My Vice Sports colleague Aaron Gordon has a fascinating interview up today with sports marketer Max Muhleman, best known as the inventor of personal seat licenses. And he gets Muhleman to reveal something that I hadn’t heard before: The original idea for PSLs was not to charge for them at all, but rather use them as a reward for fan loyalty.
As the story goes, Muhleman’s first PSLs were developed for the then-expansion Charlotte Hornets, when owner George Shinn suggesting buying leather jackets for fans who’d put down non-refundable season ticket deposits without knowing if there would even be a team. Muhleman, who’d run the ticket drive, countered by suggesting that fans be allowed to pass their seats on to someone else if they gave them up, rather than having them go to the next person on the waitlist as was usual practice. He called this “charter seat rights.”
Then, history happened:
Muhleman never meant for the PSL to become an investment. It was simply about thanking the fans who pledged their own money to help support a new team or stadium. The idea of re-selling Charter Seat Rights didn’t even occur to Muhleman until he saw a classified ad in the paper after the Hornets’ incredibly successful inaugural season, when they sold out every game in the 23,000 seat arena. The ad read: “‘Leaving town. Two charter seat rights. $5000.” When Muhleman called the number, the person on the other end said they had already received about a dozen calls and they regretted not asking for $10,000.
Four years later, when Jerry Richardson was trying to raise money for a Carolina Panthers stadium, he turned to Muhleman, who remembered that classified ad. Eventually, the rebranded PSLs raised $92 million for Richardson at zero cost to him, and a revolution was born.
The Vice headline claims that Muhleman now “hates PSLs as much as you do,” and while I love a grabby headline as much as the next guy, it’s not quite accurate: He actually tells Gordon that he feels like PSLs have gotten so pricey that they’re just a money grab, losing the necessary balance of also building fan loyalty by offering them something in exchange for their fandom:
“I thought we were on to something that worked, that it made good music with the sport, the fan, the owners, we could all come together in a harmonious, mutually productive, helpful way,” he said. “But these programs I see, so many of them I can only say are unilateral, and unilateral in favor of ‘how much can we get out of these people?’ And I do not believe the path to success in sports is maximum leverage of fans.”
Of course, it depends on your meaning of “success.” When it’s a choice between hundreds of millions of dollars in cash now and potential good will down the road, that hasn’t been a decision that most NFL owners have had to think too hard about.