Falcons PSL sales slow before reaching halfway mark, haven’t we seen this movie before?

Personal seat licenses are a weird thing. When it goes well, forcing fans to buy the right to buy season tickets — a right that they can then sell to other fans down the road, demand willing — can raise hundreds of millions of dollars for teams building new stadiums. When it goes not so well, fans realize they don’t have to spend on PSLs in order to get tickets, the bottom drops out of the PSL market, and the Oakland Raiders happen.

The Atlanta Falcons are currently walking that knife’s edge with their PSL sales, which with 16 months to go before the new stadium opens, are slowing just shy of the halfway mark:

The latest sales figures — obtained from the GWCCA, a state agency, through an open-records request — show 4,437 club seats have been sold (up from 4,259 through Nov. 30) for $98 million and 24,774 non-club seats have been sold (up from 22,358 through Nov. 30) for $70.8 million.

The Falcons have said PSLs will be required for all seats sold as season tickets in the 71,000-seat stadium, with the exception of about 5,000 seats in suites. Team officials have declined to say how many seats are available as season tickets, noting some seats are withheld for groups, sponsors and other business purposes.

This isn’t necessarily a disaster — 16 months is a long time, and the Falcons can always tweak their pricing like the New York Jets did if they have to. And since they’re only counting on the PSLs bringing in a couple hundred million dollars, and it’s on Falcons owner Arthur Blank to make up any shortfall, it’s not a big deal from a public-cost perspective.

Still, if it turns out that Falcons fans didn’t have to buy PSLs in order to get seats, and the value of the licenses collapses as a result, this could lead to other cities’ fans getting cold feet about giving their cash over for an asset that they can’t resell at anything close to what they paid for it, which could ultimately end up wounding the PSL goose, if not outright killing it. And that would have a significant effect on how future NFL stadiums get funded, and which ones get built at all. Worth keeping an eye on, anyway.

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18 comments on “Falcons PSL sales slow before reaching halfway mark, haven’t we seen this movie before?

  1. The first link doesnt work, what was it supposed to lead to?
    Also, im not surprised. Astoundingly overpriced thing for a bad team? Of course no one will spend on it.

  2. Saying that the PSL “golden goose” could be killed would is like saying that that sitcoms could be killed because there happen to be no hot sitcoms today. The Falcons aren’t a hot team, so PSLs are a tough sell. If the Panthers announced tomorrow that they were building a dome so that they could lure the SEC Championship game (along with its tens of millions of dollars per year of economic activity that only a fool or an Econ Prof would deny) to Charlotte, they’d sell out of PSLs so fast your head would spin.

    1. I don’t know — the 49ers PSLs have had lousy resale value, and the Vikings PSLs brought in a pretty modest amount. Clearly there’s still a price point at which PSLs will sell well (and resell well), but if it’s significantly below what teams are charging now, that changes the economics of stadium funding.

      More concisely: If people realize that PSLs are largely overpriced, they may not be as willing to buy them.

      1. Neil,

        I’ll agree that teams are better able to get fans to make rash decisions when PSLs are sold before the stadium is up. Honestly, though, I think the 49ers situation validates my theory. They are cold now, so it’s a tough sell. Vikings aren’t super hot, either.

      2. We’ll see next time there’s a hot team opening a new stadium, I guess. Though given that it’s the NFL, that changes every couple of years anyway, so it’s silly to base major purchases on it.

        1. Ben,

          For a return “tens of millions” of dollars of economic activity the stadium would have to be used for about 50 years to even be considered a reasonable investment. Since 15 seems closer to the mark for the NFL, that is unlikely to be achieved.

          I know it is crazy, but some places might use the argument of “let’s make tens of millions every year by having infrastructure and educational systems to make living and working in Atlanta a great and attractive place,” since those means don’t always ask to be exempted from all sales taxes.

          1. Sports stadiums are “infrastructure”. And while I am a firm believer in education, as a public service it’s a huge waste of money.

          2. I’d say that the sports worldview is very easy to impose on others.

            Companies looking to start up are looking for high quality of life, good schools for the kids, universities and local talent for collaboration. For companies that actually employ people, sports is pretty far down the list, no matter how much boosters make it seem otherwise.

            As for big ticket events, politicians love them because they look important and get free tickets. The truth for small businesses (especially restaurants) and municipalities is that succeeding generally comes from regular and repeat business on the days besides the SEC Championship. That requires boring things like management and attention to detail.

          3. “Sports stadiums are “infrastructure”.”

            And so is the structure I built to house my restaurant!

            You funny, Ben.

            “…as a public service it’s a huge waste of money.”

            Then again, you can take any bit of satire beyond believability.

  3. The rules apply in the real world. As Neil and others on this site (as well as those sites, articles and pieces of fine literature dedicated to economics and commerce) have pointed out….how money works in sports is not the real world.

    Very few businesses….unless they are run by the clinically insane…would want to tear down or severely overhaul their home base every 10-15 years due to something new that was added. Be those skyboxes or tyranno-vision boards (‘Simpsons’ reference there). But there are some (think in terms of the Bengals) who think this way. And they are in good company.

  4. The Bay Area and NYC are both much bigger by any measure than Atlanta or the Twin Cities.

    Let’s see how LA turns out. If LA PSL sales flounder, then yes the goose may have died. If they do fine it may just be that the big markets can support big revenue PSL sales and small markets can’t.

    For what it’s worth, this was already somewhat built in. Atlanta/Minnesota had massive public subsidies while NY/LA/Santa Clara had much fewer, bordering on by not quite hitting being fully privately funded.

    1. I think the rise of digital ticket reselling forums (i.e. Stubhub), along with the insane cost of some of these stadiums, has really knocked down the idea of a PSL except for the most expensive/exclusive NFL seats.

      Anyone can look at any NFL team and see that tickets are almost always available in every price category without any requirement to buy an expensive “heirloom” permission to buy tickets–which will probably be voided in 20 years by the team anyway. A few teams doing well will be more expensive than list price, and by the end of the season, many will have lots of seats below face value as season ticket holders dump tickets.

      Washington strikes me as an NFL city that has seen this in a big way–we’ve gone from pretend exclusiveness in FedEx Field to basically open laughter at the idea that the Redskins sell out games.

      1. That works both ways, though: StubHub reduces demand for season tickets because fans know they can always get tickets last minute, but it also increases demand because they figure they can always dump tickets they don’t want via StubHub.

        1. There may be a few teams in a few cities like that. My sense is for most teams–the individual season ticket holder has to choose between making his money back and giving up the desirable games, or going to the desirable games and eating tickets for the Tuesday night game against the Phoenix Coyotes.

          For an individual ticket holder, about the only real benefit is “priority” for playoff games. Which given current prices, is a mixed blessing.

  5. So PSL sales are only a sure thing (that maybe require the occasional significant discount) in major markets and then only when those markets have winning teams.

    Not much of a justification is it?
    Tulip bulbs and Florida swamp land were once shockingly priced (and fools couldn’t buy them fast enough to sate their “need”). Maybe PSLs are just today’s tulip bulbs… “Buy now! They’ll only be more expensive on the secondary market!”

    Unless, of course, the team sucks. Or lots of people realize they can’t afford $3-5k for a season ticket and the PSL payments… or sports fans actually begin trying to understand math and the declining value of non-capital assets….

    Let’s call them what they are: Time shares. Only you own all the weeks (ok, ten days a year)… for as long as the stadium lasts. If you pay for tickets for every event for the next 15-17 years as well.

    So, really, they are like time share vacation homes in which you have to pay the retail price that non-members do when you use them anyway. Plus the fees. In return, you own a license to the seat that declines in value every year the stadium is open.

    Step right up ladies an’ gennelmen….

  6. Atlanta pro sports are driven by corporate sales. Fan support for the pros has always been lukewarm here but corporate buyers love having tickets to hand out to clients. The downside to that is when the corporate world is in penny pinching mode, expenses like the company’s block of season tickets are an easy expense to cut.

    Atlanta hasn’t yet been awarded a Super Bowl. The NFL has already come around making new demands such as being exempt from sale taxes, which the state has granted. I expect they’ll keep shaking the piggy bank until money stops falling out. If the announcement for the 2019 and 2020 Super Bowls don’t include Atlanta, expect local support for the entire stadium project to fall apart and for it to be a significant issue in next years mayoral election. PSL sales likely would tank as a result.

    The NFL likely will give Atlanta one of the Super Bowls because not to do so would endanger the “Build a new stadium, get a Super Bowl” argument most teams use to get the public to pay for a new facility. Atlanta is an incredibly insecure town, always look for external validation. Being awarded a Super Bowl likely will do wonders for the PSL sales just for the civic bragging rights. Guess we’ll find out sometime this month after the owners meeting.

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