Finally, an Investment Worth Making

From the Pittsburgh Post-Gazette:

In the decade since the stadium opened, the personal seat licenses or PSLs fans bought for the right to purchase season tickets have soared in value, offering a far better return on investment than the slumping stock market or even the price of a barrel of oil.

Take, for instance, a fan who bought a license for a seat in an upper level of Heinz Field for $250 in 2001. It now is selling for an average of $4,306, an increase of 1,622.4 percent, based on 2011 sales at STR Marketplace, a website authorized by the Steelers to allow fans to buy and sell seat licenses.

A seat license that went for $500 in an end zone now is selling for an average of $7,486, an increase of 1,397.2 percent. And one that sold in a lower midfield section for $2,700 when the stadium opened now is going for an average of $17,131, a jump of nearly 534.5 percent.

Taken together, the 49,278 seat licenses sold by the Steelers for an average of $1,172 since Heinz Field opened now are selling for $9,802, on average, or an increase of 736.3 percent, based on the sales data.

Granted, this is the Steelers we are talking about, a team whose on-field performance and, therefore, ticket demand has been consistently high for the past decade. Should this be Reason No. 11 to like the Steelers, or should the PSL inflation count against them? Note to young economists: a Google search of “PSL inflation” yields little about football; is PSL inflation an economic indicator worth looking at?

Roger Dooley

Interesting data point. I expect that most sports teams see demand for branded merchandise and tickets as being proportional to their performance in a given season and perhaps the several preceding seasons. Perhaps a long period of good performance has led to the PSL inflation, as I'm sure ticket buyers (like stock and mutual fund buyers) tend to extrapolate past performance into the future, even when doing so isn't sensible.

A more volatile indicator of ticket demand would be average ticket resale prices on sites like eBay, Stubhub, etc. (To get real volatility, stand outside the stadium on game day!) As a long-term investment, PSL pricing might vary less based on short-term performance.

Then again, some perennial poor performers (e.g., Chicago Cubs) seem immune to the performance/demand relationship.

J. Bridges

From an investment standpoint, the Steelers are a rational investment. While I would not select a mutual fund based on the past performance of its stocks, I would select one based on the past performance of its owners and managers in selecting stocks over time and in context. Steelers’ ownership and management is stable and has proven to be more than capable. The Steelers do win most of the time.

But I do not believe I would call Steelers’ season ticket owners investors, nor would not call them rational either. I would call them fans – passionate ones — who expect the team to win more often than not.

So even if the Steelers do not win all the time, the stadium sells out ALL the time — each home game since 1972. Which makes general sense to me.

The one team with a longer sell-out streak than the Steelers is the Washington Redskins. Which makes no sense to me!


The Steelers win more than not, but no matter Steelers sell out home games — every one since 1972.

There is one NFL team with a longer sell-out streak than the Steelers — the Washington Redskins.


paul o.

Though I am a sports fan, I am amazed that taxpayers continue to support building and remodeling professional sports stadiums. It will continue to happen until federal laws are made to stop it.

It just seems to me that instead we should focus on subsidizing nascent industries to jumpstart R&D against worldwide competition.

Instead we opt to subsidize owners and players in a highly profitable mature industry.

Joshua Northey

Yeah the grab for cash in Minnesota right now is really unseemly. The Vikings taking out full page adds in the paper proposing that the "whole stadium" be funded with $300 million in taxes from players income taxes, merch sales, tickets taxes etc.

A) That still leaves taxpayers holding the bag for another $400million (its a $1 billion+ project and the Vikings will only commit $407 million), so not sure how that is the "whole stadium".

B) Those players and fans will still use local and state services, and now they won't be helping pay for them.

C) Apparently the Vikings have convinced the legislature that the substitution effect doesn't exist and that if they leave somehow all the money people spend on football will just disappear instead of being redirected to hunting, bowling, satellite TV, travel, or whatever else.

It is absurd. If you want to hand out $700 million to a business for a new facility I can think of a lot better targets than a football team.


Steve S.

It is ironic that this is happening in Minnesota. Jesse Ventura was an outspoken critic of publicly funded stadium projects.

Joshua Northey

I think it is just simple supply and demand. If there was an open auction of all of them again I doubt they would go for that much, but right now only a few people are giving them up each year and many people want them. A few losing seasons in a row and suddenly supply goes up demand falls, and the price is right back where it started.

Mike B

Surely these sorts of returns going to fans cannot be allowed to stand! There are owners out there that need to buy second and third houses or new private jets. In the future look for teams to replace the PSL's with Personal Seat Fees that have to be paid every time someone wants the right to buy season tickets and can increase along with the demand for said tickets.


What they are likely not taking into account is that the prices charged by the Steelers are significantly lower than the market price for PSLs. The numbers reported more recently tend to be secondary market prices.

This doesn't invalidate the idea that it would be a good investment to buy the PSL from the Steelers in 2001 (in fact, it was a great investment) but it is hardly certain evidence that there has been a 1400 percent increase in demand for them. There are reasons the teams price to sell out their stadiums, such as maximizing profits based on things sold within the stadium, and having a product whose quality depends on others also attending the game.

Also, there's no indication of the inflation adjustment, which while not huge, is non-trivial over a 10 year period.

I'm sure there has been some increased demand for the seats given the Steelers' success, but I'm not convinced it's nearly as high as reported.


Jesus Garcia

The first time I heard about freakonomics is because my girlfriend (she is an economics student) told me about the movie. Then I went ahead and read the book. Now that I've heard almost all the podcasts that are in iTunes to the date, I consider myself a big fan of Freakonomics and you guys (the authors)... I didn't have a favorite, although Dubner's sense of humor was starting to get me...

Now that you have stated that you are a big fan of the pittsburgh steelers... you got me man...

Congratulations on your success... you have earned that...

P.S. I LOVE NFL freakonomics


That's interesting. As a NY Giants season ticket holder, I put out a $1,000 per seat last year, the lowest on the scale. A few sections over it was $2,500, and the next level was $5,000. It is my understanding that many people in the more expensive locations in the old stadium opted for cheaper seats in the new one. The expensive seats of $25,000 (and up) are still empty in the middle of the field.

I would like to think I'd see that appreciation in value, but as the top of the scale seats are empty, I assume that puts a ceiling on how much anyone is going to bid up the more humble ones.


Also, I should add, at @ $100 per seat per game, I definitely thought about just going onto the internet and buying 5 or 6 games per year in a better location. As a season ticketholder you have to purchase two preseason games as well.

One huge attraction to season tix is the ability to buy playoff games or even have a shot at Super Bowl tix. The Steelers have had one losing season in the last 12, which is amazing in the parity-weighted NFL That is a big help to marketing.


How much of that is from the rise is ticket scalping online? The only way that makes economic sense is if you invest in teams when they aren't very good (scalpers have to start somewhere), buy the PSL in a good section, wait for that team to make the playoffs, and pay day. Oh wait thats how scalpers actually do it.


Now all someone needs to do is invent a Collateralized Debt Obligation backed by the PSL to "unlock" all that value!