Field of Schemes new post 49ers PSL purchasers may be buying high

Mike Rosenberg of the San Jose Mercury News runs down the likelihood that seat licenses for the new San Francisco 49ers stadium will increase in value, and concludes that at the prices the team is setting, they don't look like a great speculative investment:

A review by this newspaper of other NFL teams shows that Pittsburgh Steelers fans, for example, have resold their seat licenses for up to 17 times what they paid originally by taking advantage of low initial prices and their teams' success on the field. But even buyers in big markets with die-hard fan bases like the Dallas Cowboys have lost more than $10,000 per seat after paying too much at the start and selling during losing streaks.

Those who buy high-priced seats in the Santa Clara stadium now, at the peak of Niners fever, may wind up like investors who last month bought stock in the super-hyped Facebook IPO, before shares famously plummeted.

"I think they're going to have a tough time making an easy buck buying when the market is high," said Greg Carl, managing partner with PSL Source, a North Carolina firm that brokers seat license sales. "I would not anticipate it shooting up out of the gate."

The problem here, such as it is, is that the 49ers have looked around at what other teams are charging for PSLs — and what fans of teams like the Steelers are getting on the resale market — and set prices accordingly high, which means anyone looking for a bargain isn't likely to get one. If the team does well, PSL values could rise; if it does poorly, as the Cowboys have, then buyers will be lucky to recoup their investment.

Keep in mind, though, that none of this necessarily means problems for the 49ers, or for Santa Clara taxpayers who are counting on those PSL sales to help pay off their share of stadium costs: Once the seat licenses are sold, the team and city have the cash, and it's then the problem of the people who've bought them whether values rise or not. And, of course, speculative value is only part of the reason for buying PSLs — you also get the right to buy tickets, which is why most people are going to be plunking down five-figure fees for these things. The only risk is if prospective PSL buyers read the Merc News and think, "Enh, if these things won't hold their value, I'll just skip getting tickets entirely." Given how they're selling so far, that doesn't seem too likely, but you never know how things will go once the initial rush of sales wears off.

from Field of Schemes http://www.fieldofschemes.com/news/archives/2012/06/4984_49ers_psl_purch.html