Oakland City Council proposes 10% ticket surcharge

Desperate to get out of an $80+ million budget hole, Oakland’s City Council is proposing several cost-cutting and revenue-generating proposals which will certainly affect different parts of the populace. This includes eliminating discretionary accounts for the Mayor and City Council, getting contract concessions from OFD, and one major item affecting sports fans: a 10% ticket surcharge on all tickets at the Oakland-Alameda County Coliseum and Oracle Arena.

The surcharge would have to be approved by the Oakland-Alameda County Coliseum Authority, with revenues being split between Alameda County and Oakland, officials said. The city’s take would be $9 million a year, according to council members’ estimates, though some say that is a sunny projection given that a number of tickets for events taking place in the next year have already been sold.

Debt service on the Coliseum alone is $22 million a year, split between the City and County. While the tax wouldn’t cover all of the debt service, it would take a big chunk out of it. Unfortunately, that “sunny projection” matter comes into play. Season tickets and a number of packages have already been sold, so a retroactive tax couldn’t be enacted on those purchases. New packages after whatever the enactment date is could be taxed, and gameday tickets would be hit as well. Let’s throw this into a quick model:

  • Tax is effective halfway through the season (Game 42), leaving 41 games to get the surcharge
  • According to TMR’s Fan Cost Index, the average ticket price is $24.31
  • If there’s a 10% surcharge, the resulting average surcharge would be $2.40
  • With the A’s averaging 17,000+ per game, put aside 10,000 seats as presold seats, with 7,000 remaining as new or gameday purchases
  • 41 games x 7,000 seats x $2.40 = $688,800 in potential revenue.
  • Next year, assuming attendance patterns hold, $1.67 million for 41 games could be raised (41 games x 17,000 seats x $2.40)

$3 million is what an equitable share would be for the A’s considering they are one of three teams at the complex. The combined figures fall over $3.6 million short of projections (assuming the total take is $18 million for both City and County, split among the three teams equally). If the surcharge is going to hurt one team more than the others, it’s the Warriors. Their season just ended and they’ve only started to get season ticket renewals. The Raiders have had the better part of six months to sell its packages. With all three teams struggling between the lines, it’s difficult to see any of them being terribly excited about a tax that could further hamper sales efforts.

Now for the painful part. How would a 10% ticket tax affect ticket prices? (Note: two prices are shown, first for regular prices and second for premium games)

  • MVP: $48/$55 becomes $52.80/57.50
  • Field Infield: $35/$40 becomes $38.50/44
  • Lower Box: $30/$35 becomes $33/$38.50
  • Field Level: $26 becomes $28.60
  • Plaza Club: $40/$45 becomes $44/$49.50
  • Plaza Infield: $30/$35 becomes $33/$38.50
  • Plaza Level: $24 becomes $26.40
  • Plaza Outfield: $18 becomes $19.80
  • Bleachers: $13 becomes $14.30
  • Plaza Reserved: $9 becomes $9.90

The City’s obviously in a really tough spot fiscally. They don’t want to consider such measures since they will no doubt alienate the teams currently playing in Oakland. Honestly, I don’t blame them. The Coliseum debt service matter has never been properly addressed by City and County, and for them to properly address it so that it minimizes impact on residents, something needed to be done. The irony is that in enacting a ticket surcharge, they may push away one or more of the three teams that call Oakland home, right as new stadium proposals are being considered.

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