Press Box Article

 
MainStreet Explains: What are Personal Seat Licenses?

MainStreet.com

Evan Lips

 

Link to Article on MainStreet.com

July 8, 2008

The Carolina Panthers became the first pro sports franchise to sell personal seat licenses, or PSLs, when the team joined the NFL in 1996. Carolina fans were not deterred from paying an extra fee to cover the cost of reserving a season ticket -- all seats were sold out by the end of the first day of sales.

These one-time payments for permanent control of a seat have seen their “value” increase dramatically since 1996. Then, PSLs ranged from $600 (for upper level seats) and $5,400 (for premium seats.) Now, the price of these same PSLs at the Panthers' home field, Bank of America Stadium (BAC), range from $3,000 to $20,000. And as team owner Jerry Richardson pointed out in 1996, the 40,000 fans that purchased a PSL helped ensure that the stadium would be built without a dime from the taxpaying public.

Other teams, such as the New York Giants, are following suit.

“Once you purchase a PSL, you can control your seat for as long as the Giants continue to play in the new stadium [New Meadowlands Stadium, scheduled to open in 2010],” wrote John Mara and Steve Tisch, co-owners of the New York Giants, in a letter that was mailed to season ticket holders on June 26. “This means that, in addition to having the right to purchase the same season seats every year, you will also have the ability to transfer your PSL to other Giants fans, including to unrelated third parties.”

The Dallas Cowboys are another NFL tema with plans to build a new stadium, partly financed by PSLs.

Of course, if the Giants advertised PSLs as an "investment",it’s certain that it would draw the attention of the Securities and Exchange Commission (as Dallas Morning News reporter Suzanne Marta pointed out recently.) But it’s exactly that type of investment-minded thinking that helps fans see beyond the initial cost of reserving season tickets. Moreover, with the assistance of websites that oversee seat license transactions, fans who no longer wish to renew a PSL are able to do so -- and potentially earn a profit from the original “investment.” One such site is Kyle Burks’ SeasonTicketRights.com.

“When I first heard that teams were selling the rights to buy season tickets, I saw how difficult it was for people to buy or sell seat licenses, whether they used newspaper ads, message boards, or other online posting Web sites,” states Burks on his site. “My main goal in building SeasonTicketRights.com was to provide an online marketplace for seat licenses that guaranteed the safety of both the buyer and seller.”


Interested in getting in on the action? Here's what you should know first:

WHAT DO I GET WITH A PSL?
A PSL is a one-time payment for permanent control of a seat. In the Giants’ case, for example, the purchase guarantees the owner’s right to purchase a season ticket as long as the Giants play in the new stadium. It also “provides the purchaser with control of successorship of the tickets, a benefit now only available for direct family members.” The PSL stays active on the condition that the season tickets are purchased annually.

SOME PSLS COST $1,000, WHILE OTHERS COST $20,000: WHAT’S THE DEAL?
According to Mara, “90 percent of the seats in the upper bowl will have $1,000 PSLs. Fewer than 5,000 seats, in a building which will have a capacity of 82,500, will be at the highest price.” These seats will be scattered throughout the lower bowl in prime viewing locations.

HOW MANY OTHER TEAMS IN THE NFL SELL PSLS?
It’s a practice that has definitely picked up speed during recent years as an alternative to taxpayer-funded stadiums. Beginning with Carolina, twelve of the other 32 NFL teams have instituted a PSL policy. In Dallas, the Cowboys’ new stadium (scheduled to open in 2009) will feature PSLs costing up to $150,000 for elite club level seats. (However, 20 percent of the seating bowl in Dallas will be exempt from PSLs.)

IS IT WORTH THE EXTRA CASH IF I VIEW MY PSL AS AN 'INVESTMENT?'
Not necessarily. While it is possible to make a profit from selling a PSL – as evidenced by the Carolina Panthers – it’s never a good idea, especially if fans can’t afford the extra punch to their budget. While the value of most PSLs will appreciate over time, it’s never a sure bet. For instance, when the Oakland Raiders instituted a PSL policy in 1995, fans who purchased them discovered that the license was rendered worthless as Oakland failed to sell out their games and the team abandoned the policy.

WILL NON-SEASON TICKET HOLDERS AND THOSE ON WAITING LISTS FINALLY HAVE A CHANCE TO PURCHASE THE RIGHTS TO THEIR OWN SEAT?
Nothing has been finalized as of yet. A spokesman for the Giants stated that “brochures and PSL applications will be delivered in stages to allow sales personnel the appropriate amount of time to work with each season ticket holder.” Moreover, Giants Stadium LLC “expects to publicly announce the complete pricing packages later this month.”

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