anybody?) but it remains to be seen how much money such a deal could bring in for stadium payments.

Even if the 49ers have trouble finding the money, I don't think the LA stadium is as much an issue for them (and we as fans) as it would be for the San Diego Chargers and their fans. The Chargers and the NFL remain insistent on trying to get something done in San Diego, but it's looking less and less likely with each passing day. It seems like they're square in the cross-hairs of Los Angeles at this point. That doesn't meant the 49ers wouldn't remain an option, but I think the Chargers San Diego heart monitor is closing in on a flat-line.

Redevelopment Money
A second issue of significance is a more recent development courtesy of the new California governor, Jerry Brown. Governor Brown announced recently that he was planning to disband the various redevelopment agencies in California and use that money to help fund other budget items during the state's on-going fiscal crisis. Southern California Public Radio's website has a good article describing how RDAs operate and explains how property taxes fund them.

For the purposes of the 49ers new stadium, up to $40 million of the potential financing was going to come from the Redevelopment Agency in Santa Clara. It's only a small portion of the potential billion dollar stadium but in these hard economic times, every penny counts. Some cities have begun spending what money they've got before it gets taken away, but that's not exactly the best option for the 49ers and Santa Clara right now.

The 49ers have a framework for financing, but until the G3 fund is figured out in a new CBA, financing will remain an issue. The team will look to use personal seat licenses and naming rights to pay for a stadium, but the low interest (might actually be no interest) league loans from the G3 fund are crucial for teams looking to get a stadium built. You don't just throw a billion dollars together and call it a day. The money will be coming from numerous sources and the NFL's G3 Fund will likely need to be a part of that. Consider it one more reason to hope for a quick resolution to the labor strife.