Wednesday, October 14, 2009

Guesses, Assumptions, and Some Actual Facts About PSLs

The Cubs' bankruptcy process appears to be turning around faster than Kosuke Fukudome swinging at a breaking ball in the dirt, so the TRANSFER of control of the Cubs from the Tribune is nearing completion.  This process has been a wonderful learning experience for many of us about the bidding process for a sports team, the numerous hurdles needed to be cleared in a transaction of this magnitude, and tax evasion.

I am looking into working out a contract with my employer wherein I TRANSFER 95% of the work I currently do in exchange for 95% of the salary they would pay me as if I TRANSFERRED 100% of the potential work, so that I can pay 0% in taxes each year.  Thank you, Sam Zell, you beautiful sneaky bastard.  Let me know how the IRS thing goes once this all works out.  I'm sure it will be fine.

As the Tribune Ownership Era draws to a close and we prepare for the Ricketts Majority with a Dash of Trib Ownership Era nears, we can start wildly speculating on what the new folks in the big office are going to do with our Cubs.

One thing is for sure, the Tribune never had $450 million in debt to deal with (not on the Cubs side of the business anyway) so one has to figure that the Ricketts family will be looking for revenue anywhere they can find it.  I can't imagine that anything is absolutely off the table.  If they haven't already started discussing such things, somewhere in a room behind closed doors, they will be talking about Jumbotrons, selling naming rights to Wrigley Field, building an entirely new stadium somewhere, and/or rolling out some sort of Personal Seat License plan.

Of the options above (and I'm sure there are other ideas I haven't even conceived yet), the one that concerns me most as a season ticket holder is the implementation of the PSLs.  If they take this route, the Cubs would be the first MLB team to have a PSL plan without having a new stadium.  Currently, the Diamondbacks, Cardinals, Padres, and Giants have PSL plans of various sorts in their new stadiums.  The Twins have also rolled out a package for their new park for next year, and are currently selling the PSLs to their fans.

Interestingly enough, neither the Mets or the Yankees have PSLs in their new mega-elite stadiums.  My guess is that they are selling the seats for such exorbitant fees that taking a PSL on top of that would be gratuitous, even for elite New York snobs.

Also, the good news for most Cubs season ticket holders is that the teams with PSLs currently only have relatively small parts of the stadium under a PSL policy.  In addition, it seems that when most MLB teams implement a PSL system, they roll it out as a membership in an elite club that features seats in a relatively small area of the park along with perks above and beyond what the "typical" season ticket holder would receive.  Some are pretty standard like the San Diego Padres Founders Club package:
  • Seats as wide as 22 inches
  • In-seat food and beverage service
  • Access to four private lounges
  • Private concourse
  • Padded seats
  • Extended legroom
  • VIP parking opportunities
However, some teams have gotten a bit creative with their marketing of the Club memberships.  The St. Louis Cardinals Founders Club sold licenses for the best seats in the new Busch Stadium with one of the perks being a freeze of ticket prices for members for a five year period:

There are a number of benefits and privileges that Ballpark Founders receive. Ballpark Founders have the right to maintain and control, for as long as they choose, the seats that offer the best views and the closest proximity to field. Also, the per-game ticket prices are guaranteed for five years (2006-2010), if all of the Founders Fees were paid in full during the 2004 season. Ballpark Founders also have the ability to transfer, will or sell seats to anyone. They will also have the right to purchase season tickets for their chosen seats as long as the Cardinals play in the new ballpark. Lastly, the original Ballpark Founders will have the option of being recognized in the Ballpark Founders Recognition Display located on the main level of Busch Stadium behind section 147.

The Arizona Diamondbacks' Legacy Club is likewise the only portion of Chase Field that requires a PSL purchase.  In addition to the ownership of the seat license:

Legacy Club members receive...
  • Personalized Reserved or Valet Parking, one parking option for every two seats purchased.
  • Personalized Seats: Each of the Member's seats will include an optional nameplate indentifying you as a Legacy Club Member.
  • First priority on the purchase of additional regular season tickets and post-season ticket packages!
  • Exclusive opportunity to purchase an all-inclusive food and beverage Premium Package.
  • Invitation to annual reception highlighting the season's food and beverage offerings.
  • Exclusive access to the all new Sonoran Room

The Twins seem to be taking the amenities up a notch for their PSL purchasers in the new Target Field.  The Minnesota Twins Legends Club includes an upscale weather-protected lounge and dining area for members.  Take a look at the brochure on this web page and tell me you don't at least consider for a second the idea of switching allegiance to the Twins.

The San Francisco Giants CSL Charter Seats seems to be the largest chunk of seats in any one baseball stadium to fall under a PSL policy.  The Giants have about 15,000 seats that come with a PSL.  That is over one third of the seats in the 41,500 seat ballpark.

So, the Cubs have a number of teams that have come before them that have set the bar pretty high for what a fan should expect from purchasing a PSL.  All of the stadiums offer better amenities to their Club members than the Cubs currently have to offer in Wrigley Field as it is currently configured.

The other consistent factor in the decision to go with PSLs is the right the purchasers would have to transfer their seats by sale or through a will or trust.  Currently, Cubs ticket holders need to skirt the system with some backdoor arrangements in order to keep long-held tickets in the family or sell them to someone else (which can get problematic when disagreements occur).  A Personal Seat License becomes the property of the purchaser and can be sold for however much the market for that License will bear, so the purchase of such Seat Licenses and Club Memberships can be viewed as an investment.

After looking into some of the other plans, I don't think the Cubs will be able to roll out any PSL plan before they figure out a way to renovate the stadium to provide the types of amenities that one would expect.  Notice that I said "before they figure out a way to renovate the stadium" and not "before the stadium is renovated."  I'm sure there will be something rolled out within the calendar year of 2010 that will outline the selling of seats or suites in areas of the stadium that don't exist yet.

Also, the Cubs have traditionally had a bit more arrogance when it comes to factoring in their fan base's economic concerns, so they may not necessarily care that Wrigley can't compete on a luxury level with the other existing plans.  They may roll out a package because they know they can because its the Cubs.  I know the Tribune could care less, and I'm hoping the Ricketts care more about the fans, but since it look slike Crane Kenney is sticking around for awhile, I'm not holding my breath for a major culture shift within the Cubs' upper management.

We probably have a better chance of seeing Aaron Miles do something productive on the baseball field. 


duey23 said...

Good post Tim and thanks for all of this info. I think we've been worrying about the same thing in our small conclave that shares our seats.

The what-ifs can drive you absolutely insane as season ticket holders who truly are at our top limit of "investable assets" with the current pricing model.

Maybe I should switch my investment fund from Schwab to TDAmeritrade to get an "in".

Aisle 424 said...

Thanks. It also appears that some of the PSLs are for specific amounts of time, but the info I found wasn't very illuminating. I'll probably have an update as I dig more around the existing policies to see what other wrinkles there are that aren't prominently displayed on their team websites.

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