Press Box Article

PSLs Could Be an Investment Tool


The Star-Ledger

Maura McDermott


July 20, 2008

Pat and Teresa Smart control eight choice seats at the Eagles' football stadium in Philadelphia, and more than 30 scattered around the Ravens' stadium in Baltimore.


The value of their portfolio, according to the Crystal Beach, Md., couple: $280,000 and rising.


"If you look at the stock market, that hasn't been doing so great and neither is the real estate market," said Teresa Smart, 49. "This is staying pretty steady."


The Smarts are not just season ticket holders. They are among a growing population of sports fans across the country who buy "personal seat licenses," paying a onetime fee for the right to buy season tickets. Such licenses can be bought and sold like liquor licenses or taxi medallions and, where state law allows, holders can sell their game tickets for a profit.


Whether to join that group - and invest a significant chunk of savings in a few square feet of real estate in a football stadium - is a decision now being confronted by Giants fans.


The team unveiled details last week of the personal seat license fees at their new stadium, opening in 2010. The license fees range from $1,000 to $20,000, and game tickets will cost $85 to $700.


The value of personal seat licenses is clear: They are expected to raise $371 million to help fund construction of the $1.6 billion venue to be shared with the Jets, according to team co-owner John Mara.


But are they a wise investment for fans?


There is a good chance the value of Giants licenses will rise, although buyers shouldn't count on it as a financial boon, said sports finance experts.


It also helps that the demand for season tickets is much greater than the supply, industry experts said. There are 82,500 seats in the new stadium, and the Giants have a 130,000-name waiting list.


"It's such a scarce commodity in this area," said Lawrence Swift, a prominent sports industry attorney. "The only place that a person would get rid of a license or obtain a license is on the secondary market."


The highest-quality seats will always fetch a good price, said Marc Ganis, a leading consultant to the sports industry.


In the New York market, he said, "There's always someone who wants to buy the best of the best."


Kyle Burks, who runs, an online marketplace for PSLs, said teams typically sell PSLs for less than they're worth, because they're unloading so many at one time and they want to make a big splash.


"They want to sell out, and they want to sell out immediately," Burks said.


For a popular team whose licenses are all but certain to rise in value, he said, "it kind of becomes a no-brainer for a lot of people. They say, this is worth $20,000 and I can pay $5,000 for it. Why would I not do this?"



A losing streak or ever-worsening economy could hold down the license values, industry experts cautioned.


"It's the same as buying a house," Swift said. "Don't buy a house for an investment. Buy it because you're going to live in it and use it."


"If the team starts stinking up the joint, basically it's just an added cost to the ticket," Ganis said. "When you offload them, if the demand isn't there, then you take a hit on the price."


That's what happened to Ron Meyers, who spent $5,400 for two PSLs at the Charlotte Panthers' new stadium in the mid-1990s. The team's performance "went into the toilet," and he ended up selling the PSLs for a $400 loss, he said.


"If you're buying the PSL for financial gain, then if the team doesn't improve or stay as a contender, you're in trouble," the 75-year-old warned.


Even Mara chose his words carefully when asked about the potential upside of PSLs.


"I would never encourage anyone to buy it as an investment," Mara said last week on a conference call with reporters. "We want people to buy it because they want to go to the games."


But, he said, "I'm certainly aware that in other markets the values have gone up."


As for a paragraph in a team brochure about PSLs stating a license "is not intended to be an investment," Mara explained, "we say that for legal reasons."


Joe McHugh, 44, a financial adviser who lives in Westfield and holds two Giants season tickets, said he would hesitate to spend money on PSLs.


"I've got two kids and a wife and a home and it seems that 10 grand would be used better elsewhere," he said.


But, he said, "I think long term it's a good investment. ... They've put a good product on the field, obviously they're going to have a good stadium. There's probably always going to be a market out there."


The potential profits did little to ease some fans' grumbling about the licenses.


The fees are "highway robbery," said Steve Trevelise, 51, a Giants fan since he was 12.


"If you're going to invest $20,000 in something, there are probably things that will bring you a higher return than football tickets," he said. "For $20,000, I will go to Circuit City and I will say, 'Give me the best home theater you ever saw, and give me catering for every game,'" he said.


But whether or not it's a good investment, Trevelise conceded, he's so devoted to his team he'll probably buy a license anyway.


"If you don't do it, you're going to regret it for the rest of your life," he said. "It's like being in love. Yeah, it drives you nuts, but what are you going to do? And they know it."