Santa Clara signs off on key FIFA World Cup contract, shifting financial risk to the Bay Area Host Committee
With the FIFA World Cup a little over a year away, the Santa Clara City Council has signed off on a key agreement that would shift the financial risks of putting on the event to the Bay Area Host Committee, with the San Francisco 49ers serving as a financial backstop if the nonprofit sports group can’t pay.
The publicly owned Levi’s Stadium is one of 16 venues in North America being used for the 2026 men’s soccer tournament and will host six matches between June 13 and July 1. It marks the first time the World Cup has returned to the Bay Area since 1994 when it was held at the old Stanford Stadium.
While large sporting events like the Olympics or the Super Bowl can have economic benefits for the surrounding host region, they are often money losers for organizers because of the costs that come with putting on the event.
In the early hours of Wednesday morning, the council voted 5-2 on the “FIFA World Cup 2026 Assignment and Assumption Agreement,” with Mayor Lisa Gillmor and Vice Mayor Kelly Cox casting the dissenting votes and raising concerns about whether the contract is in compliance with Measure J. The 2010 ballot initiative, which brought the stadium to Santa Clara, laid out taxpayer protections that guarded the general fund from being dipped into for stadium-related expenses.
“There are cracks in this agreement that open the door for our general fund,” Gillmor said. The mayor wanted an outside attorney to review the agreement to ensure they were following Measure J.
But the top two city officials — City Manager Jovan Grogan and City Attorney Glen Googins — disagreed.
The agreement makes sense for an event that is projected to be a “net loss,” Googins said.
“We were very purposeful in identifying these risks and endeavoring to have provisions built into the contract that addressed those risks and to mitigate them to the extent possible,” he said.
The Bay Area Host Committee, a nonprofit that has been leading the charge in bringing major sporting events to the region this year and next, will take over all obligations, which includes event costs, public safety costs and stadium improvements — a number estimated to range from $45 million to $50 million. In exchange, the host committee will receive about $13.5 million from FIFA as a rental fee.
Some event expenses will be paid in advance to the city, with 50% due by May 1, 2026 and then another 25% due by June 22, 2026. The final invoice will be submitted by Sept. 18, 2026 and paid within 60 days.
If the Bay Area Host Committee, which is privately raising money, can’t cover all costs, the 49ers have agreed to step in. Jihad Beauchman, the team’s executive vice president and general counsel, called the deal “unparalleled” compared to other host city agreements.
“The 49ers, because we believe in these type of events and believe in their ability to bring people together, are offering to guaranty for this event,” he told the council.
If the 49ers do have to step in and act as a backfill, a portion of the costs would come from the Stadium Authority — a public agency made up of Santa Clara officials that oversee the venue. The money would come from ticket surcharges and wouldn’t exceed $200,000.
Goggins said that while the city didn’t like the provision, capping the amount was the “most palatable” option. The Stadium Authority is expected to receive a $4 to $6 surcharge per ticket sold, with a projected revenue of $2.16 million. If FIFA decides not to impose the full $6, the host committee has agreed to cover the difference.
Many of Gillmor’s concerns stemmed from the question of what qualifies as reimbursable costs and a provision that says the Bay Area Host Committee can dispute costs. The mayor said she worries any delay in getting reimbursed could create a cash flow issue for the city’s general fund. But Kenn Lee, the city’s finance director, said that cash flow wouldn’t be an issue and that there tends to be a lag in reimbursement for any event at Levi’s Stadium.
Finalizing the agreement has been a multi-year process that raised concerns about transparency as the city fought early on to get access to key documents — at one point they even considered legal action. In September 2023, city officials said they discovered that the 49ers had signed contracts with FIFA around 2017 or 2018 where they made “significant commitments” for the World Cup. At the time, Grogan said it could pose “significant risk” to the city.”
Any city official who wanted access to unredacted copies of contracts was required to sign a non-disclosure agreement. Gillmor, along with former District 1 Councilmember Kathy Watanabe, declined to sign.
In the end, a majority of the council on Tuesday said they felt confident about the agreement and its compliance with Measure J.
“I think staff as a team did take a lot of precautionary measures and did mitigate the risks basically,” Councilmember Raj Chahal said. “We learned, we had multiple issues to be resolved in the past and this is where we landed. I feel very comfortable.”
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