The Broncos’ plan for their next home is set. The conversation now turns to how exactly the organization will pay for it.
In announcing Burnham Yard as the preferred site for a new stadium last week, the Walton-Penner Family Ownership Group made it clear the mixed-use development would be privately financed, with “no new taxes” required. But with no detailed financing plan available, there are multiple levers the owners can pull to avoid footing the entire multi-billion-dollar bill for a new mixed-use stadium district.
One likely option for the Broncos is the sale of personal seat licenses (PSLs) — a one-time fee paid by season-ticket holders for the right to buy specific seats. The Broncos have yet to decide whether to use PSLs to help cover stadium costs, the team said. But the franchise did ask in a survey two years ago whether season-ticket holders were familiar with the concept of PSLs.
For fans who aren’t, here’s an explainer on how PSLs are used and how much revenue the licenses could generate toward a new Broncos development at Burnham Yard.
What are PSLs?
In essence, personal seat licenses require season-ticket holders to pay a one-time fee to secure the right to buy season tickets at a particular location. It’s like a reservation, except if that reservation came with a cost.
Once secured, a PSL grants ownership rights to a specific seat or set of seats in a stadium. The mechanism also gives the owner the ability to sell seats off or gift them. The Baltimore Ravens, for example, define this as a “contractual agreement.” Again, it’s a one-off purchase in addition to normal season-ticket fees — not an annual fee.
“If it’s done right and there’s enough interest in the tickets and the team, it’s like an asset,” said Irwin Kishner, a co-chair of New York firm Herrick Feinstein’s Sports Law Group.
How were PSLs created, and how long have they been around?
Unclear. But they’re fairly new. J.C. Bradbury, a professor of economics at Kennesaw State University who’s studied stadium financing for decades, pinpoints the Miami Dolphins’ Hard Rock Stadium, which first opened in 1987 as a privately-funded venture. Late Dolphins founder Joe Robbie couldn’t secure public funding, as Bradbury explained, so he sold off club suites as part of an advanced season-ticket sale.
How widely are PSLs used?
The Broncos don’t sell PSLs at Empower Field. But according to a scan from The Denver Post, 21 out of 32 NFL teams currently utilize some sort of PSL plan under various names: there’s an SSL (stadium seat license), an SBL (stadium builder license) and more.
PSLs are much more prevalent in the NFL than in other leagues like the NBA or MLB. This is due in part to the popularity of season-ticket packages in the NFL — a league that plays substantially fewer games.
Most significantly, nearly every franchise that’s constructed a stadium fairly recently has implemented PSLs. The Falcons, who opened Mercedes-Benz Stadium in 2017, use them. The Raiders, who built Allegiant Stadium in 2020 with substantial public support, use them. The Bills and Commanders, who are both in varying stages of constructing new stadiums, are using them.
What are PSLs used for?
According to Bradbury, PSLs are largely used by organizations to fund stadium costs. If a franchise keeps a PSL program going after a stadium’s paid off, it can be an additional source of revenue. But they’re primarily put “toward construction,” as Kishner said.
“Personal seat licenses are merely a financing mechanism,” Kishner said. “All it means is, depending on where you’re sitting in the building, if you want the best seats, you’ve got to buy a license that enables you to buy the seats.”
So, are PSLs a form of public financing? Or private?
PSLs allow private entities to raise funds for a private asset (a stadium) through external funding. But those contributing to that asset are the franchise’s direct consumer base. In other words, if the Broncos implemented PSLs, they wouldn’t be forcing the general taxpayer to contribute funds. Instead, Broncos fans would be pouring money directly into the cost of a new stadium.
“They’re great from a public financing standpoint, because the cost is borne by attendees,” said CU Denver professor and property tax expert Geoffrey Propheter. “And if all facilities were financed by PSLs and ticket taxes, critics of public finance and subsidies would have very little in the way to complain about.
“So generally speaking … as much of those costs you can pass on to users of the facility, the better, right?”
How much revenue can PSLs generate?
A lot, actually. According to a story from The Buffalo News published in late August, the Bills’ PSL program for $2.1 billion New Highmark Stadium had generated over $207 million in revenue with over 20,000 seats in the stadium left to sell. Price points are all over the map. The lowest upper-level PSL at New Highmark Stadium went for about $1,000 this summer, while club seats climbed up to $50,000.
The Broncos currently have 22,000 season-ticket holders, with over 100,000 more on a waitlist, according to the team. That’s a sizeable consumer base for PSL revenue, regardless of how many high-cost club suites the team plans to construct at Burnham.
Why would Broncos implement PSLs at a new stadium at Burnham Yard?
“The thing that I always point out — just like economists always say there’s no such thing as a free lunch,” Bradbury mused, “there’s no such thing as a free stadium.”
Like any business owner, the Walton-Penner group will not channel multiple billions of dollars into a new venue without exploring other avenues for assistance. Owner Greg Penner himself told The Denver Post that the project will be “privately funded, with some support from the city and state around improvements.”
The Broncos have shown interest in pursuing tax-increment financing through urban renewal at Burnham Yard, a process that would borrow from future projected tax revenues on the stadium site to pay for infrastructure costs on the front end. That’d be a method of public subsidy without directly raising taxes. The most obvious private method would be PSLs.
The licenses come with marketing risks, of course, in essentially forcing season-ticket diehards to help foot the cost of a new home. But it’s a way to privately fund stadiums without ownership actually pulling the full bill from their own pockets.
“Almost every new stadium,” Bradbury said, “comes with PSLs.”
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