Press Box Article

 
At the Linc: License to deal
 
Philadelphia Business Journal
John George
 
Friday, May 8, 2009
 
 
The downturn in the economy has created a buyers’ market for property in general, and one piece of real estate exclusive to South Philadelphia in particular.

Prices have dropped by 20 percent this year, on average, for “stadium builder licenses” at Lincoln Financial Field.

Such licenses, more commonly referred to as personal seat licenses, are a fairly recent revenue-producing tool used by some professional sports teams — typically when opening new stadiums. Those teams require fans to purchase a seat license for the “right” to buy season tickets for that seat.

And the licenses aren’t cheap.

Prior to the opening of Lincoln Financial Field in 2003, the Philadelphia Eagles sold stadium builder licenses for about 29,000 of the stadium’s 68,000 seats. Season tickets for the seats in the lower level are $600 or $700; and $3,500 for the more private club level. Licensing fees ranged between $1,530 and $3,125, depending on the seat location. The fees raised $70 million for the Eagles, which had no trouble selling out the inventory.

Once a fan purchases a stadium builder from the Eagles, he or she owns it: It is his or hers to keep or sell.

The price on the open market for PSLs have declined in the past year.

“People don’t have the discretionary cash to spend right now,” said Kyle Burks, president and founder of the Houston-based Season Ticket Rights, an online marketplace for seat license buyers and sellers. “We’ve seen an increased supply in secondary market and decreased prices. People are still buying [seat licenses], but they’re buying at lower prices.”

Burks said the state of the economy and the team’s performance are the two key factors that contribute to what fans are willing to pay.

Lower-level SBLs at Lincoln Financial Field that were selling, on average, for $7,950 two years ago can be picked up for just over $6,000 today. Club-level SBLs selling for $5,800 in 2007 have plunged to $1,583, on average, this year.

Those figures come from the Season Ticket Rights, which currently has about $750,000 in seat license offers for Lincoln Financial Field on its Web site.

Season Ticket Rights is not the only Web site facilitating the sale of SBLs at Lincoln Financial Field. Philadelphia-based Seatmeat Inc. also has a site — phillysbl.com — dedicated to such transactions.

Burks, a former Deloitte & Touche accountant, got the idea to create Season Ticket Rights in 2006 after trying to help his father buy four seat licenses.

The only way they could find a potential seller was by placing a classified ad. “We met a guy in a mall and handed him a $20,000 check,” Burks recalled. “He gave us a transfer form and we had no way of knowing whether it was legitimate. (It was.) I thought there had to be a better way to do it. So, I quit my job and started this.”

Season Ticket Rights plays matchmaker for people wanting to buy or sell personal seat licenses, parking rights and even positions on a team’s season ticket waiting list.

The company has formed partnerships with four National Football League teams and three Major league Baseball teams to be their exclusive seat license reseller. For those football teams for which it has no contract, which includes the Philadelphia Eagles, it handles deals on its Web site. The company collects a 5 percent commission on all transactions.

The Eagles are not looking to create any partnerships with a seat license reseller, at this time.

“Over the years we have had numerous discussions with a number of companies offering to assist in the marketing of stadium builder licenses,” the team said in a statement. “We have also held discussions with our fans and season ticketholders, and to date they, and we, are comfortable with the verification support we provide.”

To sell an SBL, the Eagles require fans to fill out transfer paperwork, which includes an official ticket agreement and requires notarized signatures from both the buyer and seller.

Burks said his Web site handles the resale of “pretty much everything except tickets. We had one person pay $1,500 for a spot on the Baltimore Ravens waiting list; it’s a crazy world.”