May 01, 2007

Noll finds hole in Niners finance plan

Sports economist Roger Noll points out a potential fly in the ointment of the San Francisco 49ers' proposed Santa Clara stadium finance plan: While $330 million in stadium bonds would be scheduled to be paid off by stadium revenues like seat licenses and naming rights, who would be left holding the bag if those revenues fell short? "The crucial thing is, where does the ultimate obligation lie with the bond issue?" Noll told the San Jose Mercury News. "[If the 49ers] were responsible for the bond issue, then it would be their problem. If the deal is that the stadium authority is responsible for the bond issue, and the city is responsible for the stadium authority, then it's Raiders all over again."

Asked by the Merc News what would happen if stadium revenues tanked, 49ers CFO Larry MacNeil reassured that bond issuers "are going to require reserves in place to cover debt service in the event ticket tax falls short or naming rights fall short, or something else falls short. But would it impact the city's general fund? No." And where would these reserves come from? That question, the 49ers said, was "premature." How presumptuous and impatient those journalists are, asking questions about financing details just because the team has issued a financing plan.