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Sunday, March 15, 2009

Part 7: PSLs through the eyes of Phil Mushnick and Roger Goodell

This morning, Phil Mushnick has taken a seat in the PSL stadium and he does not like the view. Echoing the opinions expressed here on the Ultimatenyg New York Giants football blog, the words are unambiguous.

"..the most disgraceful, greed- based story in NFL history"

"the Giants are.. desperate to find suckers to purchase personal seat licenses"

The latest wrinkle that Mushnick uncovers in this PSL mess is how NFL Commissioner Roger Goodell defends the Jets and Giants seat licenses as 'good investments' while the Jets explicitly say otherwise.

Warren Buffett defines an investment's return as the sum of (the present value of future) retained earnings over the period of the holding. So for PSLs, they are licenses, not shares. When the stadium closes in ~30-35 years (about the length of the current Giants Stadium), it will be worth zero. Check the fine print, I am sure it says that the license is for this new stadium, not a license forever. Add that you have to PAY for all preseason and seasons tickets, and that is the reverse of a dividend. Yes, you get entertainment, but no, the endpoint of the license WILL be zero. And just for the exclamation point, we'll throw in there that in 30-35 years, if you hold the license until it is worthless, you (or your heirs) will be on the queue to pay for another stadium (license) yet to be built.

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