REPORT TO STADIUM AUTHORITY BOARD
SUBJECT
Title
Action on Stadium Manager’s Request to Negotiate and Execute a Licensed User Agreement with Ticketmaster for Ticket Sales Services for Non-NFL Events at Levi’s Stadium
Report
BOARD PILLAR
Ensure Compliance with Measure J and Manage Levi’s Stadium
BACKGROUND
Ticketmaster L.L.C (Ticketmaster) is a ticket sales and distribution company that has provided exclusive ticket sales services for Levi’s Stadium Non-NFL Events since 2014. On August 12, 2014, the Forty Niners Stadium Management Company LLC (Stadium Manager) and Ticketmaster entered into a Licensed User Agreement for an initial five-year term, from March 1, 2014 through February 28, 2019. The Licensed User Agreement allowed for the automatic renewal of one successive one year period after the initial term. Additionally, on February 21, 2018, the Stadium Manager and Ticketmaster entered into a Levi’s Stadium Ticketing Term Sheet that provided terms of an amendment to the Licensed User Agreement for a five-year term from April 1, 2018 through March 31, 2023.
Through the original Licensed User Agreement and Levi’s Stadium Ticketing Term Sheet, the Stadium Authority generates revenue from ticket platform fees per order, (e.g. a shopping cart that contains one or more tickets), for Non-NFL Events. The ticket platform fees have generated revenue for the Stadium Authority in the amount of $22,667,119 between Fiscal Years (FY) 2014/15 and 2023/24 and approximately $3,764,577 so far in FY 2024/25 (through the July 2, 2024 Non-NFL Event) in ticket platform fee revenue. This information is included in the Stadium Authority’s quarterly financial status reports to the Stadium Authority Board.
The table below summarizes the Stadium Authority’s ticket platform fee revenue by FY:
* No revenue was generated in FYs 2020/21 and 2021/21 due to the COVID-19 Pandemic.
** FY 2024/25 revenue is for Non-NFL Events that occurred between April 1-July 2, 2024.
The Stadium Manager is requesting approval to negotiate and execute a new Licensed User Agreement with Ticketmaster for Non-NFL Event ticket sales services for a ten-year term, effective April 1, 2023 through March 31, 2033. Once executed, the proposed Licensed User Agreement will supersede and replace the original Licensed User Agreement and Levi’s Stadium Ticketing Term Sheet.
DISCUSSION
Competitive bidding is not required pursuant to Santa Clara City Code (SCCC) Chapter 17.30 (Stadium Authority Procurement Policy) and (SCCC) Section 2.105.280(b)(2) (Single and sole source procurements) as the current sales process is complex and well established, and changes in the ticket sales platform will result in significant service disruptions. The NFL also has an agreement with Ticketmaster for ticket sales services for all NFL events. Having one centralized ticketing system for all stadium events provides for the seamless operations of ticket sales at the Stadium.
The proposed Licensed User Agreement will include the following key terms:
• Term: An initial ten-year term that is effective April 1, 2023 through March 31, 2033.
• Exclusivity Rights: Grants Ticketmaster the exclusive right to sell, as the Stadium Manager’s exclusive agent, all Tickets for the Sellable Capacity for every Attraction, via any means and methods including but not limited to, the Internet, telephone, computer, IVR, television, clubs, or outlets. “Attraction” is defined as a concert, sporting, entertainment or other ticketed act or event of any kind or nature to be held at Levi’s Stadium that is open to the public, other than any San Francisco 49ers home game or other NFL-related event.
• Global Events: The exclusivity rights described above will not apply to Global Events when it is mutually agreed that a promoter or third-party organization requires the Stadium Manager to utilize a ticketing platform or service other than as provided by Ticketmaster. "Global Event” means the 2026 FIFA World Cup or other mutually agreed upon major international event to be held at Levi’s Stadium, consistent with past practices of the parties.
• Fees: In consideration for Ticketmaster’s services, Ticketmaster is entitled to assess and receive certain charges and fees. Payment authorization and processing fees for tickets purchased with credit cards, debit cards, gift cards or any other methods of payment via Ticketmaster distribution channels will be passed on to the Stadium Manager. Additionally, in connection with the Stadium Manager’s sales of Tickets utilizing electronic payments and authorized via TM Charge using either Visa or MasterCard, Ticketmaster’s credit card processor will deduct the merchant fees in an amount set forth in Exhibit A for transactions processed on a daily basis.
The confidential and proprietary financial terms will be included in the Licensed User Agreement’s Exhibits upon final agreement with Ticketmaster. Those terms will include the fee structure for tickets for Non-NFL Events at Levi’s Stadium, and will vary based upon the type of ticket being purchased. Further, the terms will include any processing and delivery fees. Finally, the revenue share of fees collected by Ticketmaster will be included in the exhibits as well.
The expectation is that the new terms restructure how platform fees are applied. In the new agreement, platform fees will be applied to each ticket purchase (i.e. every individual ticket). As stated above, the previous terms applied platform fees to each ticket order (e.g. a shopping cart that contains one or more tickets). All other financial terms in the agreement will be substantially similar to the existing terms between the parties, resulting in consistent revenues to the Stadium Authority in line with previous years.
• Advertising: Grants Ticketmaster the right, in Ticketmaster’s reasonable discretion, to advertise, in any medium determined by Ticketmaster, including on the TM.com Website or affiliated websites, Attractions and the availability of tickets at Levi’s Stadium Box Office and via Ticketmaster distribution channels, and the availability of the Software and, in connection therewith, to use the name and logo of Principal, the Attraction (provided, any use of the logo of an Attraction shall be subject to approval of the promoter of the applicable Attraction), Levi’s Stadium and all other information respecting the Attractions.
Staff would like to note that a civil antitrust lawsuit has been filed against Live Nation Entertainment Inc, and its subsidiary Ticketmaster LLC for monopolization and other unlawful conduct that thwarts competition in markets across the live entertainment industry. However, at this time, Ticketmaster has not been convicted of violating any federal antitrust laws or regulations. The Ticketmaster Agreement will include a severability provision that provides that if any provision is found to be valid or unenforceable, the parties will replace such provision with one or more valid and enforceable provisions approximating the original provision as closely as possible. The Agreement will also include a termination provision that allows for it to be terminated for material default or material breach 30 business days after the receipt of a written notice of default. Should Ticketmaster be unable to cure such default, the Agreement would be automatically terminated.
Staff recommends approval of the Stadium Manager’s request to negotiate and enter into the proposed Licensed User Agreement with Ticketmaster for ticket sales services for Non-NFL Events at Levi’s Stadium.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment.
FISCAL IMPACT
As noted above, the financial terms that will include the fee structure for tickets for Non-NFL Events at Levi’s Stadium are confidential and proprietary. The fee structure will vary based on the type of ticket being purchased. The terms will also include any processing and delivery fees. Finally, the revenue share of fees collected by Ticketmaster will be included in the exhibits as well. The expectation is that financial terms in the agreement will be substantially similar to the terms in the original Licensed User Agreement which will result in consistent revenues to the Stadium Authority in line with previous years.
COORDINATION
This report has been coordinated with the Stadium Authority Counsel and Treasurer’s Offices.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov>.
RECOMMENDATION
Recommendation
Authorize the Stadium Manager to negotiate and execute the Licensed User Agreement with Ticketmaster for ticket sales services for Non-NFL Events at Levi’s Stadium for a term of ten-years, terminating on March 31, 2033, subject to final form approved by the Stadium Authority Counsel.
Staff
Reviewed by: Chuck Baker, Assistant Executive Director
Approved by: Jovan D. Grogan, Executive Director
ATTACHMENTS
None