Personal Seat Licensing (PSL) is a controversial topic, and now the Golden State Warriors have just waded into the fray.
By becoming the second NBA team to ever offer such a program, the Warriors will potentially make as much as $300 million dollars for the team’s upcoming “self-financed” arena. Why the quotes?
As per ESPN (via Adam Lauridsen) half of the tickets will come with a per-seat cost of $15,000 or less. The other half would cost more than that, obviously. That’s a pretty hefty chunk of change for the privilege of being allowed to buy a seat at a basketball game. Although the Warriors have included some programs such as price control during resale, and payment plan options, it doesn’t change the fact that the wealthy Warriors organization essentially just took out a $300 million dollar, interest-free, tax-free loan from fans.
For comparison, they just got a lot of praise for going into the luxury tax this season, a move that would cost the ownership about $36 million next year. I’m not a season ticket holder, but this doesn’t sit well with me — as Niners fans can tell you, there’s no guarantee that those PSLs will be worth anywhere near that amount if the team starts to get bad.
It’s a game of supply and demand though and, right now, the Warriors are in the driver’s seat.
As they repeatedly remind us during every locally televised game, the Warriors currently have over forty thousand people signed up for season tickets - each having ponied up a one-time fee of $100 dollars. I’m no math whiz, but I can’t help but notice that’s a cool $4 million or so. Sure, it goes towards the purchase if you ever get in, but again, there’s a pretty nice chunk of money that is lent to the team essentially as an interest-free loan.
Just in case there was any doubt that this is a supply and demand issue, the organization also indicated that the number of season tickets will be decreased in the move — from 14,500 in Oracle to 12,000 at the not-yet constructed Chase Center (also known as the Curry Bowl, if the world has any sense of fairness). In the initial news announcement, Lauridsen broke the news while tangentially referencing that the Warriors are “privately financing the arena and also have several player salary and luxury tax concerns.” So, it’s not hard to understand the rationale.
But you know what grinds my gears? It’s the same reason that Lacob got booed all those years ago. No, it’s not that he traded a fan favorite, it’s that Lacob (and the Warriors organization in general) may not have been entirely forthright in disclosing their plans all along.
Back in 2012, Joe Lacob hemmed and hawed a bit before unequivocally saying that they weren’t planning on doing PSLs:
Ok, I’m obviously not going to do anything immature here like coughing into my hand while saying something insulting under my breath...but let’s just say that it’s pretty unlikely that the Warriors did not have PSLs included in their initial financing plan. It’s too rich of a strings-free source, and given the team’s success these days, it was pretty much a given that this was coming.
Sorry, but I don’t buy it that this wasn’t part of the plan from the get-go. I didn’t buy it then, and seeing it rolled out now makes me mad. You’re telling me that this organization - the one that’s “lightyears ahead” - didn’t have this move planned out since the beginning of the project? They touted this arena as being self-financed all along, but I am extremely skeptical that this wasn’t part of the initial financial plan.
Just like they said they were not trading Ellis.
Just like the said they were considering a new arena in Oakland.
$300 million? Tax-free and interest-free? You bet they’ll take that money. And they’ve had their eye on it since they decided to build the stadium in San Francisco.
But still, I guess it could be worse:
GSW announces PSLs for Chase Center. No #s yet. Fully refundable after 30 yrs, transferable. Installment payments ok. Not bad, dep on $$.— Eric Apricot (@EricApricot) July 19, 2017
As Apricot notes, the money does get refunded, so it’s not a totally sunk cost. And it was nice of them to offer payment plans and some resale insurance - you can sell your PSLs back to the Warriors at any time and get all your money back, sell them on the open market, or transfer them to a family member.
That is...you can do all those things after we give the Warriors $300 million or so without taxes or interest.