The Giants are surely feeling the pinch of the economic downturn. They may have miscalculated and overestimated the demand for high priced tickets and expensive PSL charges and did not anticipate the affects of a recession. Of course, you can not blame them for that oversight. The best and the brightest in the financial community did not see this coming and were unprepared for this meltdown which pulled the rug out from under the economy and subtracted so much wealth that had been in people's hands. In fact, not only did the financial geniuses not see it coming - they actually caused it! The Giants job is to draft and pay players and coaches, not analyze the over-leveraging and flawed risk mitigation models of the financial community or understand the fallacy in credit default swaps. So I am not blaming them; nevertheless, there are some affects. Let me elaborate.
I received a letter from the Giants this past Monday which made a somewhat surprising announcement about ticket prices for the new stadium. Instead of summarizing, I will quote directly from the letter:
"... we have decided to reduce the ticket price of the outer two sections in all four Mezzanine Club B corner areas from $400 to $250 per game. The PSL price for these seats will remain $7,500 and ticket holders in those seats will have access to the club areas. A total of 1,570 seats which is roughly 40 percent of the remaining available seats in the new building (but only 1.9% of the total seating capacity) are impacted by this decision and will form the new Mezzanine Club C."
Interesting stuff - the bad news from the Giants perspective is that they have not sold all of the seats. It is rather unexpected and surely in a healthy economy they might be gone by now. I recall when I wanted to buy tickets to the home playoff game in 2005 against Carolina. The Giants put several thousand tickets on sale, open to the general public to buy through Ticketron on a first come first served basis. I was at Ticketron 1 hour before the opening sale time to make sure I was at the front of the line. I bought my tickets 6 minutes after the sale started and the person standing behind me was locked out because the tickets were already sold out. (I wish I had come later and been sold out - Giants lost 23-0.) So it took exactly 6 minutes to sell several thousand playoff tickets whose face value was doubled, because this was a playoff game. You could certainly guess that the chance to buy seasons tickets where you have a permanent seat, would be more urgent among the fans and people would jump at the chance. But, aside from the economy and the PSL, I think the major obstacle to selling these seats was the face value, up at $400, more than was the PSL. A relatively comfortable, upper middle class, white collar worker, can probably rationalize forking over $15K for the PSL on two tickets. Especially if he considers that this $15K is spread out over 20 or 30 years of the expected life of the stadium. But at $400 face value, 2 seats for 10 games, is $8K per year. That is a big investment and a big percentage of your budgeted sports entertainment dollar. $250 is still somewhat expensive, because it comes in at $5K for 2 seats for the season. But it is less than half the total of your PSL charge, which is a psychological barrier than people don't want to cross.
Also important with this reduction to $250 is the creation of a secondary market for tickets. People who pay for seasons tickets don't plan to go to all 10 games that they pay for; not even all 8 regular season games. They pay for the tickets up front, but want to be secure in the knowledge that if they have to get rid of the tickets because they have a business trip or personal obligation, they can easily unload them. With really expensive seats, it is not a slam dunk that they will be able to be sold. Getting rid of tickets on the secondary market requires a relatively large pool of people ready to step up and buy. And that large pool comes when buying tickets to a single game is an easy, snap decision to make - you could almost call it an impulse buy. When tickets are 100 or so and you want to sell them for 150, there are lots of people who will drop 300 on a pair of tickets. That's not much more than what you would spend on dinner at a nice restaurant with your significant other and doesn't require a major budget evaluation. When tickets are $400, a small markup means that the pair of tickets will go for at least $1K, probably closer to $1,250-$1,500 which is a number that people will have to stop and at least think about before they peel 12 or 15 crisp $100 bills out of their wallet. This is something that is going to sit with the Giants as long as the stadium is standing, but at least the Giants have a relatively small number of tickets in this pricey range.
Next post - back to football. I promise.
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