After months of negotiations over seat license fees at a new Minnesota Vikings stadium — something that Gov. Mark Dayton had warned would be a betrayal of the public trust — the state and the team yesterday announced a deal on how much Vikings fans will have to pony up for the right to buy tickets:
The team and authority agreed to attach a one-time fee to 75 percent of the seats in the 65,000-seat stadium, charging season-ticket holders anywhere from $500 to $10,000, depending on the seat. The remainder of the seats, including some held by season-ticket holders, would not carry such fees.
Is that a lot? It depends on your point of comparison. The total cost to fans will be about $100 million (though the Vikings’ site has it as $125 million for some reason), which as the Vikings’ site also points out is a bunch less than other teams like the San Francisco 49ers, Dallas Cowboys, New York Giants, and New York Jets have charged, though also a bunch more than other teams in smaller markets have charged. And it’s less than the $200 million that the Vikings were originally set to collect.
Still, it’s definitely a lot more than Dayton’s professed statement that “$1 for a personal seat license is $1 too much.” And the governor, who has made PSLs the one point of the $1.1 billion stadium subsidy deal that he’s making a stink over, didn’t exactly sound thrilled yesterday:
“For most Minnesotans, this will look like a questionable deal because the economics of professional sports are questionable all over this country,” Dayton said, addressing the issue before the board meeting. “But we had to make a deal and we had to get the owners of the team to agree to a deal.”
And what about fans? Are they happy that in order to buy most seats they’ll be paying, if not through the nose, then just through one nostril?
“Season ticket holder for 30 years, no way in hell I’m paying upwards of 2500 dollars on 4 seats. Take your SBL’s and shove them.” Matt Mattern wrote on Vikings.com. “I’m done.”
Some of the venom was directed at Minnesota Gov. Mark Dayton.
“The ‘Peoples Stadium’ my aunt Matilda. Only those with a South Dakota trust fund could participate,” Jay Schuster commented on TwinCities.com.
“Why was the license fee part of the stadium deal? Didn’t our goof ball governor read that clause either?”
(Incidentally, you gotta love that what passes for “venom” in Minnesota is “goof ball” and “my aunt Matilda.”)
In the end, the state did manage to negotiate Vikings owner Zygi Wilf’s demands down a bit: He’ll have to finance $100 million less of his stadium via fans, and will instead have to dip into his own profits for that money. Though given that he’ll probably compensate for lower PSLs by raising per-game ticket prices on those seats, at least some of it will likely come out of fans’ hides anyway. And even if this does end up cutting into team profits some, since Wilf is already getting more in public subsidies than the stadium will cost to build, he can certainly afford it.
Now it’ll be interesting to see how the PSLs sell. The Jets and Giants already had trouble getting fans to shell out for all the seat licenses at their new stadium (I actually just found out that my neighbor gave up his Giants season tickets after 50 years because he refused to pay PSL fees), and you have to expect that fans are going to rush to grab up the fee-free seats before plunking down thousands to earn the right to tickets in the next section over. Not that any of this is Minnesota’s problem — thankfully, even though the state will be handling the sales for tax reasons, if the money comes up short it’s for the Vikings to make up the difference — but it will help determine whether Vikings fans greet the new stadium with a bad taste in their mouths, in addition to the light feeling in their wallets.
It’s funny, and a bit sad, that the people who will benefit from the new stadium are outraged that they’re being asked to pay a fraction of the cost of building the place. Yet I’m sure they feel it’s perfectly okay that their neighbor, who has never paid attention to a single Vikings game, should help pay for it.
We live a in very weird world.
Neil, none of my friends are interested in renewing their Vikings season tickets if they have to pay a PSL. These same friends were OK with taxpayers paying for the stadium since taxpayers pay for the arts and stuff.
What do you know about the Vikings PSL.s? they say you buy them and are guaranteed the right to buy tickets to that seat. I currently have Twins season tickets (without a PSL) and have the opportunity to buy the same seats season after season. So….I am confused. Also, does the PSL entitle the owner the opportunity for that seat for every event in the building? I guess if it did, then that would be a pretty sweet benefit. If not, then I don’t see the difference between having a season ticket and having a PSL with season tickets. well…except for the money that the owner gets!!
Mteegarden-
There really isn’t a difference. PSLs are really popular in football because seasons are easier to get and demand outstrips capacity. They create another issue in that usually you have to buy seasons every year or else you lose the license. The only advantage as a fan is that you can turn around and sell the rights.
I don’t know about rights to every event, but really, with football stadiums, that would consist of monster truck shows, Taylor Swift concerts, the odd international friendly, and a college game or two. I really don’t think they’d guarantee a right to a seat for a Final Four/Super Bowl level event.
In my mind it’s perfectly fair if the team wants to build a new stadium privately, I think Carolina funded theirs that way and the 49ers have done the same. Really hard to shift into it though, as the Jets and Giants found out.
Ty – the 49ers stadium isn’t all privately funded. They are getting redevelopment property tax dollars ($40 million, not including interest). In fact, the 49ers are suing to obtain $30 million plus interest of those dollars right now, which is preventing public agencies from receiving their share of those redevelopment property tax dollars until the lawsuit/restraining order on the money is settled.
The people of Santa Clara paid to move an electric substation out of the way for more stadium parking (>$20 million), and paid for a big parking garage ($40 million) across the street from the stadium. In 2010 we paid >$600,000 in city salaries for city staff to work on stadium issues, and the City hasn’t disclosed what was paid in city salaries since 2010 for employees to work on stadium issues. This is important because it has been a hidden cost of the stadium, when we were told repeatedly during the stadium campaign that there would be no cost to our general fund (city salaries are paid by the general fund.)
Our hotels are paying through higher hotel occupancy taxes which go to the stadium. That’s public money too because it’s tax money which could go toward public needs.
Recently, the city stated that it needs to move the youth soccer park, also across the street from the stadium site. They are short 5000 parking spaces, and seek to use that property for stadium parking. The taxpayers here paid between 5 and 10 million dollars for the construction of that youth soccer park. People here have been outraged because one of the city’s primary choices for soccer park relocation is to take away our only open space preserve within our city. Other locations would take away neighborhood parks.
The costs of the stadium to the public just keep on increasing. The latest was the feasibility study for moving the youth soccer park, paid for with taxpayer dollars.
Mteegarden: Think of it this way: When you want the right to those Twins tickets, you just call up and the Twins assign you a spot. It’s free to get the spot on the list, it’s free to move up to better seats if some open up (though you have to pay more for the tickets, of course), and if you decide you don’t want the seats anymore, you just cancel and don’t get anything back for giving up your spot.
With PSLs, you have to *buy* your spot on the season ticket list. The upside is that when you give up your spot, you can sell it to someone else, so it’s at least in part an investment, not just throwing money away.
It also means, of course, that you’re paying your way to the head of the line — instead of tickets going to whoever calls first with season-ticket money in hand, anyone who doesn’t have $500-$10,000 that they’re willing to keep tied up in ticket rights indefinitely doesn’t get to play. So you presumably have a better shot at good seats if you have lots of cash on hand, and you’re screwed if you don’t.
Does that help?
Neil, your last statement of being screwed helped!!
So, I guess the Twins could call me up and say that the seats that I currently have are no longer available and that if I want tickets I will have to find a different spot. However, if I had a PSL to those seats, then they couldn’t do that.
As for an investment, I have read that the Steelers PSL’s provided quite the return on investment. If the Vikings are capping their PSL’s (or being forced to cap them by Governor “I didn’t read the legislation that I signed and now I am really mad” Dayton at 10k, then perhaps it might be a good investment since that price seems pretty low. though, like any investment, you need to buy at the right price and then find someone to sell it to. That might be the hard part. So…onto my next question: Do teams help PSL owners sell the PSL?
I’m with Keith on this one…
The notion that fans/attendees having to pony up for the new stadium they are going to enjoy as a “betrayal of public trust” suggests very strongly to me that the halfwit Governor has no idea what the public trust actually is (*or that he believes it’s a public account that the wealthy use like a trust fund… which in some ways, it seems it is these days).
Neil: We often discuss PSL’s on this site and suggest they give some sort of “value” beyond the right to buy tickets as they can be resold. Are you aware of anyone who has resold their seat license? If so, how did they do that and what did they get for it (compared to the upfront cost)?
While I believe the concept of seat licenses as a capital generating exercise for new stadium is sound enough (it is the attendees that benefit from a new stadium, not the taxpayer generally), I wonder what the actual free market value of a theoretical construct like a PSL is on the secondary market. I suppose if you are a NY Giants (err, ok…), Yankee or Knicks fan, the secondary market should be pretty strong going forward. I’m less clear on how being a PSL holder for the Jags or Mariners, for example, would work for you ten years down the road.
Lastly, if owners can impose PSL’s at their discretion, can you think of a reason why an owner who buys a team and it’s existing arena couldn’t do the same? You know, “yeah, we get that the Trop is a dump, but we’re going to charge you $2500 for the rights to buy tickets there anyway”… Though that said, this seems much more like something Loria would impose on the 8200 fans who occasionally show up at his $600m taxpayer funded playpen than his cross state counterpart would.
Mteegarden: Yes, I suppose the Twins could do that, but the publicity would be so awful that they almost certainly never would. Realistically, PSLs are just a way to sell you the rights to something you otherwise had for free – as someone else noted on one of these threads recently, there’s nothing stopping them from doing a Hot Dog Buyers’ Club that gets you the right to purchase hot dogs, either.
John B: From this article, it looks like PSLs do well if you buy low, not so much if you buy high, which duh:
http://www.forbes.com/sites/danalexander/2012/09/05/nfl-psls-have-become-very-risky-investments/
Finally, a team could try to impose PSLs at an existing stadium, but the PR backlash would be so huge that I imagine they’d lose money on the deal. Also, even more people would balk at paying a fee just to keep the same tickets as always, whereas if you have a new stadium and call it a “Stadium Builders’ License” you can get people to believe that they’re getting something new in the bargain.
John: I was in Pittsburgh for a ballgame recently, and the gentleman next to me said he sold his Steelers PSL for about 2k when it was 900. Supposedly some people in Baltimore made an absolute killing on them by buying in 1996 and selling after the Super Bowl.
It’s not an “investment”, really, commodity is probably a safer term.
mteegarden: You’d sell it yourself, although I think most teams have a right of refusal.
Oh, and here’s a sample marketplace *gulp*:
http://www.seatdibs.com/toronto-maple-leafs-PSL-Seat-License-28001.html
Pretty distorted market, from the looks of a few sites. Cheapest Bears PSL is the cheap club seats, because you have to pay extra for the tickets; same with the Leafs, because you have to buy Raptors seats as well.
Neil-
Sorry, basic question, but I am confused–the money raised by the PSLs goes to where? Does it go to the team, who then use it to fund their portion of the stadium? Or does it go to the city/state, so it helps pay for the publicly funded portion of the stadium? Sorry, this is basic, but I would appreciate clarification!
To the team, which uses it to fund its portion. Even though the state is technically the one handling the sales. Yes, it’s confusing.
re: PSL’s as investments: Maybe, but assuming it only applies to the current stadium, you have to consider that it has a limited lifespan.
“These same friends were OK with taxpayers paying for the stadium since taxpayers pay for the arts and stuff.”
Most would consider this comparing apples and oranges because the team makes tons of cash and would still exist without the help (they can all afford to build their own stadiums), “arts and stuff” might not. But it’s a valid, self-interested way to look at stadium subsidies. Refreshingly honest in these discussions, instead of trying to convince yourself that it’s okay because it’s for the betterment of the community.
Vikings fans that want the public to pay for their stadium are a bunch of welfare queens. Pay for your own entertainment (PSLs) or don’t go to the games.
Thanks Ty.
Yeah, there are always going to be a handful of markets where the price bears no relationship to the amount of entertainment on offer… and where there seems no maximum that the punters can be fleeced out of (just a matter of time before you have to buy tickets to everything MLSe puts on plus a new condo every year from their property arm to qualify for Leafs tickets…)
If this was in Wisconsin AKA Lambeau people would be lining up to buy these. heck they buy fake stock that gives them no chance at a return. Just a piece of paper. to show there horns so to say. Viking fans it starts with you to get this organization Rocking again. We invest they invest FA want to come here. Let’s build some momentum! The Vikings have made this affordable by spreading the PSL cost over a few years. I am in. I don’t want to sit in an empty stadium.
It seems to me, based off of what the article says, that psls are going to be looked at differently in every city. The article gives a small example of the difference between what might happen in New York Versus in Minnesota. I think that there are enough fans that the demand will be met either way. Maybe it will take some tweaking team to team to make it all work. I don’t think that there is much that could damage the attendance by a lot. http://seatlicense.com/psl/