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Santa Clara City Council concerned about 49ers attendance

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I think they’re probably overreacting, even if the no shows are an embarrassment to the 49ers.

The San Francisco 49ers have a bit of a turnstile problem. As the team continues to struggle, more people are likely to want to stay home. Levi’s Stadium is sold out, and while plenty of people will sell their tickets on the secondary ticket market, there will continue to be quite a few no-shows.

Sunday was no exception, with some anecdotal evidence that the stadium was 60 to 70 percent full. It looked more full than the previous Thursday Night Football game, but there were still a fair number of empty seats.

We’ll never get confirmation of that number since teams are not inclined to release turnstile numbers. But we can see the number of empty seats during the game. Some of them are people staying inside the various clubs in the stadium, but plenty are people simply choosing to eat the cost of their ticket.

The team’s struggles have left fans plenty pissed off. Santa Clara mayor Lisa Gillmor pointed to that in a recent ABC 7 News report. Specifically, she raised the concern about people choosing to default on their Stadium Builders’ Licenses (SBL):

"How many will default on their tickets? We've seen a large amount that have defaulted already. How many will continue to default if the team is not managed properly and they're not being successful out on the field."

She says tickets, but given the context of things, I’m pretty sure she is talking about the SBL. In order for fans to purchase season tickets, they had to purchase an SBL. The SBL is a lifetime purchase. Technically a person does not need to buy season tickets with it, but according to the SBL contract, if a person does not purchase season tickets in a given season, they forfeit their rights to that seat moving forward. I imagine they would be able to get new seats if they wanted, but if they don’t buy season tickets, they’re left with the rights to buy tickets to some concerts, college football games, and other events. They are not required to buy season tickets, but they are in a position where they are likely to keep buying season tickets, or re-sell their SBL.

If Gillmor is talking about no shows to games, “a large amount” could be a fair characterization. If she is talking about SBLs, I have a feeling she is exaggerating to some extent. There has been talk from some fans about abandoning their SBL, but all indications are that few are actually following through on that.

The city of Santa Clara earns money on tickets sold, not on those in attendance. Additionally, the lease shows that concessions and parking revenue at NFL games go to the 49ers. I don’t know the exact splits, but the lease distinguishes between stadium authority events and revenue, and tenant events and revenue. The 49ers are the tenant, and their primary events are the football games.

The decline in the turnstile attendance is certainly taking money out of the 49ers pockets. There is something called a “per cap,” which is how much money a team makes per person in attendance. It covers things like parking, concession, and merchandise sales. The lower the number of people showing up for games, the less money being spent on the many ancillary revenues. The 49ers lease for the stadium has NFL event concessions and parking going into their pockets, while the stadium authority earns concessions and parking for a variety of non-NFL events.

These lost revenues are not going to put a particularly big dent in the balance sheet because they are not the primary revenue drivers for the franchise. SBLs and naming rights were the first big revenue drivers, and ticket sales (regular and luxury suites) are the big one now. There are obviously huge sponsorship deals as well, so a decline in attendance could eventually impact those down the road when it comes time for renewal.

For the time being, I don’t think we are going to see enough of an impact to raise actual financial red flags. It is embarrassing to have a stadium missing a sizable chunk of people on a weekly basis, and I don’t doubt that will continue this season and probably into next season. But for now it is an embarrassment more than it is a financial issue.