MN gov to Vikings: Lower PSL prices, soak fans some other way instead

Okay, I’ve seen a lot of pandering to voters/sports fans by politicians, but I think Minnesota Gov. Mark Dayton may have taken not only the cake, but the entire bakery:

Minnesota Vikings owners Zygi and Mark Wilf should have to pay a large portion of the team’s share of a new football stadium from their own pockets instead of using money made from fees charged to season ticket holders, Gov. Mark Dayton wrote Monday in a letter to the government authority supervising its construction.

Sounds great, right? Sure, it’s a little late, considering that Dayton was the main guy pushing for the Vikings stadium deal in the first place, but better late than never. So how does Dayton propose that the Wilfs dip into their own pockets instead of soaking fans?

As part of the stadium funding plan that lawmakers passed in 2012, the Vikings are allowed to sell personal seat licenses, which give the holder the right to buy tickets for specified seats in a stadium for any event, including NFL games. Personal seat licenses are common throughout the NFL and have been used as a way for teams to pay for new stadiums.

But in a letter to authority chairwoman Michele Kelm-Helgen, Dayton expressed concern over a recent Minnesota Public Radio News report that concluded the Wilfs would likely be able to cover most of the $477 million without spending their own money. Instead, they could use the seat licenses, naming rights to the stadium and a roughly $200 million NFL contribution.

Dayton’s line in the sand, it turns out, isn’t actually over whether the Vikings owners would use PSL money or their own money — once the Wilfs sell PSLs, that is their money — but how much the team could charge for PSLs, something the governor has freaked out about before. The issue now appears to be how much the Wilfs would be allowed to charge for PSLs, since the stadium legislation gives the state stadium authority (which would actually be selling the PSLs, though the team gets all the proceeds) the right to set PSL prices. So Dayton wants lower PSL prices, meaning less money for the Wilfs, meaning more money they’d have to take from other revenue streams.

The trouble here is that PSLs are really just a way for teams to raise capital from their fans instead of a bank — think of them as like Kickstarter for billionaire sports owners. And like Kickstarter, fans expect not to be hit up for high prices again to buy the actual product when it’s available. Or to put it more simply: There’s nothing to stop the Wilfs from just borrowing the money the old-fashioned way, then raising ticket prices to extract the same money from those suddenly cheap-PSL-priced Vikings fans — if fans are willing to pay that much for PSLs plus tickets, the market equation doesn’t change much if the PSL price goes down and the ticket price goes up.

What this does do, though, is make Dayton look like a hero for standing up for Vikings fans who are understandably not happy about having to pay a huge fee before they can even get the right to buy tickets. But if anyone thinks this will significantly change how much the WIlfs have to sacrifice from their profits to pay for their stadium, you have another think coming.

14 comments on “MN gov to Vikings: Lower PSL prices, soak fans some other way instead

  1. I guess it would have been too much to expect Gov Dayton to actually read the bill before he signed it!

  2. Aren’t these the same Viqueens fans that thought they were going to get a new stadium on someone else’s dime?
    Gov. Mark Ignatowski is descended from a couple of generations of wildly successful business men and yet doesn’t seem to understand that the Minnesota Vikings are a for-profit business and that business do, whenever possible, pass increased costs on to the customer. Iggy can posture all he wants. One way or another the Wilfs will figure out a way to get someone else to pay “their” share.

  3. Yeah, we need a word for “beyond pandering”. Of course customers are going to pay the majority of the team’s cost for the stadium – just like customers indirectly pay for the infrastructure of any other business they visit.

    And Vikings ticket-holders aren’t getting “soaked”, they’re not even paying the true cost of what they’re going to get – thanks to the costs that will be paid by taxpayers. Minnesotans who aren’t Vikings fans – those are the people truly getting “soaked”.

  4. How about Pandermanium?

    I disagree Neil…. this doesn’t make Dayton look like a hero. It makes him look like the self same feckless twit he has been all through this. Minnesota voters, like other voters in our alleged dumbocracies, need to understand that the man “they” elect does not serve their interests. He serves the interests of the wealthy and pretty much only the wealthy.

    I hope you’ll keep us updated on school and hospital closures, police and fire crew layoffs and the distress sale of any publicly owned buildings that become necessary as a result of the funding gap Dayton’s own “plan” has. But hey, the Bengals beat the Steelers and you can’t put a price on that, right Cincinnati fans? I mean, you can figure out exactly what it cost you to build and operate that stadium for the team – down to an exact number of paying jobs for working people that were lost to line the pockets of the Bengals owner, but what price victory, huh?

  5. Neil, how much do you think the Vikings could bring in with PSL’s? I think my math must be wrong: I am figuring 60,000 seats with an average price of $5,000 a seat. That brings in $300 million. (I realize some seats won’t have PSL’s and some will be around $40K or so) Also, the PSL’s are tax free.

    If my math is correct (and remember, math is hard!) then it is amazing that the legislature didn’t ask for a cut of either the PSL’s or the naming rights. I believe Santa Clara did and they are coming out even..or so.

  6. The 49ers are getting $400 million, so my guess is the Vikings could do $200m-300m, sure.

    But no, Santa Clara didn’t ask for a cut of PSLs – all those are going to pay off the stadium (though it’s funneled through the city, likely for the same reason it’ll be funneled through the state in Minnesota). I agree that Minnesota absolutely should have asked for a cut, at least to defray some of its costs instead of just the Wilfs … but if you recall, “sane business practice” wasn’t exactly the name of the game when this thing was being voted on.

  7. Not surprising, put together politicians who will try to get away with as much as they can without being blamed for the negative outcome with big league sports franchise owners who will try to get away with as much as they can without being blamed for the negative outcome and what do you get?
    Voters/customers with depleted pockets and enriched politicians and franchise owners. Folks, the slavish mind-numbed worshiping of big league sports will only deplete your resources and the other parties in this situation couldn’t care less.

  8. PSL fees should be as high as the market will bare. Make Vikings fans pay for more of the stadium.

  9. I’m almost positive that none of the other teams in town have used PSL’s to fund stadiums (Twins, Wild). I think there’s going to be some serious sticker shock among Vikings season ticket holders when they find out what those costs will be. This isn’t Silicon Valley – a lot of Vikings ticket holders budget most of their recreational dollars on their tickets and don’t have the extra thousands for a PSL.

    I suspect there will be a lot of people dropping their tickets a la what happened with the Jets. This will be about as good a funding mechanism for the Wilfs as E-pulltabs has been for the state.

  10. Mark Dayton is “the Governor who cried “Wilf”. No one believes that he even believes what he says, or that he will turn his “concern” into any attempt to stop this disgusting circus. Minneapolis may soon join Detroit in bankruptcy with the irresponsible and downright illegal behavior of elected and appointed officials.
    Our only hope is mayoral candidate Doug Mann’s Writ of Mandamus in regard to the stadium. We are waiting for the judge’s decision. I hope the judge decides to make history!

  11. If Governor Dayton is serious then all he’s doing is putting the Vikings at a disadvantage. NFL teams get to keep PSL money, but have to share ticket money with other teams (outside of the $200M G-4 kickback from Club seats). Also, PSLs are different to fans psychologically because they can be re-sold. I met a guy who paid $24,000 for 3 Cowboys Stadium PSLs and then was paying $99/ticket. He just didn’t see it as paying $200+/ticket (or whatever the match works out to).

    I still think Gov. Dayton did a great job from a tough negotiation position. The Vikings absolutely could’ve ended up in L.A. And he knows he would’ve gotten hammered for that. He lacked leverage but still got a halfway decent deal.

  12. That’s an excellent point about revenue sharing, Ben — the real beneficiaries of this move would be not Vikings fans, but the other 31 NFL teams.

  13. …the Vikings absolutely could have ended up in LA…”

    Ok. Where? The Rose Bowl or the Coliseum for the next decade while a stadium plan that “works” is created? Or would the Wilfs willingly transfer 35% ownership of the Vikings to AEG to help spur their stadium plan?

    Dayton’s job isn’t to see that the Vikings (or any other private for profit business) are well supplied with public money. It’s to administer the operation of the state in the best and most cost effective way possible. And he’s 0-2 on that count…

  14. We let Mark’s leash out a bit so he could bang his drum about this one. He needs to keep up appearances with the plebes, er, “constituents”, hehe.

    Like all stadium “stumbling blocks” that have come along over the last few years, this one will magically resolve itself in our favor. Presto!