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Tuesday, September 7, 2010

Personal Seat Licenses

In their new stadium, the Jets and Giants are offering "personal seat licenses" (PSLs). A "personal seat license" is one of the biggest scams in sports.

Here's how I thought "personal seat licenses" worked, when I first heard of them. You pay $X for the seat license, and then you get tickets for $0 for a certain number of years. I thought it was a lump-sum payment, buying your tickets in advance.

Actually, the PSL merely gives you the right to buy tickets. You pay for the PSL *AND* you pay for the season tickets every year. If you don't buy the season tickets, you forfeit your PSL.

If you buy a PSL, it's like saying "I'm a sucker. Please rob me." What prevents the team from jacking up prices 15%+ per year, several years after you buy the PSL? What prevents the team from cutting back and losing, after you buy the PSL?

For a traditional "season tickets" arrangement, you get to keep your seats every year. You may move to better seats, when people don't renew their tickets. The "right to renew" has some value. That gives people an incentive to buy tickets, even when the team sucks.

As I mentioned before, a dutch auction is the best way to sell tickets. That should maximize profits for the seller. Right now, tickets are sold for a fixed price. If the price is too high, there are empty seats. If the price is too low, then there's an arbitrage opportunity for scalpers.

Unfortunately, there's no incentive for ticket sellers to change. Middlemen like Ticketmaster take a huge cut of every sale. It's probably cheaper to hire a few people to answer the phone, than to pay Ticketmaster's extortionate fees. It would be straightforward to write "dutch auction" ticket selling software. (I hope someone hasn't patented it!)

"Personal seat licenses" are a ripoff. Team owners are squeezing extra money out of gullible fans. You have to buy the PSL, *AND* buy each season's tickets, with no guarantee that the ticket price won't be jacked up.


Anonymous said...

The clown rail companies in the UK are ripping off their customers.

A couple purchased a discount train ticket.

Due to changes in their circumstances they got off the train two stops BEFORE their destination.

The clown rail company fined them due to the terms of their rail ticket being breached.


As their weight would not have been on the train, the train would have used less electricity and so saved the train company some money.

The clowns seem to think they have a right to loot and pillage their "customers".

Anonymous said...

In previous posts, FSK has said the IRS creates more harm than terrorists.

A United Kingdom mainstream newspaper is now saying something equivalent.

Max Hastings of The Daily Mail says

"I am not much frightened of Al Qaeda, the Taliban or things that go bump in the night. But I am petrified of making a mistake about tax."

The above paragraph is quoted from

Later in the article Max comments that HMRC can't be expected to get tax calculations correct, because the Brown-Blair government ran down the school system and so everyone now has trouble doing simple arithmetic.

Anonymous said...

Use your Hooligans to your advantage and make the companies pay more. Yes, they'll jack up the prices, but then you make them pay more and eventually people can't afford to ride and boycot the company.

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