A recent surge in popular concerts and other high-profile events at Petco Park is yielding millions for the Padres and the city of San Diego under a decade-old revenue-sharing deal that envisioned this kind of surge. Net revenues from non-baseball events at Petco have roughly tripled since before the pandemic, climbing from an average of about $5 million per year between 2014 and 2019 to about $16 million a year in 2024. Because those revenues are split 70% for the Padres and 30% for the city, the city’s share has risen from about $1.5 million per year to nearly $5 million this year. And that doesn’t include higher city hotel tax revenue generated by people who visit San Diego to attend high-profile events at Petco Park, or higher city sales tax revenue generated at bars and restaurants near the stadium. To create this kind of surge, the City Council in 2012 dramatically revamped the venue’s revenue-sharing deal to give the Padres more financial incentive to book lucrative events more frequently. The revenue shares were flipped, with the city’s share dropping from 70% to 30% and the Padres’ share jumping from 30% to 70%. The Padres were also granted the ability to shrink the city’s share further by changing how net revenues are calculated compared to gross revenues. Under the old model, the Padres couldn’t count money they spend on capital projects as expenses for events. But the new model allowed this, widening the gap between gross revenue and net revenue — and potentially shrinking payouts to the city. While the changes on the surface appeared likely to reduce the city’s revenue from Petco events, council members said they were confident the effects of the new rules would be outweighed by giving the Padres more incentive to book lucrative events. Their predictions have been validated. Before the agreement was revamped, the city’s annual payout from Petco events averaged about $650,000, less than 15% of the $5 million the city will get in 2024. The city’s annual payouts almost immediately doubled under the new deal, including $1.3 million in 2014 and $1.5 million in 2015. But revenue growth slowed after that, and the city’s annual payout was just under $2 million in 2019. Then came the pandemic, which made events like concerts impossible for much of 2020 and parts of 2021. The city’s payout dropped to $300,000 in 2020 and to $1.6 million in 2021. Things changed dramatically after the pandemic, with the city’s payout in 2022 rising sharply to $4.6 million. It dipped a bit in 2023 to $3.1 million, then surged this year to just under $5 million. While the Padres aren’t required to reveal the revenue generated by individual events, the list of high-profile concerts this year clearly played a key role in the revenue jump. Those concerts have included Sting, Billy Joel, Pink, Green Day, Foo Fighters, Journey and Def Leppard. Petco also hosted its first rodeo in 2024, a three-day event in January that will return next month. The event was such a success that the Padres are expanding it this year, including adding concerts all three nights. Other factors in the revenue surge include inflation, which has been particularly sharp for concert tickets as plummeting recording sales have made live performances more crucial to artists’ financial success. Padres chief executive Erik Greupner said the surge in events and revenue is a good thing for the city as a whole. “In partnership with the city of San Diego, the Padres are committed to delivering on our promise that Petco Park will be ‘more than a ballpark,’” he said by email. “As a premier entertainment destination and year-round event venue, Petco Park not only contributes to a more vibrant, thriving downtown and regional economy, but also generates significant revenue to the city.” Another benefit of the revamped deal is a requirement that the Padres spend at least $1 million per year on capital improvements and ballpark infrastructure projects. The goal was preventing decay at Petco similar to what city officials had to cope with at Qualcomm Stadium in Mission Valley. Under the new deal, the Padres were required to spend at least $1 million a year, and they were incentivized to spend even more because they could start counting that money against revenue to reduce payouts to the city. Among the recent examples are improvements the Padres made to the Gallagher Square viewing area. The cost was $677,000, and the Padres deducted $68,000 per year from the city’s payout for three consecutive years. One element of the revamped deal that seems like an amusing footnote now is a guarantee that the city’s annual payout wouldn’t drop below $300,000. That deal point was considered so important by city officials in 2012 that they successfully negotiated to have the figure rise each year based on inflation metrics. The deal point mattered only once, during the pandemic in 2020.