REPORT TO STADIUM AUTHORITY BOARD AND CITY COUNCIL
SUBJECT
Title
Action on a Proposed 10-Year Extension to the Stadium Naming Rights Agreement with Levi Strauss & Co., a Related Implementation Agreement with Forty Niners SC Stadium Company LLC (StadCo), and Delegation of Authority to the City Manager to Implement a Charitable Grants Agreement
Report
BOARD PILLAR
Ensure Compliance with Measure J and Manage Levi's Stadium
BACKGROUND
On May 9, 2013, the Santa Clara Stadium Authority (Stadium Authority) and Levi Strauss & Co. (Levi's) entered into a Naming Rights Agreement. Under the 20-year agreement, Levi's provides an annual payment to the Stadium Authority in exchange for exclusive naming rights and branding at the stadium.
Levi's also has a separate sponsorship agreement with Forty Niners SC Stadium Company LLC (StadCo) which includes digital content, merchandise collaborations, among other things, that the Stadium Authority Agreement is not a party of.
The existing Naming Rights Agreement between the Stadium Authority and Levi's includes the following key terms:
* Naming Rights Payments: In consideration for its naming rights, Levi's is obligated to make annual payments to the Stadium Authority increasing at the rate of 3% per year. The payment in Year One was $5.74 million. In the current year (2023-24), the annual payment is $7.6 million. This equates to $154 million of payments over the initial term of 20 years. These payments go into the Stadium Authority's "operating fund" and are used to support stadium operations, maintenance, and reduction of the Stadium Authority's debt from the initial stadium construction.
* Extension Right: Levi's had the option to extend the term for an additional five (5) years by delivery of written notice no later than the last day of the fifth contract year. The extension right expired on May 10, 2018.
* Right of First Negotiation: Levi's has until May 9, 2030 to notify the Stadium Authority of its intention to nego...
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