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5:39 PM Mon, Nov. 12th

Kobritz: Jets fans sue team over personal seat license devaluation

Column: Beyond the Lines

The New York Jets, who have struggled to compete against NFL teams, find themselves in a battle with a group of disgruntled fans. The team is a defendant in a class-action lawsuit brought by James Gengo, a season ticket holder.

Gengo alleges that the team is selling season tickets to purchasers who do not have personal seat licenses, a practice that renders current PSL holders’ licenses “entirely or substantially worthless.” The Jets sold PSL’s to raise money for their portion of the construction cost of MetLife Stadium, which they share with the Giants. PSL’s originally sold for as much as $25,000 in choice seating areas, although Gengo paid only $8,000 for two seats in the mezzanine. But the value of those PSL’s has fallen precipitously, in lock step with the Jets’ record which includes only one winning season in the past seven. According to NorthJersey.com, some areas in the stadium have seen PSL values decline from $25,000 in 2009-10 to $4,500 today.

A personal seat license gives the holder the right to buy season tickets for a particular seat. Most teams allow fans who no longer wish to purchase season tickets to sell their license on the open market, where prices are dependent on the fortunes of the team.

Max Muhleman, a Charlotte, North Carolina sports marketing agent, is credited with inventing the concept of PSL’s. However, his original idea was the complete opposite of what PSL’s quickly became. Muhleman created PSL’s, which he referred to as “Charter Seat Rights,” as a gift to reward those who purchased season tickets to the NBA’s Charlotte Hornets in 1987. When the NFL expanded to Charlotte in the 1990’s, Muhleman used the concept to help finance the cost of the team’s stadium.

Since their inception, PSL’s have found favor in professional and amateur sports. The biggest beneficiary has been the NFL where 19 of the 32 teams have used some version of a PSL. The cost of PSL’s reflects the popularity of the team and its market, with prices ranging from a low of $250 to a high of $225,000 for premium seats in the L.A. Rams’ $2.6 billion stadium currently under construction.

Deadspin.com says PSL’s are a “racket,” a characterization difficult to dispute. They’re a fee teams extort from their fans for the mere “privilege” of spending additional money to purchase season tickets. Fans are forced to choose between paying the exorbitant fee or risk being frozen out of the stadium. That, says Muhleman today, leaves fans feeling “more like customers, which erodes their loyalty and, perhaps (in the long run), the franchise’s profitability.”

Jets’ fans who hold onto their PSL’s could see their value rebound, although that scenario seems unlikely until the team acquires an NFL-caliber quarterback. Gengo has apparently given up hope that day will come. He is seeking a refund of the cost of the PSL’s, in addition to interest and attorneys’ fees. If more fans elect to join him, it could be a sign that the PSL money grab may have run its course.

Jordan Kobritz is a former attorney, CPA, Minor League Baseball team owner and current investor in MiLB teams. He is a professor in and chair of the Sport Management Department at SUNY Cortland and maintains the blog, sportsbeyondthelines.com. The opinions in this column are the author’s. Kobritz can be reached at jordan.kobritz@cortland.edu.