Despite recent dip, Ravens PSLs have been a good investment

September 10, 2009 8:22 PM
The Ravens have sold out every regular season game in Baltimore — this season included — since the franchise arrived from Cleveland in 1996.Between October 2007 and October 2008, the stock market lost more than 37 percent of its value. Investment funds were crushed and stock portfolios were shadows of their former selves.

Also in October 2008, a pair of Permanent Seat Licenses in a lower-level end zone section at M&T Bank Stadium sold for $3,550 each — about 8 percent more than the price for comparable seats sold the previous year.

“We don’t have a dollar invested in the stock market,” said Pat Smart, a contractor who has been buying and selling seat licenses for the last five years with his wife. “In a good year at any time we’ll have close to $150,000 invested in PSLs. We might have broken even a few years but we have never lost a dollar.”

Over the last year, however, the recession has taken its toll on the open market for permanent seat licenses at M&T Bank Stadium: The average price for a Baltimore Ravens PSL fell from $4,200 in 2008 to $3,400 this season, according to a Forbes team valuation.

That makes it a buyers’ market in the stadium seat license world — demand is down, even though after a surprising run in the playoffs last year, the product is better. Independent ticket brokers and individuals who buy and sell PSLs for a profit say the market is soft and activity is down despite the fact that many experts pick the Ravens to make the playoffs.

But confidence in the product and in the PSL market has not diminished. In an NFL world where some teams are facing local broadcast blackouts because their stadiums aren’t sold out, those who deal in Ravens ticket sales say the team remains one of the hottest commodities — and investments — in pro sports.

PSLs, which individual vendors sell for $1,500 to about $25,000 per seat, are a one-time purchase for a license that gives the holder the right to buy season tickets from the Ravens at face value. Started in Charlotte, N.C., in the mid-1990s as a way to help pay for the Panthers’ new stadium, seat licenses are now used by 15 teams in the NFL, including the Dallas Cowboys, who are opening a new stadium this year, and the New York Giants and Jets, who are scheduled to move into a new stadium that they’ll share in 2010.

The drop in the value of Ravens PSLs, which were implemented to pay for about half of the team’s $140 million move from Cleveland in 1996, is just another sign that the national recession that hit homes and businesses during the last football season has trickled down to the National Football League this year.

Across the league, slow ticket sales plague some markets, sponsors are hesitant (the Cowboys still have not sold the naming rights for their $1.2 billion stadium) and the value of eight teams declined last year, according to Forbes’ valuations.

In Baltimore, independent PSL brokers say the recession has created a mixed market this year. Demand is high for the premium seats, and PSLs for less expensive seats in the upper level are consistently selling. PSLs for seats priced in the mid-range are the ones remaining stagnant.

“The real expensive ones are easy to sell,” said Smart. “You get a nice set of seats in the middle of the field — if I had a set like that right now for $10,000 I could sell them tomorrow. I always have people calling about 40- and 50-yard line” seats.

But a PSL broker who asked not to be identified said he’s watched his mid-level end zone PSLs decline in value this year. It’s a hard knock for someone who lost his job this year and is relying more on the revenue that sale — if he makes it — will bring.

“It is bad right now in terms of value,” the broker said. “A couple of years ago you’d get $5,000. Now it’s $3,000 in the end zone.”

Karl Rose, president of, which operates a Web site that sells Ravens PSLs, said he’s seeing more fans willing to pay a premium to buy tickets for individual games — or the entire season — without forking over the thousands of dollars required to buy a PSL.

“It’s a far more digestible price point,” he said. “Not everyone can afford the thousands for licenses, and … I think in these economic times people are looking for more alternatives. They’re paying more than the [face value] for the tickets, but it’s a lot cheaper than the licenses.”

The economics of the PSL market is consistent with the economics of such other markets as retail, real estate, banking and “many other categories,” said Anirban Basu, chairman and CEO of Sage Policy Group Inc. in Baltimore. Despite financial losses across the board over the past year, higher-income households, while affected by the downturn, are still able to afford luxury items, he said.

“Those households have greater staying power and perhaps even greater optimism for the future,” Basu said. “For the high end of the market there is an awareness that the number of truly great seats at M&T Bank Stadium is limited and therefore this presents an opportunity to purchase a rarified asset perhaps at a slight discount.”

Rose noted that while there are not “bargains out there per se, there are deals.” For example, according to data kept by the team-sanctioned Ravens PSL Marketplace, a set of PSLs in the lower-level midfield area (near the 50-yard line) sold for $15,000 each in March 2008. Another set of PSLs in the same section but four rows closer sold for $14,000 in January of this year.

Meanwhile, Basu said, the middle-income households that can’t afford what they once could are moving toward the low-end price point.

“These are the products of downscaling,” he said. “There are still some people who can afford the very best. There are others who are saying ‘We want to be part of this … but we cannot in good conscience spend so much money on personal seat licenses when we have so many other pressing issues.’ ”

According to the team’s data, which does not include sales made by independent brokers such as Smart and Rose, of the 234 PSLs for upper-level end zone seats sold since May 2007, about half were sold in the last year. The average price per seat license sold in August this year was $1,877, about 13 percent below the three-year average for that section.

Of the 36 upper-level corner seat licenses, nearly 70 percent were sold in the last year. Their average sale price in August was $1,388, or 19 percent below the three-year average.

Meanwhile, premium PSL values did not suffer as much. Lower-level midfield seats in August were selling in the Ravens Marketplace for 10 percent less than the three-year average, while the sideline club seats actually increased by 9 percent in sale price.

Outside brokers note that despite the change in value this year they are still making a profit from their sales. If they don’t get the asking price for their PSLs, they can always sell the game tickets at a profit and hang on to the seat license until they get an offer they like.

Mike David, 28, has been buying and selling PSLs for the past year. He said he recently sold a set of four tickets for the whole season at a $1,200 profit. The face value of all four tickets was $2,800 for the season and he is still hoping to sell the PSLs separately for $9,800 total, a minimal profit.

“My goal when I buy a pair of PSLs is to make a $2,000 profit,” said David, whose day job is with the U.S. Patent and Trademark Office. “[It’s] a better investment than investing in the market or something because you are guaranteed to get at least your value back.”

Smart and Rose echoed David’s comments, noting that even with the decline in demand for PSLs, the demand for tickets is still high and they can earn money through those sales on the season. Smart, who also sells PSLs and tickets for the Pittsburgh Steelers, Philadelphia Eagles and Cleveland Browns, said Ravens sales have the most activity and are the most lucrative.

“A $5,000 [license] in Cleveland would probably sell for $10,000 in the Baltimore area,” he noted.

The steady clamor for Ravens tickets — despite tough economic times — is largely due to supply and demand. The team has capped the number of PSLs at 62,000 for a 73,000-seat stadium, and a PSL waiting list to buy a license from the team at face value is closed out with 3,000 people in line.

About half of the remaining game tickets are used by the team for hospitality sales, sponsors and other partnerships, according to Baker Koppelman, the Ravens vice president of ticket operations. Koppelman said sales for access to the team’s 33 hospitality tents, which run between $283 and $350 per person, are down about 25 percent, but he noted that the team had expected a dip in that area.

Meanwhile, the remaining 6,000 tickets sold by the team at face value don’t last long — according to Koppelman’s office they sell out for the season within the first hour of tickets going on sale.

“When you have a base as strong as ours, having 6,000 tickets to sell is not a lot in the big picture,” said Koppelman.

Therefore the Ravens are far removed from NFL teams in such markets as Detroit, San Diego, Oakland and Jacksonville, which all expect television blackouts this season.

“You never want to say you take it for granted, but we’re in a position where our numbers are strong enough where you [should] never have to worry about that,” Koppelman said.

He said that when the Ravens began selling PSLs in 1996, the team was “very conscious from the beginning” about creating a strong market for the product and legitimizing the perceived value of the PSLs, which then ranged from a few hundred to a few thousand dollars.

The marketplace has responded. PSLs bought in 1996 are now worth at least three times the initial investment, on average, according to data provided by the Ravens ticket office.

“My initial, knee-jerk reaction was I thought they weren’t going to be worth the investment at $2,500 or $3,000 apiece,” said Rose, who has been a ticket broker since 1984. “To my surprise I was completely wrong. I think it’s a far better value than the stock market.”
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