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John Oliver explains shadiness of stadium financing with public money

The Oakland Raiders, St. Louis Rams and San Diego Chargers are all in the midst of trying to find new stadiums. They have all been speaking with their own city, but they are also looking at Los Angeles as an option. L.A. has long been a city teams use as a threat if their own team will not provide sufficient funding. Teams are essentially able to extort their home city for public funding on a stadium. That's not to say all politicians are blame-free, but billionaire owners are often getting a free ride.

John Oliver put together a great segment on the subject last night in his show Last Week Tonight. He does a great job each week breaking down subjects that can often be rather complicated. I think more people have gotten a better understanding of the shadiness of public financing and stadiums, but Oliver does a good job nonetheless.

The San Francisco 49ers stadium is a mix of public and private money. The 49ers end up providing the revenue for most of the financing, but they are still getting public benefits. The stadium cost approximately $1.3 billion to build. Around $114 million (give or take) is coming from the city/county of Santa Clara. That included replacing an electrical substation, building a parking garage, and other things, broken down here.

Where it gets tricky for some is in the majority of the loans for the stadium. The Santa Clara Stadium Authority is a public group that handles stadium matters. Technically they took out something on the order of $800 million in loans. That link above lists out $933 million, but I am not sure what makes up the additional $133 million. Whatever the case, while the loan is held by the Stadium Authority, the payment for it is coming from the 49ers in the form of stadium builders' licenses, naming rights and more. That link above lists $312 million in SBL money, but the team ended up making over $500 million in SBL money. The team is also paying $24.5 million in annual rent to use the stadium.

The 49ers were not going to get much in the way of public financing in California, given that they were looking at a new stadium during a recession. With the economy working its way back, we now see the Chargers and Raiders trying to get whatever public money they can. While it is good to see the 49ers having to pay off most of the stadium cost, if they had worked out their deal earlier in the 2000s, or were doing it now, I am sure they would have pushed for more public money. So let's not pretend this was some altruistic motive on their part. Whatever the case, the stadium is done, and we can move on.

But give the video up above a view. It is a great rundown of the extortion that frequently happens with new stadiums.