Stadium authority declines sole‑source Fanatics merchandise deal after board debate

The Santa Clara Stadium Authority on Tuesday declined to approve a four‑year, sole‑source event services agreement with Fanatics Retail Group Concessions LLC for merchandise concession services at non‑NFL events, after members said staff did not provide sufficient financial detail or public audit rights.

Board members said staff had privately reviewed market comparables but did not provide those confidential analyses to the board. Assistant City Manager Chuck Baker, who answered questions for stadium management, described the proposed contract as a shift to a profit‑sharing model that “ties their fee to the net profits and does not allow them to pad expenses.” Baker said the change would “incentivize them to generate maximum profits, which we would split with them.”

Several board members pushed back on the sole‑source justification and the absence of verifiable numbers. Board Member Jane asked where the comparative financial information was and noted the staff report did not include specific proposals for Levi’s Stadium. “Without any information. I can’t say that it is because it didn’t go to bid,” the chair said during the discussion. Board members also asked whether the stadium authority would have practical audit or oversight rights if the stadium manager administered the contract.

Stadium counsel and staff said the contract contains audit provisions allowing the stadium manager to audit the contractor’s books and require the contractor to pay for audits when discrepancies exceed five percent, and that the stadium manager administers the contract on the authority’s behalf. Staff said they could provide confidential market comparisons to the board outside of public session if members requested them.

Opponents of the sole‑source award cited the lack of public benchmarks, the absence of a competitive process and limited direct audit oversight by the stadium authority. Supporters argued the vendor is vertically integrated and provides a turnkey, nationwide service that would make non‑NFL merchandise operations more consistent and potentially more profitable for the authority.

Authority Member Gonzales moved to approve the agreement; a second was recorded. The motion failed when the board voted; the transcript records the item as “failed” but does not record a public roll‑call tally in the meeting record.

Staff said it will return to stadium management to explore next steps and will request that the stadium manager attend any future discussion of this item to answer follow‑up questions in person.