The Warriors have begun construction on the Chase Center set to open in San Francisco in 2019. Why, many wonder, would Golden State say goodbye to their faithful Oracle Arena, where they have rebuilt the franchise and won two Championships in the process? The truth of the matter is that they stand to make a financial killing in licensing individual reserved seats to rich people.
San Francisco is a more lucrative market than Oakland, and the Warriors are looking to cash in. Warriors are looking to generate around $300 million in personal seat licenses (PSLs). PSLs have been utilized in other leagues such as the NFL, but the licenses are starting to permeate the NBA. This would have a great increase in the revenue the team enjoys and in turn, affects the net worth of the team who utilizes this strategy.
Other NBA teams might follow suit, but does this trend help the fan? In economic terms, one often hears of the franchise’s interests or the player’s interest, but how often does one hear of the fan’s interest? Seldom, if ever.
The only discussion of fan interests in the 2017 season was that of parity. Pundits and writers would talk about whether or not the product was palatable for the common fan. When it came down to it, the fans loved the product that was turned out. The NBA Finals was the most watched since 1998. This was pure theatre and ultimately a way to mask complaints that certain teams had no chance to win the NBA title.
Many fans value the personal seat assignment and are ready to pay top dollar for it. This demand has led to unfortunate consequences in the recent case while the LA Rams were completing their move from St. Louis. One season ticket-holder, Ronald McAllister, sued the franchise for a refund of his season ticket purchase at the price of the new PSL in Los Angeles.
The implications of this trial were set to be great: if the Rams can escape their commitment to their ticket-holders, the fans are liable to lose a lot of money through no fault of their own. The Rams ultimately lost the ruling in court and had to refund all the their St. Louis ticket sales, but the situation turned out to be a fiasco of epic proportions where the Rams tried to rip off their loyal St. Louis fanbase.
It seems that the average NBA fan does not gain much by these licenses. The product is simply another way for teams to profit off the fan without incurring any increasing costs. That being said, it’s a genius business strategy.