The New York Jets auctioned $16 million worth of licenses for the best seats in the National Football League team's new $1.6 billion stadium, while holding back some for later sale.
Fans drove bidding for locations in the front rows near the center of the field as high as $200,000 before the Jets ended nine days of auctions run by EBay Inc.'s Stubhub. About 1,380 seats in the luxury ``Coaches Club'' remain, which the team may sell at fixed prices.
Team owner Woody Johnson said the licenses, which give fans the right to buy amenity-loaded season tickets in the section, averaged more than $26,000 each. The Super Bowl-champion New York Giants, who will share the stadium, are selling licenses to the same seats for a fixed $20,000 each.
``We achieved what we wanted to achieve,'' Johnson said in a telephone interview. ``Nobody really knew what the outcome would be and we're very happy with the results.''
Johnson said the auction was a ``totally novel'' approach to selling the licenses, and a learning experience for both the club and Stubhub. He said the lessons included: don't overwhelm demand with too much supply; don't create confusion by closing too many auctions at the same time; and close auctions between 7 p.m. and 11 p.m. when people are home from work.
The Jets' auction was the largest ever held by Stubhub, Johnson said, even though the team and online retailer reduced the number of seats for sale from 2,000 after saying that having too many available hurt demand.
`Make a Choice'
``We found out early that just putting too many lots out made it very, very difficult for people to focus on a seat and make a selection,'' Johnson said. ``When we got it down to between 10 and 20 lots a day, it was much more efficient in terms of the ability of the buyer to make a choice and bid.''
Mike Cramer, a former president of baseball's Texas Rangers who teaches sports business at New York University's Preston Robert Tisch Center, said he would have been surprised if the Jets had sold all 2,000 licenses, given the global economic crisis.
``There's always a market for premium stuff,'' Cramer said in a telephone interview. ``But I would be very surprised if they'd sold it all at prices higher than the Giants.''
It makes sense for the team to withhold seats if there were signs the market was flooded, he said.
``If some have been pulled back, that would indicate that the numbers were a bit lower than the Jets wanted or had expected,'' he said. ``You have to try to protect the integrity of the price.''
Behind Bench
The Jets announced in August that they would auction 2,000 licenses for the club seats located behind the team's bench in the East Rutherford, New Jersey, stadium.
Paying the one-time fee gives fans the right to buy $700 tickets to each game that include access to the sideline five yards from the Jets' bench, a private bar and lounge, food and beverage service, premium parking and increased access to tickets for other events at the stadium.
The Jets also said the club would charge between $4,000 and $25,000 for licenses to seats in the stadium's lower bowl, earning about $170 million after taxes toward the cost of the stadium. No license fee was placed on 27,000 seats in the upper deck. The Giants said in July that the team would sell licenses between $1,000 and $20,000 to all stadium seats, for about $185 million.
Teams Compared
The Jets didn't set a public benchmark for what they expected to earn from the auction. They outgained the Giants by about $3.7 million on the first batch of seats, based on the average price of the 620 licenses sold.
``We were aware of the auction concept when we made the decision to set a PSL price of $20,000 for those seats and allow the current holder of those seats to have the first opportunity to purchase them,'' Giants spokesman Pat Hanlon said in an e- mail.
Johnson said the team would analyze data gathered during the auction before determining how to price the remaining Coaches Club seats, probably for direct sale.
``We're leaving no stone unturned here,'' Johnson said. ``We're going to go through our analysis and then we're going to make those available.''
(Source: Bloomberg)
