Rafi Mohammed

$20,000 = The RIGHT to Purchase New York Giants Season Tickets

Posted on July 21st, 2008 (3 Comments)

The New York Giants football team recently announced that its fans are going to have to pony up between $1,000 - $20,000 for a personal seat license (PSL) which grants them the right to purchase one season ticket. For 20 grand, you have lifetime rights to purchase a lower level field seat for every Giant’s home game (per game prices are $160). Once you buy a license, you must purchase season tickets every year – if you don’t, you lose your license (and your money). That said, you are allowed to resell your license.

The obvious question, of course, is why not just raise ticket prices instead of requiring a massive upfront payment? A few ideas that rationalize this unique two part pricing strategy:

  1. Most PSLs are offered when a new stadium is built. These upfront fees provide a hefty down payment for a $1+ billion stadium.
  1. “Low price goodwill” (wink-wink). Upfront fees help keep per-game ticket prices relatively low. While per game prices may appear reasonable - good luck getting them at face value if you don’t own a PSL. Ticket reseller Stubhub estimates that the average ticket resold on its site for a Dallas Cowboys’ home game was roughly double the ticket’s face value.
  1. Why not…the market is embracing this pricing strategy. A good friend of mine was on the Washington Redskin’s waiting list for 27 years before he was offered the chance to purchase season tickets – that’s a really long wait! Seat licenses allow teams to capture the value of “going to the head of the line.”

Two interesting factoids:

  1. Wikipedia reports that PSLs are being used by football, baseball, hockey, basketball, car racing, hockey, and rugby venues. Football teams seem to be quickly adopting the PSL strategy.
  1. PSL resale prices fluctuate. For example, according to the Dallas Morning News, the Carolina Panthers started selling their PSLs in 1996 for between $600 – $5,400. Today these licenses are selling for $3,000 - $20,000. Conversely, the Oakland Raiders started a PSL system in 1995 only to eliminate the fees in 2005 due to low demand.

A word of caution to the National Football League: don’t lose the forest for the trees. While these sophisticated pricing practices may be great at squeezing every nickel of value out of fans attending games, they risk alienating fans who feel football is becoming too expensive. The NFL’s primary revenue comes from the $3+ billion it earns from annual broadcasting rights. High ticket prices could lead to fans abandoning the sport – which will shrink the forest (lower television revenues).

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Readers' Comments on This Blog Entry

From Steve on July 22nd, 2008
Instead of spending a bunch of money on a PSL, spend substanitially less on a state of the art, giant flat screen and see football the best way, ON TV!!! You could also buy a lifetime supply of beer.I wouldn't go through the hassle of going to games every weekend if you gave the seats (and the PSL) to me. It's about an 8-10 hour process to go to each game. And who wants to miss out on those $8.00 12 oz beers. The Raiders thing is a fiasco. The city of Oakland is covering the Raiders shortfall each year (which has been more substantial than anyone could have imagined). Oakland also has one of the worst infrastuctures and school systems in the State of California. And Al Davis keeps talking about moving BACK to L.A. I enjoy football, but I never forget that it's just a business. Uhh, where are the Sonics?
From SAM SEMINOLE on August 17th, 2008
TELL THE JINTS TO GO JUMP IN THE LAKE--BUY A ROOMSIZED TV AND GET A BETTER SEAT AND HAVE THE BENEFIT OF A REFRIGERATOR AND A JOHN NEARBY.MOST SEATS IN THE STADIUM ARE NOT AS GOOD AS TV AND WHO NEEDS THE MESS IN THE PARKING LOT. GEEZ- IF YOU HAVE TO GRILL DO IT IN THE MUCH BETTER ENVIRONMENT OF YOUR PATIO. DRINK UP AND ENJOY THE GAME. I AM A LOYAL JINTS FAN AND LIVE IN FLORIDA NOW
From STEWART FISH on September 5th, 2008
NO WAY WILL I HELP THEM PAY FOR THE NEW STADIUM. I'LL STAY RIGHT AT HOME WITH MY BIG SCREEN TV AND HAVE THE REFRIGERATOR STOCKED WITH BEER WHICH I WILL BE ABLE TO DRINK IN THE FOURTH QUARTER AND I WILL HAVE THE JOHN RIGHT NEARBY. MUCH MORE COMFORTABLE, BETTER VIEW OF THE GAME, NO TRAFFIC, NO STANDING AROUND IN THE PARKING LOT FREEZING AT TIMES. WHO NEEDS THEM.