Journalism may be dead and all, but the Atlanta Journal-Constitution is still giving it the old college try, today by publishing the results of their latest public records request into how many Atlanta Falcons season ticket holders are defaulting on their personal seat licenses, eating the payments they made already to avoid having to make any more. And the answer is a whole heck of a lot:
About 7,000 Falcons season-ticket account holders have defaulted on their seat licenses since 2016, records show, with the vast majority of those accounts representing two or more seats. About 650 of the account holders who defaulted later returned as PSL owners.
Records show that seat-license purchases made before the 71,000-seat stadium opened in August 2017 totaled $299.1 million, including interest added to accounts annually. Of that, $196.5 million had been paid as of June 30, and after the $42.9 million in defaults, $59.7 million remains outstanding (plus future interest).
The total “default write-off balance” of $42,933,454 as of June 30 was up from $32,001,679 as of one year earlier.
That’s a lot of numbers, so let’s break them down a bit. When the Falcons built their new stadium — with the help of more than half a billion dollars in taxpayer money — they forced fans to plunk down anywhere between $500 and $45,000 for the right to buy tickets to sit beneath the glory of Megatron’s Butthole. The magic of PSLs, though, was that if fans decided they didn’t want the tickets, they could sell their ticket rights to someone else.
At least 7,000 Falcons fans, representing perhaps double that in total seats, have instead decided over the past four years to just walk away from their seat rights, which the AJC notes “apparently reflect[s] the difficulty in finding buyers.” It probably doesn’t help that the Falcons have been aggressively mediocre the last couple of years, but they made the Super Bowl as recently as 2017, and anyway, no team is very good or very bad for long in today’s NFL. (Okay, no non-Cleveland Browns team.) And while the pandemic undoubtedly isn’t helping, the $10 million in defaults from July 2019 to June 2020 are right on pace with the previous three years.
The bigger issue appears to be something we’ve already seen in other NFL cities, which is that PSLs are kind of a scam. Despite the promise that they’re an investment, not an added cost on top of your actual ticket fees, way too often their resale value plummets soon after purchase, to the point where even finding a buyer may seem like less trouble than just stopping annual payments and eating what you’ve spent so far. Some fans appear to be catching on — the Los Angeles Chargers had to massively downgrade their expected PSL sales after it turned out no one really wanted to buy them (or just that there are no Los Angeles Chargers fans), and even the Falcons had more trouble selling them than they’d hoped. But even if they don’t always raise as much as team owners hope, PSLs are still worth it, since they’re essentially free money: Making a waitlist of fans for season tickets never used to generate any revenue until Max Muhleman accidentally invented them.
None of this is illegal, obviously, and in a “let the buyer beware” sense, it’s not even unethical, since you’re only scamming people who fail to understand that sale price doesn’t necessarily reflect actual market value. (And PSL money has enabled team owners to put up more capital toward stadium expenses, though as we saw with the Falcons, it hasn’t stopped them from demanding plenty of public cash as well.) Still, you have to wonder how long NFL owners will be able to keep on charging fans twice for the same product, especially as people get more used to sitting at home and watching TV, something that started before Covid but is only likely to accelerate now. Time for team owners to start demanding new stadiums with smaller capacity, you think? As with the PSL racket, you can’t get if you don’t ask.
Yeah, I guess the flaw in the “you can sell your PSL to other fans,” plan is if the team no longer interests you, it probably no longer interests anyone else either.
I’m just happy to see the return of Megatron’s Butthole to this blog.
Joe Robbie funded construction of his stadium similarly around 1986. I remember him giving trinkets and tchotchkes to buyers. He wanted to thank fans for their faith in him and love of the team.
“The executive suites were Robbie’s chief source of early revenue to stimulate loans from banking establishments. His plan was to raise $9 million in security deposits by leasing 216 executive suites for $29,000 to $65,000, depending on their size and location, and 10,000 club seats for $600 to $1,400.”
https://www.latimes.com/archives/la-xpm-1987-08-16-sp-1898-story.html
Well said. This is exactly what the basic idea behind PSLs should always be (and was supposed to have been).
If you’ve got 8-10,000 very wealthy fans (representing roughly 20k seats) who want a shiny new stadium to sit in, I see absolutely nothing wrong with offering them the chance to put their money where their mouth is… $15-20k per seat for the club seats would generate $350m towards funding a new stadium.
The well funded customer may not care whether their PSL could be resold (or have any intention of ever selling it), but if it is for a limited supply club or box seat, it almost certainly can be.
The problem with the PSLs from where I stand is that they’ve expanded them to everyone when there is essentially no market for them.
Who is going to buy a PSL on the resale market for the corner seat in the last row of the third deck?
What you would pay for the “right” to buy this seat would cover your NFL sunday ticket costs for several years.
I’d say my issue isn’t even with your last scenario, if the demand is there like it apparently was with Carolina.
My issue is when the team does it, some fans pay for the PSL thinking everyone has to get them, and then the team unilaterally decides “oh yeah, nah” like in Oakland. That should be actionable.
Perhaps so. Certainly there is nothing stopping fans who did pay for PSLs in certain sections from filing suit to get a refund (pretty clearly, when the team eliminates the requirement to have a PSL because their is no demand for same, the resale value of the fan’s existing PSL is zero). Whether a court could find in their favour or not I don’t know. But the option is there.
Like everything else (car sales, credit card agreements, all kinds of insurance…) we as consumers need to know, or at least be able to positively determine ourselves, what it is we are buying.
Most of us have insurance policies that are indecipherable to anyone without a law degree (and often to those with). We know what we are paying in premiums, but we have no idea what it is we would actually get in the event of loss (particularly partial loss).
Caveat Emptor
“All sales final. There is no guarantee of repurchase of this product by issuer. Purchase is subject to investment risk, including possible total loss of the principal amount invested.”
Question: Where should you heed this disclaimer?
A Vacation timeshare contract
B Mutual fund prospectus
C Personal seat license fine print
D Biden/Harris 2020 election futures wager
E all of the above :>)
Answer E