Tuesday, October 14, 2008
Mixed signals on the sports economy
Season ticket renewals for the LA Lakers ran at 99%, "despite price hikes that raised the cost of Jack Nicholson's seats at Staples Center to $2,500 a basketball game." In contrast, the NBA itself has let 9% of its staff go, and the Nets are resorting to a "buy now, pay later" promotion to combat a decline in their renewal rate to below 80%. Purchasers can watch the games this fall but aren't obligated to pay until Jan. 5. The scheme bears an eerie resemblance to a sub-prime mortgage....
NHL ticket sales are up, but newspaper coverage is in serious decline. (HT: Ken Houghton) Although the latter may say more about newspapers than the nexus of sports and the economy, having a reporter on the team's beat would seem quite valuable for a team. Were it not for conflict of interest issues, perhaps even worth subsidizing! ;)
One interesting experiment will begin on Sunday, when the NY Jets launch an auction of 2,028 premium seat licenses at StubHub.com. It's an awkward time to turn what has traditionally been a renewable subscription into a capital asset, with callable loans being called in, credit drying up for all manner of businesses, etc. The Jets claim they won't hold any tickets back, and are going into this "with eyes wide open." Could they be desperate for cash as well?
NHL ticket sales are up, but newspaper coverage is in serious decline. (HT: Ken Houghton) Although the latter may say more about newspapers than the nexus of sports and the economy, having a reporter on the team's beat would seem quite valuable for a team. Were it not for conflict of interest issues, perhaps even worth subsidizing! ;)
One interesting experiment will begin on Sunday, when the NY Jets launch an auction of 2,028 premium seat licenses at StubHub.com. It's an awkward time to turn what has traditionally been a renewable subscription into a capital asset, with callable loans being called in, credit drying up for all manner of businesses, etc. The Jets claim they won't hold any tickets back, and are going into this "with eyes wide open." Could they be desperate for cash as well?
Labels: demand for sports, PSL, season ticket sales
Saturday, March 22, 2008
PSLs in NYC
They played in Charlotte, and now it's time to see if they'll play in the Big Apple. Personal Seat Licenses (PSLs) will be used to finance the construction of the new football stadium being built by the Giants and Jets in New Jersey, according to an article in the New York Times.
In economic terms, a PSL is a two-part tariff, where fans pay an up-front lump sum fee for the right to purchase tickets at face value. The PSL allows the team to capture some of the consumer surplus it generates. PSLs were first used to finance stadium construction in the early 1990s by the Charlotte Panthers. Since most PSLs are put in place when a new facility is built, and no new sports facility has been built in NYC in decades, this is the first opportunity for a New York team to implement them.
The key issue is how much the Jets and Giants will charge for a PSL. Historically, teams priced PSLs under $10,000. But Jerry Jones upped the ante last year when the Cowboys priced their PSLs between $16,000 and $150,000 in their new facility that is scheduled to open in 2009. Will the Jets and Giants feel the need to keep up with the Joneses?
In economic terms, a PSL is a two-part tariff, where fans pay an up-front lump sum fee for the right to purchase tickets at face value. The PSL allows the team to capture some of the consumer surplus it generates. PSLs were first used to finance stadium construction in the early 1990s by the Charlotte Panthers. Since most PSLs are put in place when a new facility is built, and no new sports facility has been built in NYC in decades, this is the first opportunity for a New York team to implement them.
The key issue is how much the Jets and Giants will charge for a PSL. Historically, teams priced PSLs under $10,000. But Jerry Jones upped the ante last year when the Cowboys priced their PSLs between $16,000 and $150,000 in their new facility that is scheduled to open in 2009. Will the Jets and Giants feel the need to keep up with the Joneses?
Labels: NFL, PSL, ticket pricing
