economics at aecom (sports) - voice of san diego€¦ · 04/05/2013 · –qualcomm stadium...

Qualcomm Stadium:Business and Facility Assessment Plan

Project No. 10842876.01

Presented to:City of San Diego

Presented by:AECOM

May 3, 2011

Introduction

• AECOM was retained by the City of San Diego to provide business planning guidance and a facility assessment for Qualcomm Stadium

• AECOM conducted a market and financial evaluation of the Stadium and its associated parking lot based on an analysis of the venue’s current operations, available markets, and comparable and competitive facilities

• During the study, the project team toured the site multiple times, including during the National Football League (NFL) game between the Oakland Raiders and San Diego Chargers on December 5, 2010, and the week following, and interviewed and met with Qualcomm Stadium and City staff numerous times for input and feedback

• This final draft report provides conclusions and recommendations for the Qualcomm Stadium business plan based on three scenarios:– Scenario 1: Chargers stay at Qualcomm Stadium

– Scenario 2: Chargers leave Qualcomm Stadium after 5 years but stay in the San Diego market

– Scenario 3: Chargers leave Qualcomm Stadium and the San Diego market immediately

May 3, 2011Qualcomm Stadium

Table of Contents

Revenue and Event Projection

– Market Analysis Slides

Introduction 5

Local and Regional Market Overview 6-14

Qualcomm Stadium 15-16

San Diego Sports & Entertainment Market 17-22

Benchmark Stadiums 23-29

Conclusions 30-43

– Financial Analysis

Introduction 44-46

Assumed Lease Terms 47

Event Estimate 48-49

Attendance Estimate 50

Projected Operating Profile 51-60

Recommendations 61-68

– Appendix 69-94

Qualcomm Stadium May 3, 2011

Market Analysis


Market Analysis

Introduction

• The operating performance of Qualcomm Stadium is a function of the events hosted in the building and the surrounding parking lots, as well as the markets available to serve it

• In evaluating the historic, current and projected business plan for Qualcomm Stadium, AECOM reviewed the following:

– Local and Regional Market

– Qualcomm Stadium Overview

– San Diego Sports & Entertainment Market

– Benchmark Stadiums

• The Market Analysis provides the basis for the Financial Analysis and Recommendations for Qualcomm Stadium. Based on the analysis, AECOM has derived Conclusions based on:

– Demographic Trends

– Industry Trends


Market Analysis

Local and Regional Market Overview

Overview of San Diego

– The City of San Diego is ranked as the eighth largest city in terms of population in the United States and second largest city in California after Los Angeles

– It is part of the San Diego-Carlsbad-San Marcos Metropolitan Statistical Area (MSA)

– San Diego's top four industries are manufacturing, defense, tourism, and agriculture

– Top employers include: United States Navy; San Diego Unified School District; University of California, San Diego; San Diego County; Sharp HealthCare

Qualcomm Stadium

0

10

20

30

40

50

60

70

80

90

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Deg

rees (

Fah

ren

heit

)

Average Low Average Average High

Source: Weatherbase

– San Diego's climate is characterized by warm, dry summers and mild winters with most of the annual precipitation falling between November and March

May 3, 2011

Market Analysis


Overview of San Diego

– AECOM analyzed the demographics of the resident market in order to understand the markets available to Qualcomm Stadium

– The following slides provide an overview of the following key market demographics covering:

Overview market maps with market areas (segments)

The market areas are segmented by drive times, which calculate average expected speed based on traffic and route, among other factors, using ESRI Geographic Information Systems (GIS) data and AECOM estimates based on San Diego and surrounding area conditions

Population size and growth trends

Household size

Age distribution

Household income


Market Analysis


Drive-time Market

• AECOM analyzed the 0-15 minute, 15-30 minute, 30-60 minute and 60-120 minute markets in order to

assess the primary resident market areas available to serve Qualcomm Stadium

Qualcomm Stadium

Source: ESRI (ArcGIS); AECOM

May 3, 2011

Market Analysis


75-mile Market

• In addition to the 2-hour drive-time market, AECOM also analyzed the 75-mile market, as gauged by a distance ring drawn around Qualcomm Stadium, in order to compare Qualcomm Stadium against other NFL benchmarks (as will be shown in the Benchmark Stadium section of the study)

• The NFL assigns each team in the league a primary market and secondary market, which is typically defined by an area where any part of the market falls within 75 miles of the stadium

Qualcomm Stadium


May 3, 2011

Market Analysis


• Population and Households

– The total market area (0 – 120 minutes driving distance from Qualcomm Stadium) has approximately 16.4 million residents with 5.2 million households

– Within the City of San Diego there are approximately 1.3 million residents with nearly 485,000 households

Qualcomm Stadium


– Qualcomm Stadium’s NFL 75-mile market for broadcasting games is composed of approximately 4.7 million residents with a total of approximately 1.7 households

Available Markets 2010 Population Households

San Diego, CA 1,330,547 483,521

Market Area Drive Times

0 - 15 Minutes 1,346,072 501,294

15 - 30 Minutes 1,106,083 363,518

30 - 60 Minutes 882,614 294,408

60 - 120 Minutes 13,062,421 4,003,846

Total 16,397,190 5,163,066

75 Mile NFL Ring 4,727,290 1,657,573

May 3, 2011

Market Analysis


• Age Distribution

– The median age of market area residents ranges from 32.2 to 36 years

0 – 15 minute market area: 33.4 years



60 – 120 minute market area: 32.2

– The California and United States median age is 34.4 and 37 years respectively

Qualcomm Stadium


Drive-Time Rings

San Diego 0 - 15 mins 15 - 30 mins 30 - 60 mins 60 - 120 mins Total

% % % % % %

Population by Age (2010)

0 - 4 years 90,898 6.8% 94,427 7.0% 78,033 7.1% 67,759 7.7% 1,079,503 8.3% 1,319,722 8.0%

5 - 9 years 84,293 6.3% 85,526 6.4% 77,463 7.0% 64,697 7.3% 1,021,557 7.8% 1,249,243 7.6%

10 - 14 years 76,338 5.7% 75,689 5.6% 75,353 6.8% 61,656 7.0% 915,228 7.0% 1,127,926 6.9%

15 - 19 years 96,398 7.2% 94,544 7.0% 81,226 7.3% 64,599 7.3% 1,035,992 7.9% 1,276,361 7.8%

20 - 24 years 121,482 9.1% 128,151 9.5% 75,170 6.8% 62,723 7.1% 1,027,658 7.9% 1,293,702 7.9%

25 - 34 years 221,725 16.7% 228,549 17.0% 150,816 13.6% 117,396 13.3% 1,959,745 15.0% 2,456,506 15.0%

35 - 44 years 188,491 14.2% 183,202 13.6% 155,080 14.0% 118,415 13.4% 1,780,354 13.6% 2,237,051 13.6%

45 - 54 years 180,414 13.6% 176,023 13.1% 167,326 15.1% 128,581 14.6% 1,718,135 13.2% 2,190,065 13.4%

55 - 64 years 129,343 9.7% 129,302 9.6% 123,035 11.1% 92,809 10.5% 1,236,568 9.5% 1,581,714 9.6%

65 - 74 years 70,524 5.3% 73,063 5.4% 64,201 5.8% 52,012 5.9% 679,537 5.2% 868,813 5.3%

75 - 84 years 47,922 3.6% 51,941 3.9% 39,741 3.6% 36,045 4.1% 418,671 3.2% 546,398 3.3%

Over 85 years 22,719 1.7% 25,658 1.9% 18,638 1.7% 15,921 1.8% 189,473 1.5% 249,690 1.5%

May 3, 2011

Market Analysis


Qualcomm Stadium


• Household Income

– United States median household income is approximately $54,333

– The 0 – 15 minute market area has the lowest median household income of the four market areas ($52,966), while the 15 – 30 minute market area has the highest ($70,955)

– The highest proportion of households (21% - 23%) earn between $50,000 to $75,000

Drive-Time Rings

San Diego 0 - 15 mins 15 - 30 mins 30 - 60 mins 60 - 120 mins

% % % % %

Median HH Income (2010) $58,858 $52,966 $70,955 $66,060 $57,068

Avg HH Income (2010) $76,797 $66,310 $93,699 $83,131 $74,527

Households by Income (2010)

Less than $15,000 48,015 9.9% 55,477 11.1% 21,739 6.0% 18,185 6.2% 440,853 11.0%

$15,000 - $24,999 41,521 8.6% 48,315 9.6% 22,849 6.3% 19,561 6.6% 363,489 9.1%

$25,000 - $34,999 40,576 8.4% 48,090 9.6% 24,638 6.8% 21,717 7.4% 382,955 9.6%

$35,000 - $49,999 70,556 14.6% 81,632 16.3% 46,412 12.8% 40,989 13.9% 546,968 13.7%

$50,000 - $74,999 102,453 21.2% 111,440 22.2% 76,161 21.0% 67,433 22.9% 822,653 20.5%

$75,000 - $99,999 70,773 14.6% 70,944 14.2% 58,624 16.1% 48,788 16.6% 589,010 14.7%

$100,000 - $149,999 66,200 13.7% 56,830 11.3% 63,274 17.4% 48,855 16.6% 512,251 12.8%

$150,000 - $199,999 22,112 4.6% 15,747 3.1% 24,042 6.6% 15,278 5.2% 179,931 4.5%

Over $200,000 21,314 4.4% 12,806 2.6% 25,779 7.1% 13,601 4.6% 165,645 4.1%

May 3, 2011

Market Analysis


• Mexico Market

– Mexico is a major contributor to visitation to San Diego and events at Qualcomm Stadium

– The largest Mexican neighboring city is Tijuana (approximately 20 miles south of the city of San Diego), which is located in the state of Baja California

– In 2009, the Tijuana metropolitan area was the 5th largest in Mexico with approximately 1.8 million residents

– Approximately 31 million people crossed the San Ysidro border in 2009, making it the world’s busiest land border crossing

• Bus Passengers: 453,000

• Personal Vehicle Passengers: 24 million

• Pedestrians: 6.2 million

Qualcomm Stadium

Source: National Population Council; Research and Innovative Technology Administration; Bureau of Transportation Statistics

May 3, 2011

Market Analysis


• Visitor Market

– San Diego had an estimated 29.6 million visitors in 2009

– Overnight commercial travelers (business or convention/meetings) recorded nearly three times higher spending per person than leisure travelers ($909 v. $328)

– Leisure travelers represented 81% of overnight visitors and 63% of spending

– Average length of stay for leisure visitors is 3.8 nights and for business travelers is approximately 2.9

– Average daily spending (including hotel) per leisure visitor is approximately $86 and $313 for business visitors

• Data provided by the San Diego Convention and Visitors Bureau


Market Analysis

Qualcomm Stadium

• AECOM reviewed the historic and current profiles of Qualcomm Stadium’s anchor tenants (San Diego Chargers and San Diego State University Aztecs) and other events in order to understand the market, event and revenue potential at Qualcomm Stadium

Overview

– Opened in 1967, the stadium footprint occupies 15 acres of the 166 acre Qualcomm Stadium site

– Owned and operated by the City of San Diego

– Current seating capacity of approximately 70,500 (increased from the original 52,000 over the course of three renovations in 1980, 1983 and 1997)

$86 million renovation in 1997 funded through a bond issuance and the sale of naming rights

– 18,500 on-site parking spaces


Market Analysis

Qualcomm Stadium

Overview

– Anchor tenants are the San Diego Chargers NFL Franchise and the SDSU Aztecs

Chargers are in Western Division of AFC, have a 10-game annual home schedule (2 preseason and 8 regular season) not including playoffs, and average 95%+ capacity

Aztecs are in the Mountain West Conference of the NCAA, have a 6-game annual home schedule and average approximately 12,000-15,000 attendees per game

– Annual recurring events include the Holiday Bowl, Poinsettia Bowl and High School Football games

– Other events include concerts, dirt shows, and international soccer games, among others

– Parking lot events include San Diego Auto Connection events, RV shows, and RaceLegal events, among others


Market Analysis

San Diego Sports & Entertainment Market

• AECOM reviewed the spectrum of sports and entertainment venues in the San Diego region in order to assess the broader competitive market of discretionary spending on sports and entertainment events

• The San Diego regional market possesses a strong sports and entertainment base:

- Home of the Chargers (NFL); Padres (MLB); SDSU Aztecs (NCAA Football and Basketball)

- Several amusement parks and attractions, including SeaWorld, San Diego Zoo, LEGOLAND, San Diego Zoo’s Wild Animal Park, and numerous museums and cultural attractions

- Major event venues competing for entertainment dollars include:

Major Stadiums / Large Scale Venues

Qualcomm Stadium

PETCO Park

Del Mar Racetrack

- Strong transportation network including a light rail system to Qualcomm Stadium and the San Diego International Airport

Qualcomm Stadium

Other Regional Event Venues include:

Torero Stadium

Valley View Casino Center

Viejas Arena

Cricket Wireless Amphitheatre

Tony Gwynn Stadium

Jenny Craig Pavilion

RIMAC Arena

Peterson Gym

Starlight Bowl

May 3, 2011

Market Analysis


Qualcomm Stadium


May 3, 2011

Market Analysis


• The following slides provide an overview of the metrics analyzed for the facilities competing for sports and entertainment spending in the San Diego market. Factors include:

– General

Year Opened

Owner

Stadium Operator/Manager

Estimated Construction Cost/Renovation

Seating Capacity

– In-Stadium Events

Main Tenants

Annual Re-Occurring

Other

– Parking Lot Facilities

Event Types

Dedicated On-Site Parking Spaces

Lease Rate Ranges

Per Car Parking Rates

Annual Parking Lot Event Days


Market Analysis


Selected Venues

Qualcomm Stadium

Source: Individual Stadiums; Revenues From Sports Venues, 2011 College Edition & 2010 Pro Edition; AECOM

Note: All data based on available information from individual venues and interviews with the operators.

Name Year Opened Owner Main Tenants Capacity

Dedicated On-Site

Parking

Qualcomm Stadium 1967 City of San DiegoSan Diego Chargers, San Diego State Aztecs,

Holiday Bowl, Poinsettia Bowl70,561 18,500

Stadiums

PETCO Park 2004City of San Diego (70%);

San Diego Padres (30%)San Diego Padres 42,500 1,903

Torero Stadium 1961 University of San Diego University of San Diego Football and Soccer 6,000 1,022

Arenas

Valley View Casino Center (formerly

San Diego Sports Arena)1966 Arena Group 2000 N/A 16,100 3,800

Viejas Arena 1997 San Diego State UniversitySan Diego State University Men's and Women's

Basketball12,414 2 structures, 1 lot

Ampitheaters

Cricket Wireless Amphitheatre 1998 Live Nation Concerts 19,492 N/A

Other

Del Mar Racetrack 1937 Del Mar Thouroughbred Club American Thoroughbred horse racing 14,304 13,000

May 3, 2011

Market Analysis


Selected Venues

Qualcomm Stadium


Note: Construction costs/renovations are relative to year of construction/renovation. N/A indicates data was not available or not

released from the venue operator. All data based on available information from individual venues and interviews with the operators.

Name Year Opened Owner Stadium Operator/Manager

Estimated Construction

Costs/Renovations

Qualcomm Stadium 1967 City of San Diego City of San Diego

$27 million in initial construction

costs/$86 million renovation in 1997/$5

million renovation in 2002

Stadiums

PETCO Park 2004City of San Diego (70%);

San Diego Padres (30%)San Diego Padres $450 million

Torero Stadium 1961 University of San Diego University of San Diego $3.5 million renovation

Arenas


San Diego Sports Arena)1966 Arena Group 2000 AEG $6.5 million

Viejas Arena 1997 San Diego State University San Diego State University $29 million

Ampitheaters

Cricket Wireless Amphitheatre 1998 Live Nation Live Nation N/A

Other

Del Mar Racetrack 1937 Del Mar Thouroughbred Club Del Mar Thouroughbred Club $9 million recent renovation

May 3, 2011

Market Analysis


Selected Venues

Qualcomm Stadium


Note: N/A indicates data was not available or not released from the venue operator. All data based on available information from

individual venues and interviews with the operators. Parking lot rate cards for available venues attached in Appendix.

Name Main Tenants Annual Re-Occurring Events Other Events Parking Lot Events

Range of Parking

Lot Lease Rates

Dedicated On-Site

Parking

Parking Rates Per

Car

Annual Parking Lot

Event Days

Qualcomm Stadium

San Diego Chargers, San Diego

State Aztecs, Holiday Bowl,

Poinsettia Bowl

CIF high school football, dirt

shows

International soccer, concerts,

religious conventions

Car sales, RV shows, RaceLegal,

antique and collector car parts

exchange

$1,000 - $5,000 18,500 $15 - $46 200+

Stadiums

PETCO Park San Diego Padres Baseball

Concerts, convention center

overflow, networking receptions,

social events

Concerts, street fairs, convention

center overflow, closing ceremonies

for organizations

$3,750 - $7,500 1,903 $3 - $20 7

Torero StadiumUniversity of San Diego Football

and Soccer Football, soccer Lacrosse None N/A 1,022 $5.50 N/A

Arenas


San Diego Sports Arena)N/A Arena football

Ice hockey, basketball, concerts,

family shows, mixed martial

arts/wrestling

Flea market N/A 3,800 $15 - $20 N/A

Viejas ArenaSan Diego State University Men's

and Women's BasketballBasketball

Concerts, cheer competitions,

ceremoniesNone N/A 2 structures, 1 lot $10 N/A

Ampitheaters

Cricket Wireless Amphitheatre N/A Concerts ConcertsConcerts, car shows, RV and car

sales, ride and drive, marathons$9,000 - $10,000 N/A $6 - $25 3

Other

Del Mar Racetrack N/AHorse racing, dog racing,

concertsConcerts

Car shows, rv shows, family shows,

crafts, festivals$2,000 - $3,400 13,000 $8 - $20 N/A

May 3, 2011

Market Analysis

Benchmark Stadiums

• AECOM identified national benchmarks (with input from the Qualcomm Stadium staff and the City of San Diego) in order to analyze event and revenue potential at Qualcomm Stadium

• Benchmarks were selected based on their configuration and anchor events (major football stadiums), seasonality (outdoor, warm weather facilities), and associated parking facilities

Qualcomm Stadium

- Benchmark Football Stadiums

Alamodome (San Antonio, TX)

Candlestick Park (San Francisco, CA)

EverBank Field (Jacksonville, FL)

Los Angeles Memorial Coliseum (Los Angeles, CA)

LP Field (Nashville, TN)

Raymond James Stadium (Tampa, FL)

Rose Bowl (Pasadena, CA)

- Benchmark Baseball Stadiums

Angel Stadium of Anaheim (Anaheim, CA)

Dodger Stadium (Los Angeles, CA)

- Benchmark Baseball/Football Stadiums

Oakland-Alameda County Coliseum (Oakland, CA)

Sun Life Stadium (Miami, FL)

May 3, 2011

Market Analysis

Benchmark Stadiums

• The following slides provide an overview of the metrics analyzed for the benchmark stadiums. Factors include:

– General

Year Opened

Owner

Seating Capacity

Market Demographics including Population, Age and Household Income

– In-Stadium Events

Main Tenants

Annual Re-Occurring

Other

– Parking Lot Facilities

Event Types

Dedicated On-Site Parking Spaces

Lease Rate Ranges

Per Car Parking Rates

Annual Parking Lot Event Days


Market Analysis

Benchmark Stadiums

General Overview

Qualcomm Stadium

Source: Individual Stadiums; Revenues From Sports Venues, 2010 Pro Edition & 2011 College Edition; AudArena 2011; AECOM

Note: N/A indicates data was not available or not released from the venue operator. All data based on available information from individual

venues and interviews with the operators.

Name Year Opened Owner Main Tenants Capacity

Dedicated On-site

Parking

Qualcomm Stadium 1967 City of San DiegoSan Diego Chargers, San Diego State Aztecs,

Holiday Bowl, Poinsettia Bowl70,561 18,500

Benchmark Football Stadiums

Alamodome 1993 City of San Antonio Valero Alamo Bowl 65,000 3,000

Candlestick Park 1958 City of San Francisco San Francisco 49ers 63,000 7,000

EverBank Field 1955 City of Jacksonville Jacksonville Jaguars 82,000 6,500

Los Angeles Memorial Coliseum 1923State of California, City and

County of Los AngelesUniversity of Southern California Football 93,607 5,500

LP Field 1999 City of NashvilleTennessee Titans, Tennessee State Tigers, Franklin

American Mortgage Music City Bowl67,000 7,500

Raymond James Stadium 1998 Tampa Sports AuthorityTampa Bay Buccaneers, University of South Florida

Bulls and the Outback Bowl65,000 10,581

Rose Bowl 1922 City of PasadenaUniversity of California Los Angeles Football and

Rose Bowl92,542 8,900

Benchmark Baseball Stadiums

Angel Stadium of Anaheim 1966 City of Anaheim Los Angeles Angels of Anaheim 45,050 14,000

Dodger Stadium 1962 Frank McCourt Los Angeles Dodgers 56,000 16,000

Benchmark Baseball/Football Stadiums

Oakland-Alameda County Coliseum 1968City of Oakland and Alameda

CountyOakland Raiders and Oakland Athletics 62,500 10,000

Sun Life Stadium 1987 Stephen M. Ross Miami Dolphins and Florida Marlins 75,540 24,000

May 3, 2011

Market Analysis

Benchmark Stadiums

Event Mix

Qualcomm Stadium

Source: Individual Stadiums; Revenues From Sports Venues, 2010 Pro Edition & 2011 College Edition; AudArena 2011; AECOM

Note: LA Memorial Coliseum and Rose Bowl do not lease lot on an event basis rather only charge on a per car basis during events. N/A indicates data was not available or not

released from the venue operator. All data based on available information from individual venues and interviews with the operators. Parking lot rate cards for available venues

attached in Appendix.

Name Main Tenants Annual Re-Occurring Events Other Events Parking Lot Events

Range of Parking

Lot Lease Rates

Dedicated On-Site

Parking

Parking Rates Per

Car

Annual Parking Lot

Event Days

Qualcomm Stadium

San Diego Chargers, San Diego

State Aztecs, Holiday Bowl,

Poinsettia Bowl

CIF high school football, dirt

showsInternational soccer, concerts, religious conventions

Car sales, RV shows, RaceLegal, antique and

collector car parts exchange$1,000 - $5,000 18,500 $15 - $46 200+


Alamodome Valero Alamo Bowl

Football, high school football,

Valero Alamo Bowl, U.S. Army

All-American Bowl

Music Festivals, concerts, family shows, Monster

Jam, NCAA Men's Division I Basketball Tournament,

marching band contests, trade shows

Test drives, marathons, carnivals, convention center

overflow$3,000 - $6,000 3,000 $10 - $25 110

Candlestick Park San Francisco 49ers Football

Soccer, concerts, off-road races, commercial shoots,

filming, social events, religious rallies, 49ers school

events

Ride and drive events, antiques show, car shows,

fireworks show$1,156 - $5,780 7,000 $25 - $40 25 to 30

EverBank Field Jacksonville Jaguars Football Concerts, monster truck events, religious ralliesBus rodeo, CSX - driver competition, JTA, ride and

drive, marketing events, charity walks and runs$1,750 - $3,500 6,500 $5 - $80 10

Los Angeles Memorial ColiseumUniversity of Southern California

FootballFootball Soccer, concerts, X Games, filming, social events Marathons, festivals, filming $10 - $25 per car 5,500 $3 - $10 25 to 30

LP Field

Tennessee Titans, Tennessee

State Tigers, Franklin American

Mortgage Music City Bowl

Football Concerts, festivals, meetings, social eventsCar shows, bicycle races, ride and drive, concerts,

charity walks$2,000 7,500 $5 - $52 50

Raymond James Stadium

Tampa Bay Buccaneers,

University of South Florida Bulls

and the Outback Bowl

Football, Outback Bowl, ACC

Football Championship

Soccer, concerts, monster jam, equestrian

showjumping

Christmas tree sales, fireworks show, auto shows,

concerts, circus$2,000 10,581 $25 - $75 90

Rose BowlUniversity of California Los

Angeles Football and Rose BowlFootball, Rose Bowl

Soccer, concerts, fireworks shows, commencement

ceremonies

Ride & drive events, film crew parking, festivals,

filming, RV & car sale events, flea market, staging

areas for marathons

$10 - $20 per car;

$350 for catering

services

8,900 $15 - $40 60


Angel Stadium of Anaheim Los Angeles Angels of Anaheim Baseball Concerts, monster truck events, supercross, religious

rallies, filming

Car shows, ride and drive events, car drifting events,

charity walks, concerts, Angel fan fests

$20 per car; $5,000 -

$10,00014,000 $8 - $16 15

Dodger Stadium Los Angeles Dodgers BaseballConcerts, monster truck events, supercross, religious

rallies, marathons, filming, social events, conventionsRV shows, flea market, concerts, marathons, filming $1,500 - $25,000 16,000 $15 - $35 10 to 15


Oakland-Alameda County ColiseumOakland Raiders and Oakland

AthleticsFootball, baseball Concerts, soccer, conventions Car club, vehicular testing, basketball tournaments $3,500 - $5,000 10,000 $17 - $85 7

Sun Life StadiumMiami Dolphins and Florida

MarlinsFootball, baseball, Orange Bowl

Basketball, soccer, Australian football, WWE

WrestleMania, concerts, monster truck events, circus,

trade shows, filming

RV & boat shows N/A 24,000 $10 - $80 15 to 20

May 3, 2011

Market Analysis

Benchmark Stadiums

75-mile Market

• In addition to the 2-hour drive-time market, AECOM also analyzed the 75-mile market, as gauged by a distance ring drawn around Qualcomm Stadium, in order to compare Qualcomm Stadium against other NFL benchmarks (as will be shown in the Benchmark Stadium section of the study)

• The NFL assigns each team in the league a primary market and secondary market, which is typically defined by an area where any part of the market falls within 75 miles of the stadium

Qualcomm Stadium


May 3, 2011

Market Analysis

Benchmark Stadiums

75-mile Market Demographics

Qualcomm Stadium


Name Location Population Median Age Average HH Income Median HH Income

Qualcomm Stadium San Diego, CA 4,727,290 35.6 $86,305 $65,004


Alamodome San Antonio, TX 2,990,636 33.9 $65,807 $51,110

Candlestick Park San Francisco, CA 8,859,374 36.7 $104,917 $76,679

EverBank Field Jacksonville, FL 2,135,815 37.2 $63,119 $50,218

Los Angeles Memorial Coliseum Los Angeles, CA 17,499,357 33.0 $79,506 $60,000

LP Field Nashville, TN 2,623,575 36.5 $65,411 $51,923

Raymond James Stadium Tampa, FL 5,356,894 43.6 $61,910 $48,392

Rose Bowl Pasadena, CA 17,675,374 33.1 $79,157 $59,711


Angel Stadium of Anaheim Anaheim, CA 18,486,848 33.3 $80,082 $60,366

Dodger Stadium Los Angeles, CA 17,551,521 33.0 $79,399 $59,930


Oakland-Alameda County Coliseum Oakland, CA 9,792,845 36.4 $100,844 $73,382

Sun Life Stadium Miami, FL 5,556,849 39.8 $69,584 $51,837

May 3, 2011

Market Analysis

Benchmark Stadiums

TV Households

• In addition to the 75-mile market, AECOM also analyzed the comparative TV markets of the benchmarks in order to assess San Diego’s relative strength for TV-driven sports and entertainment events

• As stated previously, the NFL assigns each team in the league a primary market and secondary market, which is typically defined by an area where any part of the market falls within 75 miles of the stadium.

• It should be noted that not all of the benchmarks are NFL stadiums

Qualcomm Stadium

Source: Nielsen Media Research; AECOM

Name Location DMA Name 2010 TV Homes

Qualcomm Stadium San Diego, CA San Diego 1,073,390


Alamodome San Antonio, TX San Antonio 830,000

Candlestick Park San Francisco San Francisco-Oak-San Jose 2,503,400

EverBank Field Jacksonville, FL Jacksonville 679,120

Los Angeles Memorial Coliseum Los Angeles, CA Los Angeles 5,659,170

LP Field Nashville, TN Nashville 1,019,010

Raymond James Stadium Tampa, FL Tampa-St. Pete (Sarasota) 1,805,810

Rose Bowl Pasadena, CA Los Angeles 5,659,170


Angel Stadium of Anaheim Anaheim, CA Los Angeles 5,659,170

Dodger Stadium Los Angeles, CA Los Angeles 5,659,170


Oakland-Alameda County Coliseum Oakland, CA San Francisco-Oak-San Jose 2,503,400

Sun Life Stadium Miami, FL Miami-Ft. Lauderdale 1,538,090

May 3, 2011

Market Analysis

Conclusions

• The following slides provide an overview of the comparative market demographics and operational industry trends among the identified benchmarks facilities. The conclusions are broken into two sections

– Demographic Trends

Population

Age

Average Household Income

TV Market Size

– Industry Trends

Stadium Capacity

Other In-Stadium Non-Anchor Events

Dedicated, On-Site Parking Lot Capacity

Average Annual Parking Lot Events

Average Parking Lot Lease Rates per Event


Market Analysis

Conclusions (Demographic Trends)

Population

– Qualcomm Stadium has a 75-mile market population of approximately 4.7 million

– The average market population of the benchmark stadium is approximately 6.3 million. However, the average market population excluding the LA and SF-Oakland markets is 3.9 million

– Qualcomm’s 75-mile population is below the average population per benchmark venue but above the average population per benchmark if the LA and SF-Oakland markets are removed. Based on population size, the San Diego market is large enough to compete at the level of the comparable venues

• The population data above does not include Mexico, which is accessible for the San Diego market and a significant source of attendees for events at Qualcomm Stadium. Tijuana has 1.8 million residents and 31 million people crossed the San Ysidro border in 2009.

Qualcomm Stadium

Note: LA Market considers the average of the LA Coliseum, Rose Bowl, Angel Stadium, and Dodger Stadium and the SF-Oakland market considers

the average of Candlestick Park and the Oakland-Alameda Coliseum

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

20,000,000

Qualcomm Stadium

Los Angeles Market

SF-Oakland Market

EverBank Field Raymond James Stadium

LP Field Alamodome Sun Life Stadium

Average

Population

May 3, 2011

Market Analysis


Age

– Qualcomm Stadium’s 75-mile market population has a median age of 35.6

– The average age of the benchmark stadiums is slightly higher than Qualcomm’s at 37

– Qualcomm’s median age of the 75-mile market is younger than the majority of the benchmark stadiums giving Qualcomm an opportunity to capture the higher spending 20-40 year old market segment

Qualcomm Stadium



0

5

10

15

20

25

30

35

40

45

50

Qualcomm Stadium

Los Angeles Market

SF-Oakland Market



Average

Median Age

May 3, 2011

Market Analysis


Average Household Income

– Qualcomm Stadium’s market has an average household income of approximately $86,000

– The average household income across the selected benchmark stadiums is approximately $74,000

– The average household income in the Qualcomm market is higher than all of the benchmarks other than the Oakland-San Francisco market, suggesting the potential for discretionary spending on sports and entertainment is higher in the San Diego market than the benchmarks

Qualcomm Stadium



$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

Qualcomm Stadium

Los Angeles Market

SF-Oakland Market

EverBank FieldRaymond James

Stadium


Average

Average HH Income

May 3, 2011

Market Analysis


TV Market Households

– Qualcomm Stadium’s television market is approximately 1.1 million

– The average number of households in television market among the selected benchmark stadiums is approximately 1.9 million. However, the average number of households excluding the LA and SF-Oakland markets is 1.2 million

– Qualcomm’s TV household market is below the average benchmark market, suggesting that the overall drawing power from the television market is weaker in terms of their TV market to household ratio as compared to the benchmarks

– The TV household data does not include population in Mexico, which is accessible and a significant source of attendees for events at Qualcomm Stadium

Qualcomm Stadium



0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

Qualcomm Stadium

Los Angeles Market

SF-Oakland Market

EverBank Field

Raymond James

Stadium


Average

TV Market Households

May 3, 2011

Market Analysis

Conclusions (Industry Trends)

Stadium Capacity

– Qualcomm Stadium has a seating capacity of approximately 70,600

– The average capacity of the selected benchmark stadiums is approximately 70,000

– Qualcomm Stadium is comparable to the selected benchmark stadiums in terms of seating capacity

Qualcomm Stadium



0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

Qualcomm Stadium

Los Angeles Market

SF-Oakland Market



Average

Capacity

May 3, 2011

Market Analysis


Other In-Stadium Non-Anchor Events

– Qualcomm Stadium hosts approximately 8 in-stadium non-anchor tenant events annually

– The average in-stadium non-anchor tenant events hosted per benchmark market is between 5 and 6 events

– Qualcomm Stadium is performing above the market average other than the Alamodome, which is removed from this section because it operates more like an arena than a stadium, suggesting there may be limited opportunity to drive additional large scale non-anchor events to Qualcomm Stadium

Qualcomm Stadium


the average of Candlestick Park and the Oakland-Alameda Coliseum. Alamodome removed from Other In-Stadium Non-Anchor Events, because it

operates more like an arena than a stadium in this respect.

0

1

2

3

4

5

6

7

8

9

Qualcomm Stadium

LA Market SF-Oakland Market

EverBank FieldRaymond James Stadium

LP Field Sun Life Stadium Average

Average Annual Non-Anchor In-Stadium Events

May 3, 2011

Market Analysis


Dedicated, On-Site Parking Lot Capacity

– The average dedicated on-site parking lot spaces is slightly over 10,000 while Qualcomm Stadium has 18,500 spaces

– Qualcomm Stadium has the second most on-site, dedicated parking spaces behind Sun Life Stadium suggesting significant capacity to host on-site parking lot events on non-stadium event days

Qualcomm Stadium

Note: LA Market considers the average of the LA Coliseum, Rose Bowl, Angel Stadium, and Dodger Stadium and the SF-

Oakland market considers the average of Candlestick Park and the Oakland-Alameda Coliseum

0

5,000

10,000

15,000

20,000

25,000

30,000

Qualcomm Stadium



LP Field AlamodomeSun Life Stadium Average

Dedicated, On-Site Parking Lot Spaces

May 3, 2011

Market Analysis


Annual Parking Lot Events

– The benchmark stadiums host an average of 47 parking lot events annually

– Qualcomm Stadium , with an average of over 200 parking lot events annually, significantly outperforms the benchmarks in terms of generating on-site events in its parking on non-stadium event days

Qualcomm Stadium


the average of Candlestick Park and the Oakland-Alameda Coliseum. Sun Life Stadium removed from analysis as venue operator would not release

data specific to parking lot operations.

0

50

100

150

200

250

300

Qualcomm Stadium



LP Field Alamodome Sun Life Stadium Average

Average Annual Parking Lot Events

May 3, 2011

Market Analysis


Average Parking Lot Lease Rate per Event

– The benchmark stadiums charge an average of $2,500-$3,000 per event to lease the stadium parking lot

• Qualcomm Stadium, the Alamodome, Candlestick Park and Raymond James Stadium have official rate cards, the rest charge based on market demand (see Appendix for rate cards)

– Qualcomm Stadium has a tighter range ($1,000-$5,000) and more specific pricing by event type in its parking lot than other benchmarks

– Based on the population per available venue, supporting household income and on-site dedicated parking lot capacity, Qualcomm Stadium has the opportunity to drive more revenue from its parking lots on a per event basis

Qualcomm Stadium

Note: LA Market considers the average of the LA Coliseum, Rose Bowl, Angel Stadium, and Dodger Stadium and the SF-Oakland market considers the

average of Candlestick Park and the Oakland-Alameda Coliseum. LA market removed from analysis because only Dodger Stadium leases the lot for the full

day and its pricing range is not comparable, the rest of the LA market lots charge on a per car basis. Sun Life Stadium removed from analysis as venue

operator would not release data specific to parking lot operations.

$0

$1,000

$2,000

$3,000

$4,000

$5,000

Qualcomm Stadium SF-Oakland MarketEverBank FieldRaymond James Stadium

LP Field Alamodome Average

Average Parking Lot Lease Rate per Lot per Event Day

May 3, 2011

Market Analysis

Conclusions (Summary)

Demographics

– The market demographics of the population serving Qualcomm Stadium are strong and compare favorably with the selected national benchmark venues

– Based on the strong market base, Qualcomm Stadium should be able to drive events and attendance at the venue on a level equal to the national industry trends

Operational Industry Trends

– Qualcomm Stadium is performing above the market average for In-Stadium Non-Anchor Events based on an analysis of the national benchmarks

– Qualcomm is performing significantly above the industry average for Parking Lot Events, but on average leases the lot at a lower level than other facilities, suggesting there may be room to broaden the range of event pricing and price more on market demand as opposed to a predetermined rate


Market Analysis

Conclusions (Summary)Parking Lot Events

– AECOM surveyed industry leading car dealerships and promoters of ride and drive events in the Southern California region regarding parking lot events at Qualcomm Stadium

– Many of those surveyed have utilized Qualcomm Stadium’s parking lot for events or have attended a parking lot event at the stadium

Summary of Interview Findings

– Qualcomm Stadium’s parking lot is an asset (best parking lot site on the West Coast)

– Qualcomm Stadium has a reputation of setting up “exclusives” with certain vendors

– Need to market to major users (Ride and Drive, Vehicular Sales, Fairs / Festivals, etc.)

– Users need to be able to have access to utilities, catering, security

– Parking lot needs some repair to make it first class

– Large ride and drive events could generate approximately $10,000 per day

– Vehicular sales events have potential to generate a minimum of $6,500 per day depending on market conditions


Market Analysis


Recommendations

– AECOM recommends that Qualcomm Stadium replaces the current parking lot rate card, which sets specific lease rates for events and binds the City to those rates, with one that only sets minimums and allows for more pricing flexibility

– A rate card that only sets minimums will allow for clarity and efficiency, but also enable Qualcomm to increase the price of events where the market allows it

– Such a system will allow for market based pricing on an event by event basis to achieve higher rates where possible. The majority of comparable venues do not have rate cards (only 3 of the 10 national benchmarks have rate cards). Discussions with the benchmarks suggest that the primary reason is a rate card prohibited them from achieving the full value of the events when priced on an event by event basis

– However, it is important to note that Qualcomm’s rate card allows for operational efficiency (staff do not have to price every event) and clarity to event promoters


Market Analysis


Recommendations

– Below are the recommended minimum rates per event type for Parking Lot events at Qualcomm Stadium

– Based on pricing and event mix at the benchmarks and discussions with promoters of major parking lot events in Southern California, the minimum price per event for Qualcomm parking lot events could be set at approximately 20% to 40% higher per event than the current rate card

– This will allow Qualcomm to drive more revenue per event but remain competitively priced within the market and not sacrifice its existing competitive pricing advantage

Qualcomm Stadium

Parking Lot Event Current Rates Recommended Minimums

Non-Profit Weekday $1,000 $1,200

Non-Profit Weekend $2,000 $2,400

For Profit Weekday $2,000 $2,750

For Profit Weekend $4,000 $5,500

Commercial Events $5,000 $7,000

Event Parking (per car) $15 $20

Event Parking (per RV) $46 $60

May 3, 2011

Financial Analysis


Financial Analysis

Introduction• AECOM analyzed the historic and current operations of Qualcomm Stadium based on

data received from the City of San Diego, discussions with Stadium management, interviews with San Diego venues and national benchmark stadiums, and the firm’s extensive experience in the sports and entertainment industry

Three Scenarios

• AECOM analyzed Qualcomm Stadium’s operating profile from three separate scenarios over a 10-year period:

Scenario 1: Chargers stay at Qualcomm Stadium

– Assumed that the Chargers, SDSU, Poinsettia Bowl and Holiday Bowl remain at stadium for the 10 year period

Scenario 2: Chargers leave Qualcomm Stadium after 5 years but stay in San Diego market

– Assumed that the Chargers build a new stadium locally, but remain in Qualcomm Stadium for the next five years until the Stadium is completed. During the initial five years, SDSU, Poinsettia Bowl and Holiday Bowl also remain at Qualcomm Stadium. Upon opening of the new Stadium, the Chargers, SDSU, Poinsettia Bowl and Holiday Bowl all move to the new San Diego venue

Scenario 3: Chargers leave Qualcomm Stadium and San Diego market immediately

– Assumed that the Chargers build a new stadium outside of the SD market and immediately vacate Qualcomm Stadium to play their games at a stadium in their new market. All other tenants remain at Qualcomm.


Financial Analysis

Introduction• In each of the three scenarios, it is assumed that all of the current lease arrangements for the Chargers,

SDSU and other events remain constant (and that current NFL schedule (number of home games) remains the same)

• Based on the current lease agreement between the Chargers and the City of San Diego, the Chargers have had the right to terminate the Agreement any time after 2008 season

• The lease termination payment the Chargers would have to make to the City of San Diego is as follows (but is not included in the projected operating estimates made on the following slides)

• If the Chargers exercise the early termination right, the City will receive the appropriate termination fee and the City will retain the debt service reserve account for the Stadium bonds ($5.8 million)

• The City’s bond debt for Qualcomm Stadium matures in 2027

Qualcomm Stadium

Early Termination Notice

Delivered On or Between Termination Fee

2/1/11 and 5/1/11 $25,820,000

2/1/12 and 5/1/12 23,980,000

2/1/13 and 5/1/13 22,015,000

2/1/14 and 5/1/14 19,900,000

2/1/15 and 5/1/15 17,630,000

2/1/16 and 5/1/16 15,195,000

2/1/17 and 5/1/17 12,575,000

2/1/18 and 5/1/18 9,760,000

2/1/19 and 5/1/19 6,740,000

2/1/20 and 5/1/20 3,490,000

May 3, 2011

• The illustrative lease agreement above, which was discussed and reviewed with the City of San Diego and Qualcomm Stadium staff, provides a snapshot of the assumed rents and percentages of revenue retained by the City of San Diego / Qualcomm Stadium for each event type

• Assumed the same lease terms (where applicable given the respective tenant situation) in all 3 scenarios

Financial Analysis

Assumed Lease Terms

Qualcomm Stadium

Rental Rates (Stadium/City receives)

Base Net General Ticketmaster Net Net Net

Revenue/Event Rent Tickets Royalties Concessions Novelties Parking

Anchor Tenants

San Diego Chargers (Regular

Season)1 $2,500,000 0.0% $0.25/ticket 0.0% 0.0% 0.0%

San Diego Chargers (Preseason)1

San Diego State Aztecs2 $1.00/ticket 0.0% $0.00 0.0% 0.0% 0.0%

Other Stadium Events

Poinsettia Bowl $10,000 0% $0.00 100% 100% 100%

Holiday Bowl $10,000 0% $0.25/ticket 100% 100% 100%

Major Concerts N/A 10% $0.00 100% 100% 100%

Minor Concerts N/A 10% $0.00 100% 100% 100%

International Soccer N/A 10% $0.25/ticket 100% 100% 100%

Dirt Events N/A 10% $0.25/ticket 100% 100% 100%

Miscellaneous (Stadium) N/A 10% $0.00 100% 100% 100%

High School Sports N/A 10% $0.00 100% 100% 100%

Other Sports

Auto Events3 $211,000 0% $0.00 100% 100% 100%

Parking Lot Concerts N/A 10% $0.00 100% 100% 100%

Misc/Comm Film (Parking Lot)3 $5,500 0% $0.00 100% 100% 100%1Chargers Rent (for 10 games including Preseason and Regular Season, but no Playoffs) assumed at $2.5 million annually (2004-2012); $3.0 million annually

(2013-2016); $4.0 million annually (2017-2020).

2SDSU Rent also includes repayment by SDSU to City of San Diego of all operational expenses for gameday operations.3SDAC pays an annual rent of $211,000 for use of the parking lot. In addition, based on average rents received for analyzed historical Qualcomm Stadium parking

lot events, an average per event rent $3,500, for non-SDAC events was assumed.

Note: Percentages shown in table are those retained by Qualcomm Stadium. Assumed that the remainder goes to act/promoter

May 3, 2011

• AECOM estimated the annual in-stadium events at Qualcomm Stadium for each of the three scenarios

• Scenario 1 (Chargers stay at Qualcomm Stadium): Qualcomm Stadium operates at its current level hosting approximately 24 events annually over the next 10 years (2011-2020)

• Scenario 2 (Chargers leave Qualcomm Stadium after 5 years but stay in San Diego market): Between 2011-2015, Qualcomm Stadium hosts the same number of events. However, between 2016-2020, with the assumed departure of the Chargers, SDSU, Poinsettia Bowl and Holiday Bowl, it is assumed that on-site events will drop to 4

• Scenario 3 (Charger leave Qualcomm Stadium and San Diego market immediately): With the immediate departure of the Chargers, Qualcomm Stadium will lose 10 guaranteed events annually, however, it is estimated that it will still host a total of 14 with the retention of SDSU and the Poinsettia and Holiday Bowls

Financial Analysis

Event Estimate

Qualcomm Stadium

0

10

20

30

2011-2020 2011-2015 2016-2020 2011-2020

Scenario 1 Scenario 2 Scenario 3

24 24

4

14

In-Stadium Events

May 3, 2011

• AECOM estimated the annual parking lot events at Qualcomm Stadium for each of the three scenarios

• It is assumed that there may be multiple parking lot events in a single day. Therefore, 242 parking lot events does not equate to 242 individual days of parking lot events, but more likely 200 or less.

• Scenario 1 (Chargers stay at Qualcomm Stadium): Qualcomm Stadium operates at its current level hosting approximately 242 parking lot events annually over the next 10 years (2011-2020)

• Scenario 2 (Chargers leave Qualcomm Stadium after 5 years but stay in San Diego market): Between 2011-2015, Qualcomm Stadium hosts the same number of events. However, between 2016-2020, with the assumed departure of the Chargers, SDSU, Poinsettia Bowl and Holiday Bowl, it is assumed that annual on-site parking lot events will increase, as there will be fewer days (especially prime weekends) lost to in-stadium event parking

• Scenario 3 (Charger leave Qualcomm Stadium and San Diego market immediately): With the immediate departure of the Chargers, Qualcomm Stadium will gain 10 weekend days annually during which parking lot events can be hosted, increasing the opportunity to drive events to the lot during those times

Financial Analysis

Event Estimate

Qualcomm Stadium

200

225

250

275

300

2011-2020 2011-2015 2016-2020 2011-2020


242 242

259 259

Parking Lot Events

May 3, 2011

• AECOM estimated the annual attendance at Qualcomm Stadium for each of the three scenarios

• Scenario 1 (Chargers stay at Qualcomm Stadium): Qualcomm Stadium operates at its current level receiving approximately 1.1 million attendees annually over the next 10 years (2011-2020)

• Scenario 2 (Chargers leave Qualcomm Stadium after 5 years but stay in San Diego market): Between 2011-2015, Qualcomm Stadium receives the same level of attendees. However, between 2016-2020, with the assumed departure of the Chargers, SDSU, Poinsettia Bowl and Holiday Bowl, annual attendance is estimated to drop to less than 100,000

• Scenario 3 (Charger leave Qualcomm Stadium and San Diego market immediately): With the immediate departure of the Chargers, attendance is assumed to drop significantly, however, it remains at approximately 400,000 with SDSU, the Holiday Bowl and Poinsettia Bowl remaining as tenants at the building

Financial Analysis

Attendance Estimate

Qualcomm Stadium

0

250

500

750

1,000

1,250

2011-2020 2011-2015 2016-2020 2011-2020


1,051 1,051

84

405

Annual Paid Attendance (000)

May 3, 2011

• AECOM estimated the annual operating profile for Qualcomm Stadium for each of the three scenarios

Financial Analysis

Projected Operating Profile

• Revenues may include:

– Ticket sales

– Luxury suites/Club seats

– Concessions and novelty sales

– Parking

– Advertising

– Naming rights/sponsorships

– Facility rental fees and lease income

– Other

Qualcomm Stadium

• Estimated expenses may include:

– Event-related expenses

– Parking/security/admissions

– Advertising

– Maintenance

– Utilities

– Insurance

– General administration (including salaries, wages and benefits)

– Management fees, as appropriate

– Capital replacement

– Other

May 3, 2011

• AECOM estimated the annual operating profile for Qualcomm Stadium for each of the three scenarios

• Scenario 1: Chargers stay at Qualcomm Stadium (2011-2020)

– Revenues are projected to increase from an average of approximately $7.8 million annually (2011-2015) to $9.2 million annually (2016-2020), primarily due to the increases in Chargers Rent as outlined in the Lease Agreement with the City of San Diego

• For 10 games including Preseason and Regular Season, but no Playoffs, the Chargers pay a rent of $2.5 million annually (2004-2012); $3.0 million annually (2013-2016); $4.0 million annually (2017-2020)

• City receives an early termination fee based on schedule in slide 46

– Expenses are projected to increase at a market average of 2.5% annually from their current level of $18.4 million in the first five years (2011-2015) to $20.8 million in the last five years (2016-2020) of Scenario 1

– The deficit from operations (excluding bond debt service) is assumed to increase from approximately $10.6 million annually to $11.6 million annually between 2011-2020

Financial Analysis



• Scenario 2: Chargers leave Qualcomm Stadium after 5 years (after 2015 NFL season) but stay in San Diego market

– After remaining at the status quo for the first five years, revenues are projected to decrease from $7.8 million annually (2011-2015) to $1.8 million annually (2016-2020), due to the loss of rent from the Chargers, SDSU, the Holiday Bowl and the Poinsettia Bowl and other large scale stadium events such as dirt shows and concerts, which are assumed to go to the new building in the San Diego market

• The fees received for the Chargers early termination (based on the schedule in slide 46) would be in addition to these revenues

– After remaining at the status quo for the first five years, expenses are projected to decrease from their current level of $18.4 million in the first five years (2011-2015) to $15.6 million in the last five years (2016-2020) due to a lower operating cost based on fewer events

• Costs such as security and other general maintenance are assumed to continue throughout the year despite the assumed loss of tenants between 2016-2020 in Scenario 2. These adjustments to expenses have been incorporated into the projections


Financial Analysis



• Scenario 3: Chargers leave Qualcomm Stadium and San Diego market immediately

– With the immediate departure of the Chargers but retention of SDSU, the Poinsettia Bowl and Holiday Bowl, as well as an increase in parking lot events, revenues are projected at approximately $5.0 million to $5.3 million annually over the next 10 years (2011-2020)

• The fees received for the Chargers early termination (based on the schedule in slide 46) would be in addition to these revenues

– Expenses are projected to increase at a market average of 2.5% annually from their current level of $15.6 million in the first five years (2011-2015) to $17.7 million in the last five years (2016-2020) of Scenario 3

• Costs such as security and other general maintenance are assumed to continue throughout the year despite the assumed loss of tenants between 2011-2020 in Scenario 3. These adjustments to expenses have been incorporated into the projections


Financial Analysis



Financial Analysis


Qualcomm Stadium

Source: AECOM

Note: Assumed annual inflation on expenses of 2.5%. Estimates are based on AECOM’s analysis of the historic and current operations of Qualcomm Stadium based on data received from the City of San Diego (specifically 2006-2010 revenues and expenses to the building), discussions with Stadium management, interviews with San Diego venues and national benchmark stadiums, and the firm’s extensive experience in the sports and entertainment industry

• The fees received for the Chargers early termination (based on the schedule in slide 46) would be in addition to the revenues in each Scenario


Qualcomm Stadium Operations Chargers Stay Chargers Leave; Stay in SD Chargers leave SD

(Annual Averages) 2011-2015 2016-2020 2011-2015 2016-2020 2011-2015 2016-2020

Number of Events 266 266 266 263 273 273

In-Stadium 24 24 24 4 14 14

Parking Lot 242 242 242 259 259 259

Annual Paid Attendance (000) 1,051 1,051 1,051 84 405 405

Operating Revenues (000)

Rental Revenues (000) $4,464 $5,604 $4,464 $1,183 $1,665 $1,709

Other Revenues (000) $3,340 $3,594 $3,340 $653 $3,344 $3,601

Total Operating Revenues (000) $7,803 $9,199 $7,803 $1,835 $5,009 $5,310

Total Operating Expenses (000) $18,386 $20,802 $18,386 $15,601 $15,628 $17,681

Surplus / Deficit from Operations (000) ($10,582) ($11,603) ($10,582) ($13,766) ($10,619) ($12,372)

May 3, 2011

Financial Analysis


Qualcomm Stadium

Source: AECOM

Note: Estimates are based on AECOM’s analysis of the historic and current operations of Qualcomm Stadium based on data received from the City of San Diego (specifically 2006-2010 revenues and expenses to the building), discussions with Stadium management, interviews with San Diego venues and national benchmark stadiums, and the firm’s extensive experience in the sports and entertainment industry

Explanation of Scenarios:Scenario 1: Chargers stay at Qualcomm StadiumScenario 2: Chargers leave Qualcomm Stadium after 5 years but stay in San Diego marketScenario 3: Chargers leave Qualcomm Stadium and San Diego market immediately

$0

$2,500

$5,000

$7,500

$10,000

2011-2015 2016-2020 2011-2015 2016-2020 2011-2015 2016-2020


$7,803

$9,199

$7,803

$1,835

$5,009 $5,310

Total Operating Revenues (000)

May 3, 2011

Financial Analysis


Qualcomm Stadium

Source: AECOM



$0

$5,000

$10,000

$15,000

$20,000

$25,000

2011-2015 2016-2020 2011-2015 2016-2020 2011-2015 2016-2020


$18,386

$20,802

$18,386

$15,601 $15,628

$17,681

Total Operating Expenses (000)

May 3, 2011

Financial Analysis


Qualcomm Stadium

Source: AECOM



($10,582)

($11,603)

($10,582)

($13,766)

($10,619)

($12,372)

($15,000)

($10,000)

($5,000)

$0

$5,000

Surplus / Deficit from Operations (000)


2011-2015 2016-2020 2011-2015 2016-2020 2011-2015 2016-2020

May 3, 2011

Financial Analysis

Projected Operating Profile (Conclusion)

Three Scenarios

Scenario 1: Chargers stay at Qualcomm StadiumScenario 2: Chargers leave Qualcomm Stadium after 5 years but stay in San Diego marketScenario 3: Chargers leave Qualcomm Stadium and San Diego market immediately

• Based on the Three Scenarios reviewed in the Financial Analysis, the projected operating deficit for Qualcomm Stadium is the highest in Scenario 2 when Qualcomm Stadium would not have any anchor tenants and a significantly reduced number of in-stadium large scale events

• In both Scenario 2 and Scenario 3, it is assumed that the number of parking lot events will increase in the years without an anchor tenant, as the parking lot will be available for use on a greater number of dates

• However, the estimated revenues generated by the additional parking lot events are not enough to offset the decline in revenues that will come with the loss of the anchor tenants and events in the Stadium


Financial Analysis

Projected Operating Profile (Conclusion)

• This analysis is solely on the basis of the Operations of Qualcomm Stadium and does not make any judgment on the relative economic impact to the region with or without a major anchor tenant at Qualcomm Stadium or within the San Diego market area

• Finally, it is important to note that Qualcomm Stadium operating at a loss is not a unique example of a major stadium with an NFL franchise operating at a deficit and receiving city funding

– Many city-operated, NFL buildings receive some form of public funding on an annual basis

• For example, Oakland Alameda Coliseum, which receives approximately $14 million annually, and Raymond James Stadium, which receives approximately $3 million from a combination of City and County funds


Financial Analysis

Recommendations

• Based on the Market and Financial Analysis, AECOM has identified the following four areas, in which the City of San Diego might be able to enhance revenues at Qualcomm Stadium

– Current lease arrangements with Holiday Bowl and Poinsettia Bowl

– Ticket distribution deals

– Marketing opportunities with the Gridiron Stadium Network

– Parking lot pricing and events


Financial Analysis

Recommendations (Current Lease Arrangements)

• Holiday Bowl and Poinsettia Bowl Leases– Renegotiate leases, which ended with 2010 games

– Currently, the City receives payment of operational expenses and all revenue from sale of concessions and 100% of parking lot fees in addition to the $10,000 per game rent charge

– Particular area for enhancement is the facility fee

• Current lease agreement clause states – “City is granted the right to charge a per ticket facility fee for both games. City and Association will use their best efforts to mutually agree to the amount of any facility fee charged.” (page 4 of lease agreement)

• However, it appears that no facility fee has been generated from the recent games

• A facility fee of $1.00 would generate up to $100,000 in additional revenue, based on the current combined attendance to the two games

For example, Raymond James Stadium receives a ticket surcharge in addition to payback of operational expenses for the Outback Bowl

– Rental rate

• After examination of the Bowl Association Agreement with the City of San Diego, AECOM believes there is room to increase rent, food and beverage shares and commissions in the new lease


Financial Analysis

Recommendations (Ticket Distribution Deals)

• Qualcomm Stadium currently receives an estimated 4% of gross customer convenience fees from Ticketmaster for events subject to the City Royalty

• Although no two venues have exact ticket distribution deals, based on discussions with other venues and industry professionals, Qualcomm Stadium is receiving below market average fees from their current arrangement

• Among the selected benchmark venues, ticket royalties paid to the building owner range up to 8% of customer convenience fees or as much as $2.50/ticket for anchor tenant events, and $1.25/ticket for other events such as Dirt Shows

– Based on the current agreement with Ticketmaster, the City of San Diego only receives $0.25/ticket sold by Ticketmaster, and that fee only applies to Chargers games, the Holiday Bowl, dirt shows, and international soccer matches

• AECOM recommends adding ticket royalties for the Poinsettia Bowl like those existing for the Holiday Bowl

• Ticket royalties paid to the City for Chargers, Holiday Bowl, Poinsettia Bowl, dirt shows, soccer games should be increased to $0.50/ticket to bring Qualcomm Stadium’s agreement with Ticketmaster closer to market rates


Financial Analysis

Recommendations (Gridiron Stadium Network)

– AECOM reviewed other marketing opportunities for bringing events to Qualcomm Stadium such as the Gridiron Stadium Network (GSN) and analyzed its value to the City of San Diego

• Other venue marketing networks (such as Venue Coalition for arenas) and event and venue operators (such as AEG) exist. However, GSN deemed most appropriate and applicable for Qualcomm based on building type and operational structure

Overview of Gridiron Stadium Network

– Founded in 2005, network of 10 NFL stadiums and 1 Major League Soccer (MLS) stadium

– Optimize opportunities to increase stadium events and attendance

– Knowledge sharing

– $15,000 annual fee

• Annual meeting

• Conference calls

• Training

• Extended network

– Since 2005, GSN has co-promoted 19+ 100% capacity concerts in member stadiums


Financial Analysis

Recommendations (Gridiron Stadium Network)

Return on Investment

– Average metrics for GSN events 2005-2011 not including Stock Shows and events that would not be hosted at Qualcomm:

• 1.5 events per venue

• Average ticket price of $75

• Average % occupancy of 95% and tickets sold of 41,000 per event

– Assuming Qualcomm Stadium achieves similar performance, potential revenues are as follows:

• 1.5 events per year of 40,000 attendees/event

• $75/ticket (assumed that the act will retain all of the ticket revenues based on typical major act promoter agreements)

• $17.50/capita concessions and novelty sales

• $5.00/capita parking revenue (based on $15 per car and assumed 3.0 persons/car)

– Concessions and novelties estimated to generate $1 million+ in revenues before COGS

– Parking revenues estimated to generate approximately $300,000 in revenues before parking expenses

– The GSN venues annually generate an estimated $1.3 million+ of revenues before COGS and expenses from GSN co-promoted events

– It is not possible to attribute directly concerts and events to membership in the GSN, however, the GSN network provides venue operators a significant avenue by which to drive events and revenue to the facility

– Finally, it is important to note that there is a risk involved with membership and that the City will be liable for the success or lack thereof of events


Financial Analysis

Recommendations (Parking Lot Events and Pricing)

• Based on the Market Analysis, the Benchmark Venues and Parking Lots, AECOM concluded the following:

– Qualcomm Stadium significantly outperforms the benchmarks in terms of generating on-site events in its parking on non-stadium event days

– However, Qualcomm Stadium has a tighter range and less differentiation in pricing by event type in its parking lot lease rates than the other benchmarks

– Only three of the 11 identified benchmarks use rate cards

– Based on the discussions with parking lot event promoters and analysis of the benchmarks including population per available venue, supporting household income and on-site dedicated parking lot capacity, AECOM believes Qualcomm Stadium has the opportunity to drive more revenue from its parking lots on a per event basis

– Qualcomm is performing significantly above the industry average for Parking Lot Events, but on average leases the lot at a lower level than other facilities, suggesting there may be room to broaden the range of event pricing and price more on market demand as opposed to a predetermined rate


Financial Analysis

Recommendations (Parking Lot Events and Pricing)

• Qualcomm Stadium should consider the following:

– Broaden the range of pricing by event type

• All of the price ranges for the identified benchmarks are wider than Qualcomm’s evidenced by the benchmarks with rate cards

• The average price per parking lot event at the benchmark is approximately $3,000 whereas Qualcomm’s average is closer to $2,500 per event

– Price on an event by event, market-driven basis as opposed to a set rate card

• Only 3 of the 11 national benchmarks, as well as Del Mar Racetrack in San Diego, have rate cards (see Appendix for rate cards)

• The other 8 benchmarks price parking lot events on a per event basis

• Based on discussions with venue operators, the per event pricing allows for greater flexibility in pricing

– Important to note that Qualcomm has significantly more events than any of the other benchmarks, which may in part be a result of the lower pricing per event

• Raising pricing will not necessarily allow Qualcomm to maintain the current number of events it generates


Financial Analysis

Recommendations (Parking Lot Events and Pricing)• AECOM recommends implementing a rate card that sets minimums and allows for

more pricing flexibility

– Recommended minimum rates are as follows:

– Based on pricing and event mix at the benchmarks and discussions with promoters of major parking lot events in Southern California, AECOM recommends setting the minimum price per event for Qualcomm parking lot events at approximately 20% to 40% higher per event than the current rate card

– This will allow Qualcomm to drive more revenue per event but remain competitively priced within the market and not sacrifice the existing competitive pricing advantage

Qualcomm Stadium

Parking Lot Event Current Rates Recommended Minimums

Non-Profit Weekday $1,000 $1,200

Non-Profit Weekend $2,000 $2,400

For Profit Weekday $2,000 $2,750

For Profit Weekend $4,000 $5,500

Commercial Events $5,000 $7,000

Event Parking (per car) $15 $20

Event Parking (per RV) $46 $60

May 3, 2011

Appendix


Appendix

Qualcomm Stadium

• AECOM reviewed the historic and current profiles of Qualcomm Stadium’s anchor tenants (San Diego Chargers and San Diego State University Aztecs) and other events in order to understand the market, event and revenue potential at Qualcomm Stadium

Football in San Diego/Southern California

– Southern California has a history of hosting professional football

Los Angeles Dons of the All American Football Conference (1946 – 1950)

Cleveland Rams (1946) became the first NFL franchise to locate in Los Angeles and then to Anaheim Stadium for 1980 and left Southern California altogether in 1995

Los Angeles Chargers (1960) at the Los Angeles Memorial Coliseum

Los Angeles Raiders (1982 – 1994) at the Los Angeles Memorial Coliseum

– Currently the only NFL team located in Southern California is the San Diego Chargers

– Other major Southern California and San Diego football includes: Mountain West Conference (San Diego State), the Holiday Bowl and Poinsettia Bowl, Pacific-10 Conference (USC and UCLA), and West Coast Conference (University of San Diego)


Appendix


PETCO Park

– Opened in 2004 with a seating capacity of approximately 42,500

– Estimated construction costs are approximately $450 million

• Public Financing: 57%: $206 million from the city, $76 million from the county, $21 million from the Port of San Diego San Diego

• Private Financing: 43%: $146 million from the San Diego Padres

– Architects Populous and Antoine Predock’s designed the venue so that the ballpark’s concourses are open not only to the playing field but also to the surrounding city

– PETCO purchased naming rights for $60 million which will expire in 2025

– Other events include concerts, convention center overflow, networking receptions, social events

– Parking lot events include concerts, street fairs, convention center overflow, closing ceremonies for organizations


Appendix


Torero Stadium

– Torero Stadium was built in 1961 and is the home of the University of San Diego Football and Soccer programs

– Seating capacity is approximately 6,000 at the stadium for Pioneer Football League action, as well as West Coast Conference Soccer play

– The stadium has been through two phases of renovation totaling over $3.5 million dollars

– In 2001, the stadium underwent renovations including upgraded lighting system, re-paving of walkways, installation of a new state of the art sound system and a Daktronics video board

Qualcomm Stadium

– Other events held at the stadium include lacrosse and former women’s professional soccer

May 3, 2011

Appendix


Valley View Casino Center (formerly San Diego Sports Arena)

– The arena was built in 1966 by Robert Breitbard

– The arena can seat up to 16,100 for wrestling and boxing matches

– Naming rights have been purchased by Valley View Casino for $1.5 million and expires in 2015

– Total construction costs are estimated to be $6.4 million

– Other events held in the arena include: arena football, ice hockey, basketball, concerts, family shows and mixed martial arts/wrestling

– Parking lot events include flea markets


Appendix


Viejas Arena

– Viejas Arena, located on the San Diego State University (SDSU) campus, is the home of the SDSU Aztecs men’s and women’s basketball teams

– Viejas Arena opened its doors in July of 1997 and seats 12,414 for basketball and up to 12,845 for concerts and is also used as a large concert venue

– Viejas acquired naming rights to the arena under a 10-year naming rights agreement announced March 17, 2009

Qualcomm Stadium

• The naming rights agreement with the Viejas Band of Kumeyaay Indians went into effect July 1, 2009 and will pay the university about $6 million over the next 10 years

• Total construction costs are estimated to be approximately $29 million

• Other events held at the arena include basketball, concerts, cheer competitions, ceremonies

May 3, 2011

Appendix


Cricket Wireless Amphitheatre

– Cricket Wireless Amphitheatre, formerly known as Coors Amphitheatre, is a 19,492-seat amphitheatre

– It is the largest concert venue of its size in the San Diego area and is owned and operated by Live Nation

– During the spring, summer and fall months it is used for most first-tier concert tours, due primarily to its capacity


Appendix

Benchmark Stadiums

Los Angeles Memorial Coliseum

Qualcomm Stadium

• The Los Angeles Memorial Coliseum opened in Los

Angeles, California in 1923 and has a capacity of

approximately 93,600

• The owner is the State of California and the City of

Los Angeles

• The Los Angeles Coliseum Commission operates

the stadium

• The primary tenant is the University of Southern

California’s football team

• Stadium has undergone numerous renovations

• Non-football events include soccer, concerts,

X Games, films and social events

• Parking lot events include marathons

May 3, 2011

Appendix

Benchmark Stadiums

• The Rose Bowl opened in 1922 in Pasadena, California

• Capacity is approximately 92,500

• Stadium owner is the City of Pasadena and the Rose Bowl

Operating Company operates the stadium

• Main tenants are the University of California Los Angeles

football team and the annual Rose Bowl game

• The Rose Bowl has approximately 44 suites with pricing

ranging from $2,850 to $12,635


• Non-football events include soccer, concerts, fireworks shows

and commencement ceremonies

• Parking lot events include ride and drive events, film crew

parking, small festivals, filming, RV & car sale events, flea

market and staging areas for marathons

Qualcomm Stadium

Rose Bowl

May 3, 2011

Appendix

Benchmark Stadiums

Candlestick Park

Qualcomm Stadium

• Candlestick Park is located in San Francisco,

California and opened in 1958 with a capacity of


• The City of San Francisco owns the stadium

• Primary tenant is the San Francisco 49ers

• Holds 94 suites ranging from $50,000 to $150,000; no

club seats


• Non-football events include soccer, concerts, off-road

races, commercial shoots, filming, social events,

religious rallies, 49ers school events

• Parking lot events include ride and drive events,

antiques show, car shows, fireworks show

May 3, 2011

Appendix

Benchmark Stadiums

EverBank Field

Qualcomm Stadium

• EverBank Field is located in Jacksonville, Florida and

opened in 1955 and renovated in 1995

• The stadium has a capacity of approximately 82,000

• Stadium owner is the City of Jacksonville

• Primary tenant is the Jacksonville Jaguars

• EverBank Field has approximately 90 suites ranging

from $75,000 to $135,000; approximately 10,500 club

seats ranging from $1,200 to $1,925

• Non-football events include concerts, religious rallies

and monster truck events

May 3, 2011

Appendix

Benchmark Stadiums

Raymond James Stadium

Qualcomm Stadium

• Raymond James Stadium opened in 1988 in Tampa,

Florida


• Stadium owner is the Tampa Sports Authority

• Primary tenants are the Tampa Bay Buccaneers and

University of South Florida Bulls and the Outback Bowl

• Raymond James Stadium has 195 suites ranging from

$45,000 to $150,000; approximately 12,000 club seats


• Estimated costs at the time of construction were $168.5

million

• Non-football events include soccer, concerts, equestrian

show jumping and monster truck events

• Parking lot events include Christmas tree sales,

fireworks show, auto shows, concerts and circus

May 3, 2011

Appendix

Benchmark Stadiums

LP Field

Qualcomm Stadium

• LP Field opened in Nashville, Tennessee in 1999


• Stadium owner is the City of Nashville

• Primary tenant is the Tennessee Titans

• LP Field has 175 suites ranging in price from $52,000

to $125,000; approximately 9,600 club seats ranging

from $995 to $2,495

• Estimated construction cost of $292 million

• Non-football events include concerts, festivals,

meetings and social events

May 3, 2011

Appendix

Benchmark Stadiums

Angel Stadium of Anaheim

Qualcomm Stadium

• Angels Stadium of Anaheim is located in Anaheim,

California and opened in 1966 with a capacity of


• The City of Anaheim owns the stadium

• Primary tenant is the LA Angels of Anaheim

• Angel Stadium holds approximately 74 suites ranging in

price of approximately $57,000 to $189,000; club seats

total to 5,000 ranging in price of approximately $1,640 to

$3,444

• Non-baseball events include concerts, monster truck

events, supercross, religious rallies, marathon and filming

• Parking lot events include car shows, ride and drive

events, car drifting events, charity walks, concerts, Angel

fan fests

May 3, 2011

Appendix

Benchmark Stadiums

Dodger Stadium

Qualcomm Stadium

• Dodger stadium opened in Los Angeles, California in

1962


• Stadium owner is the McCourt Family

• Primary tenant is the Los Angeles Dodgers

• Dodger Stadium has 33 suites ranging in price from

$150,000 to $300,000; club seats total to 565 ranging

from $2,592 to $2,592

• Stadium has undergone numerous renovations since

opening

• Non-baseball events include concerts, monster truck

events, supercross, religious rallies, marathons, filming,

social events and conventions

• Parking lot events include RV shows, flea market,

concerts, marathons and filming

May 3, 2011

Appendix

Benchmark Stadiums

Sun Life Stadium

Qualcomm Stadium

• Sun Life stadium opened in Miami, Florida in 1987


• Stadium owner is Stephen M. Ross

• Main tenants are the Miami Dolphins, Florida Marlins

and the annual Orange Bowl game

• Sun Life Stadium has 183 suites ranging in price from

$50,000 to $300,000; club seats total to 10,209


• Stadium has undergone numerous renovations since

opening

• Non-baseball and football events include soccer,

basketball, concerts, monster truck events, circus,

Australian football, trade shows, WWE’s WrestleMania,

trade shows and filming

• Parking lot events include RV and boat shows

May 3, 2011

Appendix

Benchmark Stadiums

Oakland-Alameda County Coliseum

Qualcomm Stadium

• Oakland-Alameda County Coliseum is located in

Oakland, California and opened in 1968 with a

capacity of approximately 62,500

• The City of Oakland and Alameda County own the

stadium

• Primary tenants are the Oakland Raiders and the

Oakland Athletics

• The Coliseum holds 143 suites ranging in price from

$30,000 to $150,000; club seats total to 9,000 ranging

from $1,260 to $1,510

• Estimated construction cost of $25 million

• Non-baseball and football events include soccer,

concerts and conventions

• Parking lot events include car clubs, vehicular testing

and basketball tournaments

May 3, 2011

economics at aecom (sports) - voice of san diego€¦ · 04/05/2013 · –qualcomm stadium...

Documents