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Seat License Anger at Most-Expensive Stadium Pressures Giants, Jets to Win
New York’s Giants and Jets might be feeling even more pressure to succeed as they begin their first seasons in the world’s most expensive stadium.
The teams open play in a $1.6 billion building financed in part by the sale of personal seat licenses, one-time fees that give fans the right to buy season tickets. They were the first professional teams in the New York area to sell such licenses, which exceeded $20,000 for prime midfield seats at the stadium in East Rutherford, New Jersey.
For both National Football League clubs, on-field success might soothe lingering fan animosity over the licenses and increased ticket prices, while also helping sell naming rights for the venue, now known as New Meadowlands Stadium.
“Winning is going to go a very long way to taking the attention from the high-profile issues off the field over the last year, including naming rights and ticket pricing,” David Carter, executive director of the Los Angeles-based Sports Business Group, said in a telephone interview. “The more quickly the buzz can be that they’re off to good starts and they’re delivering a great game-day experience, the better.”
The Jets and Giants are considered by Las Vegas oddsmakers to be among the top NFL title contenders this season, which kicked off last night when the Super Bowl-champion New Orleans Saints beat the Minnesota Vikings 14-9.
The Indianapolis Colts are the 13-2 favorites to win the Super Bowl, followed by the Saints and Dallas Cowboys at 8-1. The Jets are eighth among 32 teams with 12-1 odds after losing in their conference championship game last season.
Ryan’s ‘Crystal Ball’
“In my crystal ball, I’m seeing a Super Bowl trophy,” Jets coach Rex Ryan said during training camp, when the team was featured on HBO’s “Hard Knocks” program. “We’ll see what happens. I’m not embarrassed to say that I believe it will happen. We get to prove it, that’s the beauty of it.”
The Jets open the season at home on Sept. 13 against the Baltimore Ravens. The Giants, who are three years removed from winning the Super Bowl, have 15-1 odds and start their season the previous day -- also at home -- against the Carolina Panthers.
“For the first time in a while, I look at the Giants and go, ‘I think they’re good,’” former Giants quarterback and current CBS NFL analyst Phil Simms said in an interview. “But if it’s not a good year, it makes me wonder, ‘Uh oh, what’s going to happen?’”
The Jets and Giants each borrowed $650 million to help finance construction of their shared 82,500-seat stadium. They decided to sell personal seat licenses as a “last resort,” Giants co-owner John Mara, 55, said in 2008.
Cost Doubles
The final cost was more than double the initial $750 million estimate, according to Barry B. LePatner, a New York- based construction cost management specialist and the founder of LePatner & Associates LLP. The author of the book “Broken Buildings, Busted Budgets: How to Fix America’s Trillion-Dollar Construction Industry” said it’s common that initial estimates for major projects such as stadiums are low and that the final cost raises 50 percent or more.
“Construction managers bid at or below cost and then drive the price up during the course of the project,” LePatner said in a telephone interview. “The net result is you either pay the additional cost or you don’t get your job finished.”
There was immediate backlash from fans when the license plan was announced, as many who held the same seats for years were displaced.
Relocation, Relocation
“Any time you relocate people -- there were people who had really good seats for years and years -- you alienate part of the market,” said William Sutton, a professor in the DeVos Sport Business Management Graduate Program at the University of Central Florida.
While the price of licenses for some front-row seats near midfield was bid as high as $200,000 in online auctions, both teams struggled to sell all of their seat allotments.
The Jets cut the cost of 18,000 seat licenses by as much as 50 percent in June, and the Giants said last month they’d sell some regular-season tickets to non-license holders. Even so, the added cost of seeing the Jets’ and Giants’ games this year has some fans expecting a correlation to on-field success.
“With what we had to pay for tickets and PSLs, you’re darn right we expect them to be good,” said Jets fan Larry Swalling of Long Branch, New Jersey. “Expectations are pretty high and the organization itself played a big part in that.”
Swalling spoke as the Giants beat the Jets 31-16 in a preseason game on Aug. 16, the first football game at the new stadium. Giants Stadium next door, where the team had played through last season, has been demolished.
Venue Appeal
Winning might also help the teams get a naming-rights deal for a stadium that’s located about 12 miles west of Manhattan and has been selected to host the 2014 Super Bowl.
Carter, of the Sports Business Group, said the corporate sponsorship market at the highest levels “continues to thaw,” as evidenced by JPMorgan Chase & Co.’s agreement this week with Madison Square Garden in New York. That deal, which doesn’t include naming rights, is valued at $300 million over 10 years, according to SportsBusiness Journal, the richest annual sponsorship agreement for any venue.
“If you were to go down and score the stadium as if you were scoring a loan if you were a banker, every box would be checked,” Carter said, citing the venue’s location, premiere events, ability to entertain corporations and the teams’ large and demographically appealing fan bases.
Having two successful teams in its kickoff season would not only help pacify those fans rankled by the seat licenses, it might also make the stadium that much more attractive to potential business partners.
“Let’s face it, the pressure is always immense in New York and anything the team can do to diffuse it is very important,” Carter said. “At this point, that means getting off to a good start.”
To contact the reporter on this story: Erik Matuszewski in New York at matuszewski@bloomberg.net
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