THE NEW COMBINED STADIUM: Enter the "Trojan Horse"

[BaumerJet]

Achillies (WOODY) has laid his work down, thanks to the New York Times this morning...

July 1, 2008

Sports Business

Jets Explore Fee Plans That May Sit Better With Fans

By RICHARD SANDOMIR

Woody Johnson is in a bind that might cost him millions of your dollars.

Johnson, the Jets’ owner, could only watch last week as the Giants took the lead in setting personal seat license prices at $1,000 to $20,000 each at the $1.6 billion stadium the teams are building. With the market established, Johnson cannot appear to gouge his fans by charging a cent more, however he structures his prices.

He has no cogent argument for charging more. What have the Jets done for their fans lately — or for 39 years, the last time they won a Super Bowl?

The Giants have won three Super Bowls.

The most appealing thing Johnson could do is charge Jets fans less. Check that: the most appealing thing would be not to sell any licenses at all, which would be like sighting pigs flying in formation over the Meadowlands. No one wants to buy seat licenses, one-time fees (or user taxes) that give fans the continued right to buy season tickets.

But the Jets are not conceding that their license prices must mimic those of the Giants.

If the survey the Jets sent to some of their fans last month is a guide, they will offer myriad payment terms and some buyback options that might ease P.S.L. sticker shock.

“There are different ways to structure a P.S.L. program, which is why we are consulting fans and studying the options before coming to a decision,” said Matthew Higgins, the team’s executive vice president for business operations.

Selling a P.S.L. for a profit will attract some Jets and Giants fans. But the investment angle seems antithetical to the behavior of fans, especially long-entrenched ones, who buy season tickets to attend games, not to follow the appreciation of license values.

In the Jets’ P.S.L. survey, fans were asked whether they agreed or disagreed with three pro-license arguments: that “they allow me to own a piece of my team, are a good investment or are an important part of the financing of the new stadium.”

The only germane statement is the third; the first holds only if Johnson promises to give them a piece of his profits if he sells (again, more airborne oinkers), and the second relies on timing, seat location and desire to sell.

“My thought is these tickets were my father’s; they’re mine and my brothers’ now, and I’d hope my kids would feel the same I do,” said Chris Clarke, of Tinton Falls, N.J., who said he would buy six upper-deck licenses to Jets games if they cost no more than $1,000 each. “I don’t think I’d ever sell them, so it’s not like owning a piece of the team.”

Selling P.S.L.’s in the current economic downturn will not be simple, whatever the payment terms. Some fans might have hated them during prosperity. But now?

“The owners wanted the new stadium to make more money and now want us to pay for their greed,” Arnold Spier of Fair Lawn, N.J., who has had four upper-deck Jets season tickets in his family since the 1960’s, wrote me in an e-mail message. “Well, hello. Gas is at an all-time high. Food prices have skyrocketed. Housing is crashing.”

Christine Niedermeier, of Stratford, Conn., whose four Giants season tickets date to the 1950s, figures her choice seats might cost her $80,000 in licenses. “It’s hard enough coming up with $4,000 a year for the tickets,” she said and added, “There’s no credit in their fee structure for those of us who have been underwriting this team for decades.”

Johnson has options if season-ticket holders refuse the more expensive seat-license prices he will propose. He can offer them cheaper licenses in worse sections, a standard, if cold, way to treat a hard-core fan, or bring in replacement buyers from his waiting list.

Both options, also open to the Giants, stress the bottom line for fans: If you think paying steadily higher prices ensured you generations in your legacy seats, you’ve deluded yourself into believing the teams care as much for you as you do for them.

Johnson could seek some cheers by not selling P.S.L.’s to every seat, as the Giants have, perhaps unfairly. Even if the new stadium is better than the old one, the worst seats should not require an extra levy. Johnson could designate most of the upper deck off limits to licenses, which might then require higher P.S.L. fees for prime locations and unseat some fans who can only afford the tickets, not the licenses.

This will not be easy and will probably not be pleasant.

The Jets and the Giants might not have had to sell P.S.L.’s if the cost of their stadium had not doubled since they announced their deal in 2005.

“It costs more to build in New York, but the total is breathtakingly ridiculous,” said Marc Ganis, a sports industry consultant. “How did it get up to $1.6 billion, five times more than Gillette Stadium?”

Gillette, the home of the New England Patriots, opened in 2003 at a reported construction cost of $325 million, all paid for by the team. No seat licenses were sold.

E-mail: sportsbiz@nytimes.com

Ladies, Gentlemen & Bwanazulia; I give you THE CARROT!

[Maxman]

Selling a P.S.L. for a profit will attract some Jets and Giants fans. But the investment angle seems antithetical to the behavior of fans, especially long-entrenched ones, who buy season tickets to attend games, not to follow the appreciation of license values.

Thank you. That is what kills me about the whole investment angle people have been bringing up. Going to the Jets game is the only time in my life I don't think\worry about money.

But hey let's tie them into an investment. This way after each loss the drive home can be even more painful for me.

[aec4]

Nothing like listening to another person whine.

There are going to be seat licenses. Get over it. If you don't want to pay or can't afford them, then don't. There is nothing you can do about it. It may not seem right, but the team is a business and they choose to charge.

[Maxman]

Nothing like listening to another person whine.

There are going to be seat licenses. Get over it. If you don't want to pay or can't afford them, then don't. There is nothing you can do about it. It may not seem right, but the team is a business and they choose to charge.

The Jets wanted to charge more money than they will end up charging: FACT

So these "conversations" are good because they are helping communicate what people will and won't tolerate. FACT

What you should get over is being part of a conversation that has nothing to do with you. We are all basically debating how much we will pay. You golf on Sundays so this thread really isn't even for you.

The word Zip is here to stay: FACT

Revis can cover a crossing route: FACT

[faba]

The Jets wanted to charge more money than they will end up charging: FACT

So these "conversations" are good because they are helping communicate what people will and won't tolerate. FACT

What you should get over is being part of a conversation that has nothing to do with you. We are all basically debating how much we will pay. You golf on Sundays so this thread really isn't even for you.

The word Zip is here to stay: FACT

Revis can cover a crossing route: FACT

AEC will whine-FACT!

[BwanaZulia]

I love this line

Gillette, the home of the New England Patriots, opened in 2003 at a reported construction cost of $325 million, all paid for by the team. No seat licenses were sold.

Of course he leaves out the fact that they raised the cost of going to the game by 50% and have kept it the HIGHEST IN THE NFL since 2002. Doesn't mention that Gillette doesn't even have escalators and was built in the woods in Southern MA.

Hey, if Woody can pull it off and keep the Jets with lower PSLs, it would be a great PR move.

Again, PSLs are not bad, HIGH PSLs are bad. If you PSL was $50 per ticket they would be great. You would be able to keep them, save them, sell them.

It is only when they get into the big bucks (over $1,000) that the question of the "investment" comes into play.

BZ

[faba]

These are not investments when you live and die for your sport teams. They are what you get enjoyment out of in life. And most of us have very few things that gives them that satisfaction and enjoyment.

[Jet Moses]

Nothing like listening to another person whine.

There are going to be seat licenses. Get over it. If you don't want to pay or can't afford them, then don't. There is nothing you can do about it. It may not seem right, but the team is a business and they choose to charge.

Drop dead.

[Green DNA]

Perhaps when I go to the movies, I should buy a license for the privilege of sitting in a new theater and then paying for the movie on top of that

Perhaps when I go to a new restaurant, I should pay for license to get reservation, fund the building costs and then buy dinner on top of that

Perhaps when I buy a new suit, I should pay a license for the priviliege of buying the suit. After all, the new store costs money.

Perhaps when I go to the doctor I should pay a PSL for the right to have him give me physical (which I then get billed for)

Perhaps my wife will charge a PSL that will give me the right to have dinner in my own house (bad example, I may actually save money this way).

It is ludicrous to pay for the right to buy something. If I had the right of first refusal on any other event in the building, then it may make sense, but you get zippo. This is a money grab, extortion plain and simple. Funding the stadium is not my problem. In no other business does the customer pay for the business owner to build a new facility.

[Garb]

I love this line

Of course he leaves out the fact that they raised the cost of going to the game by 50% and have kept it the HIGHEST IN THE NFL since 2002. Doesn't mention that Gillette doesn't even have escalators and was built in the woods in Southern MA.

Hey, if Woody can pull it off and keep the Jets with lower PSLs, it would be a great PR move.

Again, PSLs are not bad, HIGH PSLs are bad. If you PSL was $50 per ticket they would be great. You would be able to keep them, save them, sell them.

It is only when they get into the big bucks (over $1,000) that the question of the "investment" comes into play.

BZ

First of all, the Patriots have actually won Championships in my lifetime. What have the Jest done for you?

I think I'd prefer to pay $165 per lower level ticket, per game at Gillette, than pay - what will a lower level seats cost at the new Giants Stadium PLUS a PSL? Plus parking?

Gillette did have Escalators - they proved faulty in the New England weather...dum-dums built 'em outside and escalators don't do well in the cold, wind, sleet and snow. Go figure

No offense, but PSL's are bull - made more so in the current economic climate. It all comes down to how much of your disposable income you want to put towards the Jets. Some of you have it: the money and/or inclination, and some of you don't.

[Thor99]

The Jets wanted to charge more money than they will end up charging: FACT

You've just described every business in the world.

[Maxman]

I love this line

Of course he leaves out the fact that they raised the cost of going to the game by 50% and have kept it the HIGHEST IN THE NFL since 2002. Doesn't mention that Gillette doesn't even have escalators and was built in the woods in Southern MA.

Hey, if Woody can pull it off and keep the Jets with lower PSLs, it would be a great PR move.

Again, PSLs are not bad, HIGH PSLs are bad. If you PSL was $50 per ticket they would be great. You would be able to keep them, save them, sell them.

It is only when they get into the big bucks (over $1,000) that the question of the "investment" comes into play.

BZ

I agree with that.

Glad you are finally coming around, lol.

[BwanaZulia]

Perhaps when I go to the movies, I should buy a license for the privilege of sitting in a new theater and then paying for the movie on top of that

Perhaps when I go to a new restaurant, I should pay for license to get reservation, fund the building costs and then buy dinner on top of that

Perhaps when I buy a new suit, I should pay a license for the priviliege of buying the suit. After all, the new store costs money.

Perhaps when I go to the doctor I should pay a PSL for the right to have him give me physical (which I then get billed for)

Perhaps my wife will charge a PSL that will give me the right to have dinner in my own house (bad example, I may actually save money this way).

It is ludicrous to pay for the right to buy something. If I had the right of first refusal on any other event in the building, then it may make sense, but you get zippo. This is a money grab, extortion plain and simple. Funding the stadium is not my problem. In no other business does the customer pay for the business owner to build a new facility.

Wow, those are some of the worst analogies I have ever read.

BZ

[Maxman]

You've just described every business in the world.

Not true. Smizzy has kept his rates reasonable even though demand has increased for his services. He does it for the love of the game, not greed.

[OJDidIt]

I honestly think the psl's will make good investment vehicles. This is a great opportunity to buy into the team we love! We can profit along with woody johnson! This is truly a team concept. The PSL has made my life better.

[Green DNA]

Wow, those are some of the worst analogies I have ever read.

BZ

Please explain.

[BwanaZulia]

Please explain.

- You don't by tickets to attend a restaurant

- You don't subscribe to a store that makes suits

- You don't follow one DR year in and year out.

- If you can't figure out your wife, I can't help you there.

At the very least compare them to other luxury, ticketed, events.

BZ

[Lil Bit Special]

First of all, the Patriots have actually won Championships in my lifetime. What have the Jest done for you?

I think I'd prefer to pay $165 per lower level ticket, per game at Gillette, than pay - what will a lower level seats cost at the new Giants Stadium PLUS a PSL? Plus parking?

Gillette did have Escalators - they proved faulty in the New England weather...dum-dums built 'em outside and escalators don't do well in the cold, wind, sleet and snow. Go figure

No offense, but PSL's are bull - made more so in the current economic climate. It all comes down to how much of your disposable income you want to put towards the Jets. Some of you have it: the money and/or inclination, and some of you don't.

My seats- 50 yd line lower level will cost $165 per game plus $30,000 psl in the new stadium. Figure the stadium will last 30 years. So its an extra $1,000 per year which breaks down to an extra $100 per game. Now my ticket is $265 per game.

[Lil Bit Special]

I honestly think the psl's will make good investment vehicles. This is a great opportunity to buy into the team we love! We can profit along with woody johnson! This is truly a team concept. The PSL has made my life better.

my seats would be $30,000 per seat. The stadium will last 30 years. I would go to every game for the next 30 years. Where do I profit from this?

[Green DNA]

- You don't by tickets to attend a restaurant

- You don't subscribe to a store that makes suits

- You don't follow one DR year in and year out.

- If you can't figure out your wife, I can't help you there.

At the very least compare them to other luxury, ticketed, events.

BZ

I can buy tickets to see a movie with no seat license,

I can buy tickets to see a concert with no seat license

I can buy tickets to see the Mets, Yankees, Knicks, Rangers, Nets, Devils, Islanders, NY Dragons with no seat license

Since when was football a luxury event? I'll answer my own question - since now. I don't need to pay just to obtain the right to buy something. I have been a subscriber for over 20 years without paying for a "license", whatever that is. As I said earlier, if I pay for a PSL, then I would reasonably expect to have the right of first refusal for every event that takes place in that location. Of course that is impossible since the Jets and Giants will be selling the license to the same seat twice. Without access to other events, the PSL is a scam, plain and simple. What benefit does having the license provide? None for the fan, it only puts money in the owners pockets.

It is not an investment either as it has a limited shelf life. 10 years down the road nobody is going to pay a premium when the know that the license expires in another 5 years. At that point, you will probably have to sell at a discount as the expiration date looms because with an expiration date it becomes a depreciable asset.

[OJDidIt]

Any true risktaker or self made-man would see the potential for great success and profit here!

Imagine purchasing a bundle of these psl's and then offering them as bundled investment limited partnerships! The profits would roll in! They could even be traded on secondary markets as shares to an s corp!

This is too good to be true! That is why the true risktakers win and the crybabies always lose!

God bless America, freedom and good old fashioned capitalism!

[Lil Bit Special]

Any true risktaker or self made-man would see the potential for great success and profit here!

Imagine purchasing a bundle of these psl's and then offering them as bundled investment limited partnerships! The profits would roll in! They could even be traded on secondary markets as shares to an s corp!

This is too good to be true! That is why the true risktakers win and the crybabies always lose!

God bless America, freedom and good old fashioned capitalism!

You still havent answered any of my questions.

I offered to you my 4 PSL's for only $20,000. If its such a great investment, you should easily make back the $20,000 you pay me...

And are you saying I should sell my PSL's after I buy them so I can make money? I go to football games to watch my team. I have no reason to sell. So where is the profit in it for me?

[bitonti]

You still havent answered any of my questions.

I offered to you my 4 PSL's for only $20,000. If its such a great investment, you should easily make back the $20,000 you pay me...

And are you saying I should sell my PSL's after I buy them so I can make money? I go to football games to watch my team. I have no reason to sell. So where is the profit in it for me?

LBS you might laugh but I bet if you bought those PSLs with the express purpose of selling them in 5 years you would double the asking price, easy.

They aren't making anymore 50 yard line seats on the lower level. Those PSLs, the most expensive ones, will have the best return in terms of resale value.

it is true if you buy the PSL with intent to use them there is no profit.

[Green DNA]

LBS you might laugh but I bet if you bought those PSLs with the express purpose of selling them in 5 years you would double the asking price, easy.

They aren't making anymore 50 yard line seats on the lower level. Those PSLs, the most expensive ones, will have the best return in terms of resale value.

it is true if you buy the PSL with intent to use them there is no profit.

Not only is there no profit, but by the expiration date of the PSL, you have paid an additional $20G's for your tickets.

[Lil Bit Special]

LBS you might laugh but I bet if you bought those PSLs with the express purpose of selling them in 5 years you would double the asking price, easy.

They aren't making anymore 50 yard line seats on the lower level. Those PSLs, the most expensive ones, will have the best return in terms of resale value.

it is true if you buy the PSL with intent to use them there is no profit.

I'm sure I could make a profit on them in 5 years. But after that the value of it goes down. What moron is going to spend $30,000 on a psl knowing it will be no good in 20 years.

And most Jets fans arent going to sell their PSL's. They are fans and want to go to the game. The team shouldnt be encouraging fans to profit off of this.

I offer my deal up to anyone. Anyone want to buy my seats for a good price let me know. I dont have $80,000- $120,000 to spend on PSL's, but if you do I will sell you my rights to my seats. Great investment opportunity.

[BwanaZulia]

I can buy tickets to see a movie with no seat license,

I can buy tickets to see a concert with no seat license

I can buy tickets to see the Mets, Yankees, Knicks, Rangers, Nets, Devils, Islanders, NY Dragons with no seat license

Since when was football a luxury event? I'll answer my own question - since now. I don't need to pay just to obtain the right to buy something. I have been a subscriber for over 20 years without paying for a "license", whatever that is. As I said earlier, if I pay for a PSL, then I would reasonably expect to have the right of first refusal for every event that takes place in that location. Of course that is impossible since the Jets and Giants will be selling the license to the same seat twice. Without access to other events, the PSL is a scam, plain and simple. What benefit does having the license provide? None for the fan, it only puts money in the owners pockets.

It is not an investment either as it has a limited shelf life. 10 years down the road nobody is going to pay a premium when the know that the license expires in another 5 years. At that point, you will probably have to sell at a discount as the expiration date looms because with an expiration date it becomes a depreciable asset.

- You don't go to the same seat or buy a season a movie

- You don't see the same person in concert, or sit in the same seats, or buy a season of concerts.

- All those other teams have their own prices and policies.

I am sorry, but if you don't think paying $2,000 a year to go see 10 games as a luxury, you must be made of money. It IS a luxury, just like going to see a concert or a movie. They are all part of a entertainment industry that increase their prices.

Concerts are over $100, movies are $12.

Food, housing, clothes. Those are not luxuries. Going to see a sporting event is a luxury.

Luxury: something that is an indulgence rather than a necessity

Sporting events are luxuries and just like the cost of a brand new Audi, they are going to go up as demand goes up.

BZ

[Lil Bit Special]

Not only is there no profit, but by the expiration date of the PSL, you have paid an additional $20G's for your tickets.

I look at it as spending an extra $1,000 per year on my seats. $265 a game doesnt seem to bad to pay for the best seat in the house... problem will be down the road where my seats will be over $500 a game.

And without a PSL... my seats would probably still be $265 a game and no way to transfer my rights.

My biggest problem is I dont have $80,000-120,000 to pay the PSL.

[Maxman]

my seats would be $30,000 per seat. The stadium will last 30 years. I would go to every game for the next 30 years. Where do I profit from this?

If we are fortunate enough to die painful and tragic deaths the PSL could be sold and our families can profit.

Yo Jets -- I know how to market this stuff. HIRE ME.

Death Happens would be the title of my brochure.

[Lil Bit Special]

If we are fortunate enough to die painful and tragic deaths the PSL could be sold and our families can profit.

Yo Jets -- I know how to market this stuff. HIRE ME.

Death Happens would be the title of my brochure.

If I died on a sunday morning my family would still go to the game... "to honor me"

[flgreen]

If I died on a sunday morning my family would still go to the game... "to honor me"

Can I have the seats?

I'll let your wife and kids come.

Let us know when OJ the BSer comes up with the big bucks for his investment

[bitonti]

Not only is there no profit, but by the expiration date of the PSL, you have paid an additional $20G's for your tickets.

the irony of this statement is it doesn't matter if you pay 1G or 100G for the tickets...

*wait for it *

ITS ALL LUXURY

no one NEEDS to go to the game, it is not an essential it is a luxury. In theory every dollar spent on the Jets tickets are in fact a waste - with 0 return on investment. that doesn't change whether the tickets are 10 dollars or 1000 dollars. It literally doesn't matter what X is the ROI is always 0.

now we can sit here and talk about family, good times, great BBQ, having fun or whatever - but none of those things translate into money well spent - at least not from a CPA's point of view.

If you are a season ticket holder (who doesn't sell for profit) then the chances returning any investment are always zero.

[Maxman]

the irony of this statement is it doesn't matter if you pay 1G or 100G for the tickets...

*wait for it *

ITS ALL LUXURY

no one NEEDS to go to the game, it is not an essential it is a luxury. In theory every dollar spent on the Jets tickets are in fact a waste - with 0 return on investment. that doesn't change whether the tickets are 10 dollars or 1000 dollars. It literally doesn't matter what X is the ROI is always 0.

now we can sit here and talk about family, good times, great BBQ, having fun or whatever - but none of those things translate into money well spent - at least not from a CPA's point of view.

If you are a season ticket holder (who doesn't sell for profit) then the chances returning any investment are always zero.

That post was LEGEN -- DARY.

[flgreen]

I'm sure I could make a profit on them in 5 years. But after that the value of it goes down. What moron is going to spend $30,000 on a psl knowing it will be no good in 20 years.

And most Jets fans arent going to sell their PSL's. They are fans and want to go to the game. The team shouldnt be encouraging fans to profit off of this.

I offer my deal up to anyone. Anyone want to buy my seats for a good price let me know. I dont have $80,000- $120,000 to spend on PSL's, but if you do I will sell you my rights to my seats. Great investment opportunity.

You may have hit the nail right on the head here how you can make a profit, and still go to the games.

The seats you have are elite seats. These seats will sell out immediately. They will also add at least 20% by opening day of the stadium.

I don't know what your financial position is, but there is no way I would just give the seats up. What I would consider is taking a mortgage on my house to pay those PSL's, and buy 4 more seats, not in the elite section, but still good seats. If they offer a 5 year pay off situation, jump on it.

No matter what happens, you will make enough money on the elite seats, to pay for the PSL's on the good seats, then pay your mortgage loan off.

If the Jets should make a run at the Super Bowl, and they could if Clemens can play, you hit the jackpot.

Just something to think about.

[Jet Moses]

ITS ALL LUXURY

Exactly. It's not like power service. PSE&G cannot charge whatever they want for their service simply because they are a monopoly.

But Woody can, because it is.

Nobody has to be a season ticket holder of a NFL franchise. It's a choice.

OK, fair enough. So why do players have to sign contracts? Why is their revenue sharing? What is the purpose of a collective bargaining agreement?

And why oh why isn't the fanbase included in it? Not just in NY, or Dallas, but in New Orleans and Cleveland?

Is a PSL a binding agreement or not?

[Green DNA]

the irony of this statement is it doesn't matter if you pay 1G or 100G for the tickets...

*wait for it *

ITS ALL LUXURY

no one NEEDS to go to the game, it is not an essential it is a luxury. In theory every dollar spent on the Jets tickets are in fact a waste - with 0 return on investment. that doesn't change whether the tickets are 10 dollars or 1000 dollars. It literally doesn't matter what X is the ROI is always 0.

now we can sit here and talk about family, good times, great BBQ, having fun or whatever - but none of those things translate into money well spent - at least not from a CPA's point of view.

If you are a season ticket holder (who doesn't sell for profit) then the chances returning any investment are always zero.

If you want be literal about things then "luxury" applies to anything other than housing food and transportation. If I put a quarter in a video game then that is luxury because it is non-essential?? It makes no sense to look at Return on Investment for leisure items because you are not looking for a financial return, you are looking for enjoyment. When I play golf, I enjoy it when the round is in the $40-$75 range and I am getting my moneys worth. If it was $500 a round then it would not be worth it to me and I would not play because it is not worth my investment. It matters to me whether the tickets are $10 or $1,000, because at some point the return in terms of enjoyment per dollar spent are not worth it. That is the return on investment here, not what the Jets and Giants are trying to push, which is a depreciating asset.