By Robert Haugh

Santa Clara’s deal to host the 2026 Super Bowl and World Cup at Levi’s Stadium is drawing warnings from leading sports economists who say Santa Clara taxpayers could be exposed to millions in hidden costs.

The Bay Area Host Committee (BAHC), a nonprofit created by the 49ers, is responsible for reimbursing the City’s expenses. 

Due to Measure J, a Santa Clara law that prohibits spending city tax dollars on stadium events. So, the BAHC is responsible for all FIFA and Super Bowl costs. 

But the group has struggled to raise money and has refused to disclose its fundraising totals. 

The problem is that the nonprofit has no assets. That’s why the 49ers agreed to backstop the FIFA deal with TeamCo, the company that includes the NFL team.

But for the Super Bowl agreement, the City Council will review a contract tonight that has StadCo, not TeamCo,  as the backstop.  

Some leading national sports economists are warning about the major elements of the deal that’s coming before the Council tonight for approval.

Geoffrey Propheter, an associate professor at the University of Colorado Denver and a leading researcher on stadium finance, questioned the city’s reliance on the 49ers’ “approved expenses” language.

“I am particularly concerned about the statement that the 49ers will reimburse the city for ‘approved expenses,’ with the 49ers seemingly being the judge of what is approved,” Propheter said.

Propheter also said that the choice of guarantor matters.

“If the guarantor route is the way the city wants to go, the deeper the pockets the better. That means TeamCo is a safer guarantor, and it’s not even close,” he said.

He added that the city auditor should calculate the potential litigation costs if disputes arise.

“I would be curious for the city’s auditor to price out litigation costs and to compare those to the probability of receiving zero reimbursement,” Propheter said.

Michael Leeds, a professor at Temple University and co-author of The Economics of Sports, echoed the concerns.

“I agree completely with the statement that ‘the devil is in the details.’ I am particularly concerned about the statement that the 49ers will reimburse the city for ‘approved expenses,’ with the 49ers seemingly being the judge of what is approved,” Leeds said.

Leeds warned that major events like the Super Bowl almost always leave cities footing higher bills than anticipated.

“Santa Clara should take whatever measures it can to cover itself, as mega-events such as the Super Bowl almost invariably have costs that are higher than predicted and local impacts that are lower than predicted,” he said.

Editor’s Note:  

• Geoffrey Propheter is an associate professor at the University of Colorado Denver and a leading academic voice on the economics of public stadium financing. His research, which often questions the economic benefits of such projects, is frequently cited by major media outlets, including The New York Times, The Washington Post, and The Economist.

• Michael Leeds is a Professor of Economics at Temple University and a co-author of the textbook “The Economics of Sports.”  His findings on topics such as bias in the NFL draft are frequently cited by media outlets, including ESPN, The New York Times, and FiveThirtyEight.