Economists blast 49ers’ report on Levi’s Stadium’s local impact

A report commissioned by the San Francisco 49ers that presented Levi’s Stadium’s impact on the local economy in a glowing fashion is receiving significant pushback. 

The 49ers released an economic impact report Monday that claims Levi’s Stadium has generated “more than $2 billion” for the local community since it opened in Santa Clara in 2014.

“This is not how economists measure economic impact,” Bradbury posted. “… It’s not credible and no one should take it seriously.” In particular, Bradbury argued, the study mischaracterizes the degree of the stadium’s financial impact and used a flawed methodology.

The study was conducted by Daniel Rascher, who runs the sports management program at the University of San Francisco and is the founder and president of SportsEconomics, the company retained to conduct the analysis. 

Rascher’s study primarily focused on the spending that comes from out-of-town visitors to the region for events at Levi’s. It also looks at the “induced” effects of the stadium, which include increased local earnings and employment, as well as the taxes collected in the local region. 

The report’s key assumption is that locals would be spending money in Santa Clara no matter what, but the people coming to Levi’s from other places would not be, were it not for the stadium. Consequently, the study excludes “spending by local spectators and revenue generated by local sources.”

Rascher further acknowledges in the report’s executive summary that his analysis “does not account for any costs to the community such as from congestion, opportunity costs of having used the land in alternative ways, direct out-of-pocket costs to the local community or local government involving the construction of the facility, hosting events, or any other costs.”

The study says that Levi’s Stadium has generated approximately $470 million in tax revenues for local communities, such as Santa Clara County and the cities of Santa Clara and San Jose. But there is no analysis of the costs incurred or a net revenue, or profit, laid out in the report.

Bradbury said that Rascher’s report defies conventional wisdom about economic measures in its use of attendee surveys.

“If you are a scholarly researcher, then you should be interested in participating in the ongoing research,” Bradbury posted. “If this [report] is right, the academic consensus is decidedly wrong. If Rascher believes this, then he has an obligation to publish through peer review. Show us we’re wrong.”

Bradbury admitted his critique of Rascher and the report may seem harsh, but he believes it is necessary because of the harm that a commissioned, non-peer-reviewed report can cause.

“This is doing real damage, taking advantage of people’s understandable ignorance to trick them into thinking that something they want to believe is true, for a fee,” he wrote. “Someone has to call it out. This isn’t just some professional disagreement.”

Bradbury’s criticism was echoed by Roger Noll, an economics professor at Stanford, who told Bay Area News Group that the study “does not measure the net benefits to Santa Clara, city or county, from having the stadium.” Noll specifically noted the exclusion of impact analysis on local spectator spending, arguing the premise of the study is “misleading.”

After the report was released Monday, Gillmor released a statement that alluded to her ongoing fights with the football team.

“The economic benefit of Levi’s Stadium should be positive,” Gillmor said in a statement, which she also posted on X, formerly known as Twitter. “But 49er management team has paid zero dollars in non NFL event revenue for years. They haven’t complied with our laws & agreements according to independent audits & a Grand Jury report.”

A spokesperson for Levi’s Stadium defended the study in a statement to SFGATE.

“Economic impact reports specifically study the dollars that flow into the community, the number of jobs created and the wages earned,” they wrote via email. “This week’s economic impact report shows that workers in the area earned more than half a billion dollars as a result of events at Levi’s Stadium. A complete accounting of expenses can be found in reports regularly delivered to the Stadium Authority.”

Asked by SFGATE if there was a response to Gillmor, the spokesperson wrote, “According to the experts who developed the report, the City of Santa Clara has brought in $35 million dollars in taxes and fees as a result of Levi’s Stadium to fund City services.”

The spotlight is expected to continue to shine on Levi’s Stadium in the years ahead, as the 49ers are set to host the Super Bowl in 2026 and multiple FIFA Men’s World Cup matches that same year. With each major event that comes to Santa Clara, the fight between the team and the city seems to only get more vicious.