The average price of ticket licenses for U.S. sports teams declined about 20 percent since last year on the world’s largest online marketplace for seat rights, the first decline since the site opened in 2006.
Seasonticketrights.com founder Kyle Burks said the average price of a seat license, which gives the holder the right to buy season tickets to a given sports franchise, fell to $2,000 in 2009 from $2,500 in 2008, with low-performing teams in California, Ohio and other states hard-hit by the recession posting the biggest declines.
The National Football League’s Cincinnati Bengals and baseball’s San Francisco Giants sustained the biggest price drops, between 60 and 80 percent, Burks said in an interview.
“There’s really two factors that will affect your year-to- year secondary price,” he said. “Team performance is one and the local economy is the other.”
Seasonticketrights.com, the world’s largest online marketplace for seat licenses by sales, handles transactions at 19 venues in the major U.S. sports, including 11 in the National Football League.
Andrew Zimbalist, who teaches economics at Smith College in Northampton, Massachusetts, said secondary prices reflect a more accurate view of the worth of tickets than their face value. So- called personal seat licenses, also known as PSLs, function more like a futures contract, with fans predicting what they can afford and how teams will do over multiple years.
‘Long-Term Commitment’
“What people are thinking about when they look at a PSL purchase is making a long-term commitment,” Zimbalist said in a telephone interview. “If a team is performing poorly, fans are less likely to want to make that commitment, especially in these economic times.”
Price drops have been significant for some teams, Burks said. The cost of a Bengals lower-level license dropped from $2,472 in 2007 to $559 this year and a club-seat license for baseball’s Giants fell from $17,371 to $4,816 over the same period.
“The Giants are down about 60 to 80 percent over the past three years,” he said. “That’s a factor of the California economy, and the Giants went from two years ago having Barry Bonds and the All-Star Game to today struggling to get fans to follow the team. Secondly, the Cincinnati Bengals: team performance has just cratered over the last couple of years.”
California is one of seven states with jobless rates higher than 10 percent, and real estate prices in San Francisco have fallen about 32.4 percent since last year, according to the S&P;/Case-Shiller 20-city housing index. Ohio’s jobless rate climbed to a 25-year high of 9.4 percent in March, and the Bengals haven’t had a winning record since 2005.
Constant Volume
While volume of seat-license sales has remained steady in the economic slump, Burks said, only three NFL teams have seen prices increase or hold steady: the Pittsburgh Steelers, the Houston Texans and the St. Louis Rams.
The Steelers won the NFL’s Super Bowl title in February. The 8-8 Texans finished last season winning five of seven games in a market where the jobless rate in February was 6.4 percent, compared with 8.1 percent nationally. And licenses for the Rams, who’ve won five games in two seasons, couldn’t get much cheaper at $1,093 for lower-level seats last season.
“The Steelers, that’s primarily because team performance has been outstanding,” he said. “And the Rams, they’ve kind of hit rock bottom.”
(Source: Bloomberg)
