According to Team Marketing Report’s NFL Fan Cost Index for 2011, the San Francisco 49ers had, on average, the 9th highest priced tickets in the league at $83.54. That price was a 9.4% rise over 2010. Given the facts that the team was in the bottom 10 in terms of payroll, and the 49ers play in one of the more decrepit stadiums in the NFL, that’s a bit of a shock. But that’s nothing compared to longtime season ticket holders experiencing sticker shock when they found out how much their locations would cost in the new Santa Clara Stadium.
The 49ers have been preparing for the blowback for a while. It’s happened everywhere else seat licenses have been offered: Dallas, New York, and yes, Oakland. Priced at up to $80k per seat for the premier 50-yard line lower club locations, it’s clear that these seats aren’t for the guy who makes less than $80k per year. These seats are for the corporate crowd. Will they sell? Of course they’ll sell, just as suites are selling. Even so, don’t worry about whether they sell or not – the NFL doesn’t count club seats against its minimum ticket sales requirements for games.
I’ll put the stadium financing dilemma in the most basic terms. Let’s say you’re buying a $1 million house. You have 15% down, or $150k. You need a loan of $850k over 30 years. Your credit isn’t the best, so your interest rate is 8.5%. That puts your monthly mortgage payment at more than $6,000. Every month. Now add three zeroes to that payment and convert it into an annual payment. That’s more than $72 million per year.
Now let’s take the attendance the 49ers can expect every season. The Santa Clara stadium will have a capacity of 68,500. They’ll play eight regular season games and two preseason games, or 9+1 if the league ever gets around to moving to an 18-game regular season. That means that every year the team needs to 685,000 tickets to pay for that $72 million mortgage. Broken down per ticket, that’s $106.42 baked into the cost of every ticket. That’s 27.4% higher than the entire current ticket price.
Of course, the 49ers won’t be adding $106.42 to each ticket to cover the cost of the stadium. They’ll make it a more progressive payoff. The premium seats and suites will carry much of the burden. Sponsorships, naming rights, pouring rights, and other revenue sources will cover a piece. When I wrote an analysis in 2009 trying to suss out how the place would be paid for, the financing was fairly well separated, the public burden lower ($330 million then vs. $850 million now). Perhaps fans in some of the cheaper sections will only be stuck with $15-20 per ticket of stadium building costs. The truly interesting part hasn’t begun yet, as the team hasn’t announced prices for its lesser club and non-club seats, many of which will also have seat licenses attached. If those don’t sell, we may see a return of the dreaded OFMA. Of course, the Giants sold their seat licenses without much difficulty and a secondary market even thrived for a long period, so there are success stories to be found.
I still remain skeptical as to how to everything will be paid for, at least by the 49ers themselves. Having the Raiders onboard would help an enormous amount. Yet even if the Raiders had signed on at the outset, it’s unlikely that the 49ers’ seat license prices would be much different. They’d probably just pay down the debt earlier or plow the money into the team at different points. Without the Raiders, I wonder if it’s more sensible to have a domed stadium in Santa Clara despite the good weather. At least with a dome, it’s a more flexible venue that can hold all sorts of other events, including multiple Super Bowls and the NCAA Final Four. Then again, the Marion County (Indianapolis) Capital Improvement Board is expected to lose money at this year’s Super Bowl. Nevermind on the dome idea.
Should the Raiders and Niners share digs in Santa Clara, it’ll be interesting to see how each team goes about identifying themselves. In other words, if one team added a “of Santa Clara” to their name, it’d look funny if the other team didn’t… or did (thinking about it).
@ML The link to the Fan Cost Index seems to be broken.
Is the $83.54 figure ticket cost alone, or FCI? The FCI figures are of little value, as they do not reflect actual fan purchasing behavior.
@bartleby – Ticket price only. Link fixed.
If the team somehow comes back to earth and is mediocre/struggles, could this be the dawn of 49er blackouts? Those prices are insane. I couldn’t imagine taking one’s family to a ballgame at those costs.
@eb The article focuses on premium seating for the sake of a story. Those prices are not representative of what overall prices will be. There will be plenty of seating available at prices within reach of at least middle class families, they just won’t be great seats. Premium seating is not intended for regular people; it’s intended for corporate customers and high-rollers.
However, the premium seat pricing and ML’s analysis illustrate vividly why a new ballpark is simply not feasible in Oakland, regardless of site. If you’re not going to use public money, the park must be paid for somehow. If you amortized the cost equally across all tickets, then people really would be priced out (and not just bitching about having to buy worse seats). So the answer is pricing similar to what the airlines use: The First Class passengers subsidize the trip for the rest of us.
The Niners will have less trouble selling out a new stadium at those prices than they currently have selling out a dump at cheap prices. Just as the Raiders and A’s struggle to sell tickets despite cheap prices. There are plenty of people in the Bay Area who can afford pricey tickets, but it’s tough to get people out to a shitty stadium even if you let them in for a song.
I will say, the TMR data strikingly validates what I’ve been saying about the non-market for premium seating in Oakland. The Raiders average club seat price ($139) is dead last in the NFL, and they still can’t sell out the club. Over 2/3 of the other teams average prices over $200 – some breathtakingly so (Patriots at $566 – average!). Even the Chargers, who play in a similar crappy stadium, average $170.
The whiny STH’s that got undervalued 50-yard line tickets for decades (remember, the 49ers had the same price for every ticket in the house until 5 years ago or so) crack me up. Boo hoo now we have to get stuck with front row seats on the 30 instead of the 50. Waaah, upper deck seats are awful. Better to have had good fortune to have access to such seats for so cheap and not have it anymore than to never have had it at all. Plus I’m sure when those folks didn’t or couldn’t go they were selling those seats for face value, right?
There was some minor sniveling when the Raiders redid their pricing structure in ’06 (they cheapened Mt. Davis tickets and made the lower deck more expensive, albeit not as expensive as if they had tried to sell PSL’s again) but by and large it was pretty muted. The Raiders’ structure by and large makes sense now relative to demand for the specific sections (although the $26 seats always sell out first so perhaps those could be raised).
I think they would buy the unsold tickets rather than have a blackout (like they’ve been doing) within reason. A few thousand crappy seats or overpriced licenses won’t be a deterrent, plus you can always sell those tickets single game despite the fact that it would piss off the PSL holders. Now if it’s 20,000 unsold seats, that’s a different issue. But look at what happened in NY, especially with the Jets. The PSL’s didn’t all sell, so they discounted them, and then sold the seats on a single game basis. The stadium seems to have been filled.
Bartleby, the Chargers don’t sell out their club most of the time either. In fact, I would wager that there are quite a few teams that don’t, and although I haven’t heard of teams papering the club level, I would guess that it or something similar probably happens (every STH gets to buy tickets for a reasonable price once a year or something like that).
@Brian It may be that other teams don’t always sell out their club levels. However, my impression is that for other teams club section sales tend to track with general seating sales.
In other words, if an NFL team is perpetually sold out and has a waitlist for season tickets, its club sections are typically sold out, too. If the team is struggling with blackouts (e.g. Cincinnati, St. Louis, Tampa Bay), the club seats are not sold out either, but the proportion of empty seats in the club section is comparable to that in general seating sections.
Based on what you see on TV, the Raiders are somewhat unique in consistently having the club section half empty for games where the rest of the stadium sells out. Together with the fact that Raiders club seats are cheapest in the NFL, comparable to the cost of good regular seats in many other NFL stadiums, this tells me that the premium seat market is minimal in Oakland. And considering the relative absence of the target customer in the East Bay, this is not terribly surprising.
As far as papering the club section, I don’t know specifically what other teams do, but I doubt they discount those seats. That would dilute the perceived value of what is supposed to be a premium product. You start doing that, and people start realizing they’re just regular seats, with minimal additional amenities, and nowhere near worth the enormous premiums they command. Teams would be more likely to give tickets away free to VIPs and sponsors – it would devalue the brand less.
More likely, I suspect they may generate club seat sales by allowing existing club/PSL holders to buy additional tickets in the club without paying additional club or PSL fees. (Remember, most teams only sell club seats on a full-season or multi-season basis, and often subject to hefty PSL fees or club dues). This is what the Raiders did back before they allowed club seats to be sold to the public on an individual ticket basis.
The Bay Area is one of the wealthiest regions in the US and a lot of “wine and cheese” people are huge 49ers fans in this market.
The 49ers can succeed on their own without the Raiders simply because their fans have the $$ to pay premium prices of SBLs and premium seating.
49ers fans have been waiting for years for a new stadium to spend their dime on. Not to mention with the team a Super Bowl contender for years to come it will make it even that much easier to sell everything.
Raiders fans do not have the same $$ hence building privately without a public subsidy is near impossible but not for the 49ers. That is why I say they move in with the 49ers eventually when all other options have failed.
LA is a pipe dream that will never happen but they need to go down that road so they know they exhausted all options for a new stadium.
Dallas and NYG sold their PSLs with little issues to say the 49ers are not in the same boat or in a better position that those 2 teams is incorrect.
The 2009 analysis ML did was not even close to reality as we can all see today. The public is not on the hook for 850M it is the NFL and the 49ers who are.
Naming rights, SBLs, sponsorships, season tickets, concessions etc….every revenue generating function now goes towards paying the 850M dollar loan.
Before Santa Clara and the 49ers had their own pieces and each could keep excess. Now they have pooled it into one debt with everything being used to pay it down but the debt service difference falls on the team itself………that is good business all around.
Hence why the City and team agreed to this. The 49ers felt in my opinion naming rights and SBLs would net far more than 330M and Santa Clara would make a ton of $$ of it with the excess.
Now all of that excess goes straight to the debt and 49ers seeing that agreed to protect the City’s General Fund by taking the risk.
Otherwise if by some miracle Santa Clara fell short on their 330M the rest would have come from the General Fund…..Now you can take the key to it and throw it away.
@Sid – Who is ultimately responsible for the $850 million in stadium loans? The Stadium Authority, which is an extension of the City. All of the legalese and promises in the DDA only obfuscates that.
@Sid Why do you constantly maintain that your average Raider fans are somehow lower wage earners than your average 49er fan? It’s actually a pretty insulting suggestion.
@eb: Good point, I’d be insulted too. Maybe just based on Raiders ticket prices.
@eb I just did a Google search on per capita income, and while I’m not familiar with the web site or it’s sources of information, this list does reflect S.F. as higher than Oakland. http://www.localdatabase.com/top-lists/income/highest_percapita/ This one, while dated and by county, also shows S.F. being higher. http://en.wikipedia.org/wiki/California_locations_by_per_capita_income This more current list of highest median income (from 2009) ranks Santa Clara County as #22. S.F. and Alameda counties aren’t on it. http://en.wikipedia.org/wiki/List_of_highest-income_counties_in_the_United_States
Yeah if we are talking about the 49er move to Santa Clara vs. the Raiders privately funding a stadium in Oakland, dan might have a point. I found this little gem in Wikipedia under San Jose, which would become the largest source of 49er fans at some point: “According to a 2007 estimate, the median income for a household in the city (San Jose) was the highest in the U.S. for any city with more than a quarter million residents with $76,963 annually.” Oakland is around $48K. I don’t know if that makes it impossible for the Raiders to fund privately or not in Oakland, that remains to be proven in my mind. It will be more difficult that’s for sure, especially with the lack of corporate sponsorship there. All things considered, and I admit that I don’t know enough about the LA situation to comment, Santa Clara would seem to be the push button solution for the Raiders and would double the funds the NFL is kicking in for the new stadium.
@Dan Raider fans are from all throughout the Bay, California and the country. The Raiders have one of the largest followings of any NFL team. Heck, isn’t like 20% or higher of the walk up crowds from San Jose? Comparing Oakland vs SF economically doesn’t measure the fan bases. Aren’t the majority of 49er season ticket holders from outside SF, anyway?
@eb While what you’re saying is true up to a point, it seems a fair assumption that the Niners draw a higher proportion of fans from SF and the peninsula, while the Raiders draw a higher proportion from the East Bay.
The ways of the world. This is why i always make sure I get to a Raider/A’s game when I’m back in the Bay. Overall some of the cheapest entertainment in town. I could care less about the aging, decrepit Coliseum or the lack of fine dining options, or how it looks on TV. Being there at field level for under $100 a pop is a great way to spend the day.
I don’t think i’ll ever value tickets enough to drop an entire years (median income in San Jose) salary just for the rights to purchase tickets to the Pantheon. The NFL and their teams make plenty of money, and with the thrust of television rights fees jumping through the roof, the 49ers will be making money hand over fist soon enough no matter how they cry about how expensive the stadium is.
I love football, just not enough to throw every dollar i earn after it. I’d rather invest that money in stocks, savings, or buy some real estate – you know, real estate larger than 17-inches by 18-inches.
I get it, they’re in business to make money, and I’m all for that. Just as a customer, i’ve got a limit to the value I place on their product. I’m also against states/counties paying for an entire stadium and accepting all the debt. I don’t mind some form of subsidy, like with the A’s to San Jose stuff to have skin in the game, I just hope publicly funded stadiums are over.
@eb obviously fans of respective teams also live outside of the teams’ cities. just trying to provide some very general information (for the sake of perspective) in response to the generalization you made about raiders fans possibly having a lower average income than 49 fans.
@bartleby That is a fair assumption, however, let me ask you this: Do you think that the discrepancy in salary between an average Raider/49er fan is so great that one group can spend freely, while another is financially hamstrung? Sid isn’t talking about large corporations buying tickets, he’s saying “Raider fans” and “49er fans.” Making broad generalizations about two large, diverse groups of people, one positive, one derogatory, seems like treading a slippery slope.
@dan “…in response to the generalization you made about raiders fans possibly having a lower average income than 49 fans.”
I made no such generalization. I do understand the point you were trying to make, however.
What’s the per capita income for Frisco proper? I confess ignorance regarding barista incomes.
Only about 5% of 49er season ticketholders have Frisco addresses. Hence, there’s little grief over them leaving because very few people in that town go to the games anyway…
San Francisco ranks third of American cities in median household income with a 2007 value of $65,519. But, as pjk pointed out, it’s really a non issue with the 5% figure. No wonder there was a lot less drama over the 49ers leaving versus the A’s in Oakland.
What I’m curious about with the FCI is what pricing structure was used. The 49ers used the dreaded “dynamic pricing” on their tickets this year (even through ticketmaster, the Cowboys and Steelers tickets were way more than the rest). Did they average these, or just use the STH rate? The Raiders didn’t vary their prices, but 2-for-1’ed a lot of their tickets, which I guess is the same concept done backwards.
Looks like their stadium moved a little closer to being real today.
NFL has granted them 200 million dollars to put toward the stadium which is the final component to the funding puzzle.
“Dallas and NYG sold their PSLs with little issues to say the 49ers are not in the same boat or in a better position that those 2 teams is incorrect.”
This is inaccurate–the NYG still have club PSLs available–hundreds at last count. They sell lots of their $400-$500 club seats to single game buyers (no PSL required!); and for some games dumped them in the aftermarket at a discount, undercutting season ticket purchasers by half.
The Cowboys also have PSLs available direct from the team, both in club and non-club areas. (Not to mention hundreds more in the aftermarket.)
Neither team sold out of their PSLs “with little issues.” Whether or not the 49ers will depends on how they price the rest of the house.
bottom line, jed york is a butthole for this. he is the WORST owner in the bay area. i knew this would happen. the 49ers game experience will be awful at the new stadium when its filled with CEO’s and presidents who dont give a shit about the game. the raiders already have the better game experience but it will soar even higher once the niners get their new stadium. time for poor 49ers fans (most of the fanbase) to switch to the raiders NOW