Three reasons Vikings fans might want to gamble on a pricey seat license
Gov. Mark Dayton told the Minnesota Sports Facilities Authority that he wants them to stick up for Vikings fans and put a lid on the new seat fees the team is planning at the new Vikings stadium.
The seat fees are called "Stadium Builder Licenses" in state law, but they're better known as personal seat licenses (PSL). They're a one-time fee that gives a fan a legal title to a seat. Fans still have to pay full price for season tickets in addition to the tickets, but they are guaranteed the same seat and same tickets as long as they own the license.
In the NFL's newest venue, Levi's Stadium, those PSLs sold for as much as $80,000 a seat, and fans bought $403 million dollars worth of them before the first play by the 49ers in the new stadium in Santa Clara. The licenses are expected to cost much less in Minneapolis. But the sales are so lucrative that an average NFL seat license deal could pay the Vikings more than $150 million before the new stadium opens -- and that counts towards the team's share of the stadium costs.
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The deal means some people could pay twice for the Vikings stadium twice: Once as taxpayers who eat and drink and stay in hotels in Minneapolis, or those who play electronic pulltabs, and then again, as seat license holders.
In a letter to the MSFA, Dayton said he wants the Vikings owners, among them Zygi, Mark and Leonard Wilf, to put more of their own money in the deal. "I have always said that this building should be a 'People's Stadium.' Excessive personal seat license fees conflict with that goal," Dayton wrote in a letter to the MSFA yesterday.
But if you accept the fact that the team's owners are going to charge fans more to pay for the new stadium, some argue PSL are a better deal than season tickets alone.
Here's the list of reasons, according to Rick Ohanian, an Ohio architect who claims he is one of the inventors of the seat license. He pitched the idea for an arena in Columbus back in the 1980s as an alternative to outright taxpayer subsidies.
Fans get a tangible asset. If a team is determined to get stadium funding directly from the fans, it can ask for it up front and give them a seat license, or the team can simply borrow the money and pay it off with higher ticket prices. But with higher ticket prices, fans don't have anything to show for their investment at the end. A seat license gives them a chance to sell the seat and get some money back if they need it, if they get divorced or lose their job, for instance. It's a semi-liquid asset with a known market -- Vikings fans.
There's a chance the licenses might actually appreciate. The Pittsburgh Post Gazette reported in 2011 that seat licenses sold by the Steelers in 2001 turned out to be a fabulous investment. It said the 49,278 seat licenses sold for an average of $1,172, but brought in an average of $9,802 in an online market for reselling the licenses. There's also a downside risk: The New York Post says the market for Jets seat licenses at MetLife stadium are collapsing, with fans asking for as little as a third of what they paid when the stadium opened in 2010. It all depends on the team on the field.
The scalper's share. That's what Ohanian calls the chance to sell some of the most valuable tickets available to seat license holders. For post season games or intense conference rivalries, tickets could be worth many multiples of their face value. Fans that sell some of those tickets over the 30-year life of the stadium could recoup a substantial part of the cost of their PSLs. "The gravy to the deal is the playoff tickets," Ohanion says. "Playoff tickets increase maybe 10 to 20 fold. I mean, you might have a 40 dollar ticket be worth 400, you might have a 250 dollar ticket go for 25 hundred. Who knows. I mean, I've seen tickets down in Dallas for playoffs go for three or four thousand dollars. So, you could pay off a PSL just by selling three or four playoff tickets.
Season ticket holders have some of these advantages now -- like being able to sell their tickets. But long-held season tickets are only for the Metrodome, and the new stadium gives the Vikings a once-in-a-generation do-over on the ticket market. That said, PSLs don't prevent the team from jacking up ticket prices as well.
The licenses also have limits. Typically, they don't extend to non-football events. A 50-yard line seat near the field may not guarantee you the same seats if U2 comes to town, for instance.
Details of those licenses, like all the rights they include and what they'll actually cost, are under wraps for now. MSFA chairwoman Michele Kelm-Helgen said in an interview yesterday that the PSL's are the last -- and toughest -- point in the negotiations between her agency and the Vikings.
"We have put it aside for the end, because it really matters in the context of all the other things we're trying to reach agreement on," Kelm-Helgen said. Her agency is actually the legal seller of the PSLs, although the Vikings will market them.
The team and the stadium authority set to wrap up talks about those details this week, and a seat license "program" ready to include in a overall stadium agreement between the state and the Vikings. They're scheduled to sign off on it at the end of next week.
"I think its really important that we're up front with people and identify OK, this is what it is, and assuming there's a (PSL) program this is how much money is raised, and this is what it will look like," Kelm-Helgen says. "They won't have the specifics for each seat, but I think you will see the upper end and then maybe an average will be. That kind of thing... That will actually be written into the agreement so there are some limits to the program itself."