Text Of The PSL Rally

Steve Kern of pslrally.com sent me the text of yesterday’s speech.

Again I scold Jets fans for being too lazy to show up yesterday.   Y’all need to support this guy, and Mets Police applauds Steve for being a leader.

My name is Steve Kern and I am a life long Jets fan and 15 year season ticket holder.

My first year as a season ticket holder was 1993 and the tickets cost me $25 each for my two seats for a total of $400. 

After the 93 season was completed I remember receiving a letter from Leon Hess, then owner of the Jets.  His letter stated that he would not be raising ticket prices until his team showed that they could make the playoffs.

Boy have times changed.

My tickets are now $80.  It is mandatory that I buy the two preseason games. My total invoice for this season is $1600. 

If the Jets prices are the same as the Giants, when the new stadium opens, my game tickets will be increased 50% from $80 to $120.  My invoice for the 2010 season will be $2,400.  The total will have increased 6 times since 1993.

Yes, times have changed.

This brings me to the creation of the Personal Seat License.  The PSL was created as a way for teams to offset the construction costs of their new stadiums.  It is one time lump sum fee for the right to purchase season tickets.

12 teams have issued PSLs to finance their new stadiums since 1993.  The average revenue that each team has generated from their PSL sales has been $75M per team.

The Giants have announced that they will be raising close to $370M from their PSL sales or close to 5 times the average of every other team’s PSLs.

If the Jets plan, which to date has not been announced, replicates the Giants plan, the total revenue generated by the two teams would be $740M or close to 10 times the amount raised to build any one stadium.  If the stated budget for the stadium is correct at $1.6B.  The PSLs will have paid for 46% of the stadium construction cost.

This new stadium will be the most expensive stadium ever built with every other stadium being built for a fraction of the cost.

So how did we get to the point of building a new stadium?

From 2003 to 2005, both teams had plans for the places where their teams would play.  The Giants submitted a proposal to renovate the existing Giants Stadium.  The Jets had plans to build their own home on the West Side of Manhattan.  When the Jets failed to gain approval for their stadium, they decided to stay in New Jersey and began conversations with the Giants.  Why was there a need for a new stadium?  Why couldn’t the Giants and Jets combined to renovate the existing stadium maybe even installing a roof so that the New York area could finally host a Super Bowl?  They could have, but they didn’t.  So in 2006, the two teams decided to build a new stadium valued at $800M.  The costs were to be shared between the two teams with no need for public financing.  They each received loans from the NFL for their construction costs and the construction commenced.  There was no need for PSLs.  From 2006 to 2008, the budget for the new stadium grew from $800M to $1.6B.  How the budget could have doubled in two years is unclear as labor rates did not double and construction material costs did not double in those two years.  But the budget did double in cost and the two teams were faced with a dilemma.  How do we pay for the additional construction cost of $800M?  The solution was to use PSLs to pay for this added cost.  I do not of any other business in the world that could mismanage a budget of a project by $800M and determine that the solution to the problem would be to have their most loyal customers foot the bill.  That is exactly what the two teams are asking their season ticket holders to do.

The Giants have stated that they could not get construction financing from any other source as a reason for the implementation of the PSL policy.  These two large corporations can not get financing for themselves but they have arranged agreements through multiple lending institutions for the season ticket holders to obtain financing for their PSLs.  Why can’t the teams ask those same lending institutions to provide their construction financing?  I’m sure their credit rating is better than yours and mine.

What the Giants fail to mention in their statements is the amount of additional revenue that will be generated from the new stadium.  When I looked at it, I decided to focus on only three differences between the existing and new stadiums.  Naming Rights, Club Ticket Prices, and Luxury Suites.

It has been published that the naming rights alone will generate close to $1.5B in revenue over the next 20 years or over $70M per year.  Bud & MetLife have both signed deals to sponsor 2 of the stadium entrances at $8M per year and the stadium naming rights itself is estimated to be over $40M per year.

When your calculate the cost increase for Club seats in the Coaches Club & 2 Mezzanine areas by the number of tickets by 10 games, the total added annual revenue generated is $35.1M per team or $70.2M total for both teams.

Luxury Suites – The old stadium has 119 Suites.  The new stadium has 217 suites.  The old stadium suites had a maximum annual rental of $350K.  The new stadium’s maximum annual rental amount is $1M.  Using $250K as the average existing rental and $600K as the average new rental.  The total added annual revenue from Luxury Suites is $50M per team or $100M total.

When you add these three revenue streams together they equal a total of $240M per year.  These three items will pay for the entire construction cost of the new stadium in less than 7 years.  Taking all other revenues into account it is not hard to think the stadium could be paid off by the teams in less than 5 years.

Once it is paid off, all of these items become pure profit for the teams for the balance of stadium’s life.

Is there a need for PSLs to be used to fund the construction costs?  The answer is No.

So why are the two teams implementing the PSL Policy?  The answer is simple.  Because they can.  It is not against any existing law.  They have tens of thousands of fans on their season ticket waiting lists just waiting for one of the loyal fans to walk away from tickets that have been in their family for 50 years or more.  Giants fans have supported their team from the Polo Grounds, to the Yale Bowl, to Yankee Stadium, to the existing Giants Stadium.  For the Jets, their fans are from the time of the Titans & Shea Stadium to the present.

Is this the way to repay the fans that are the reason that your teams are each valued at over $1.5B?  I would hope not.

When I first decided to hold this rally, I did it because as a consumer I usually want to get something in return for the money that I spend on a product.  With the PSL there is no added return for being a PSL holder.  I still have to pay for the same game tickets for the same NFL games that I have done for 15 years.  There is no added return.  The argument that is made is that the PSL is an investment and will gain value over time.  As a loyal fan, I do not look on my season tickets as an investment.  I root for my team.  I have rooted for them my entire life.  I have 3 small boys that are all Jets fans.  These tickets will be in my family for the rest of my life and the lives of my children.  True fans live and die with the team.  True fans will not sell their tickets 5 years from now to make a profit.

So I put together a list of alternatives and additions to the PSL Policy, that were listed on my website and I asked for added suggestions from others in order to present them to the teams for their consideration.

1 – Allow the PSL holders to be able to pre purchase tickets to other stadium events one day prior to general public sale.  This would not impact anyone as the cost for these tickets would remain the same and would be a benefit to the PSL holder.  John Mara has stated that this is not possible in that promoters need to set aside certain tickets first.  Let the promoters set aside their tickets then letting the PSL holders have the next opportunity to purchase these tickets.

2 – Install a 5 year freeze on game ticket and parking pass prices.  My tickets will go from $80 to $120 during the first year of the new stadium.  Every year when I receive the season ticket renewal letter in the mail, I think to myself ‘how much extra will it cost me this year’ and every year it is an extra $5 to $10 per ticket.  Commit to not raising ticket prices and parking passes for the first five years.

3 – Go back to the old plan of making the preseason games optional and not mandatory.  Do we really need to pay full price up to $700 per ticket for preseason games where the starters play one quarter and then are removed from the game?  Or compromise, making one preseason game mandatory and the other optional putting the remainder of the tickets up for sale to the general public or donating the tickets to charitable organizations letting under privileged kids see an NFL game that could not otherwise afford it.

I’ve also proposed to completely overhaul the PSL system charging them only on the best seats.  The Giants have raised the prices for their club seats in the new stadium.  Coaches Club seats which are $115 will be raised to $700 per ticket per game.  Mezzanine A & B seats will go to $500 per ticket & $400 per ticket respectively.  What the Giants are saying by raising these tickets to these levels is that these seats are for corporate clients only, in that the regular fan can not afford these prices.  If this is their philosophy, increase the PSL values on these seats.  Charge $100,000 per PSL on the Coaches Club, and $20,000 on the 2 Mezzanine areas.  Add this to the Field One area which is currently at $20,000 and the total amount raised by these PSL sales would be $20M more than the current plan with only 11,247 seats needing PSL or 14% of the new stadium.

So what happens next?  My hope is that the teams will hear all of us here today.  I am videotaping each speaker and the crowd that is here supporting us and will be providing this on DVD to both teams and members of the media.  I will be compiling a complete book for the teams as well detailing all suggested alternatives to the PSL policy and all feed back provided by fans through the website.

I would ask that each of you visit the website at PSLrally.com and forward me all of your suggestions and feed back to be included in my submission.  I plan on keeping the website open until Opening Day at which time I will finalize all the submitted information and forward it to both teams. 

I appreciate each of you spending the time today to make your voices be heard regarding this policy.

Thank you