Super Bowl XXXVIII - Panthers vs. Patriots

January 29, 2004

Marketing Game

Panthers' financial prowess was evident before its on-the-field success

THE ASSOCIATED PRESS

CHARLOTTE

It's taken nearly 10 years for the Carolina Panthers to reach the Super Bowl, but the NFL franchise has long been a champion in the realm of sports business as the pioneer of the permanent seat license.

One needs to look no further than Houston's state-of-the-art Reliant Stadium - where the Panthers will play the New England Patriots in Sunday's Super Bowl - for evidence of the Panthers' effect.

Opened in 2002 at a cost of $449 million, the 69,500-seat stadium is the latest in a string of NFL palaces to be financed through the sale of PSLs.

Seat-license plans vary from project to project, but the basic idea is that fans pay a one-time fee of anywhere from hundreds to thousands of dollars. In return, they receive the permanent license to seats in a new stadium and the right to buy season tickets each year.

Seat licenses, the early-1990s brainchild of Max Muhleman, a Charlotte sports marketer, are both loved and hated. Critics don't like that PSLs require fans to shell out for the right to buy already-expensive NFL tickets. But the fees have been lauded as a volunteer tax that is paid by people who will actually use a stadium, instead of the general taxpayer.

There's no argument that it has been a lucrative and efficient way for sports franchises to raise money.

"We're closing on raising a billion dollars in fees for new facilities since we first did this in Charlotte," Muhleman said.

Indeed, the Panthers' Super Bowl march has been a PSL parade. After beating Dallas on their home field in the first round of the playoffs, the Panthers pulled out road victories in PSL-financed stadiums in St. Louis and Philadelphia to earn their trip to Houston.

The spread of PSLs is not limited to football. Baseball's San Francisco Giants sold seat licenses to raise money for their new, privately financed stadium, which opened in 2000.

Ten years ago, a stadium-financing plan was the missing ingredient in Panthers owner Jerry Richardson's vision of bringing NFL football to the Carolinas.

"A lot of people don't realize that Charlotte was desperate," Muhleman said. "Jerry wanted to finance the stadium privately, but the (expansion fee) went so high for the franchise that the league asked him to find another way to build it."

Muhleman came up with the concept of the PSL, asking fans to fork over from $600 to $5,400 for the right to buy season tickets once the Panthers moved into their stadium for the 1996 season.

His idea was a hybrid of well-tested campaigns used by large universities and other professional teams.

"In the 1960s, the Dallas Cowboys required season-ticket holders to post a $2,000 bond to buy two seats to help build a stadium," Muhleman said. "And for many years, college-football teams have required season-ticket holders to make an annual donation."

But this was different.

Unlike the Texas bonds, PSL owners had the right to sell their licenses, perhaps at a profit, he said. And unlike the donations for college tickets, PSLs were a one-time fee.

"Once you give it once, you are done," Muhleman said. "From then on you own the rights to those tickets."

To everyone's delight, the Panthers sold 62,000 PSLs for a stadium that holds 72,000 fans, raising more than $158 million.

Richardson, the team's owner, knows how important that investment was.

"You sit here and think about it, the people who bought PSLs, at first they didn't know what a PSL was and they really didn't understand the concept," Richardson said in an interview last week.

"They bought them to help us."

Although PSLs worked for the Panthers, consultant Marc Ganis, of Chicago's Sportscorp Ltd., said that they have since lost some of their luster.

"There's been a backlash since PSLs were first created and it's become a pejorative term," he said. "It's a fairly one-sided arrangement. You can argue that it's only a good deal for the teams, but it's also a good deal for fans."

Since the first campaign for the Panthers, Muhleman IMG Marketing has advised groups trying to build or renovate stadiums in such cities as Baltimore, Cleveland, Chicago and Pittsburgh.

In Chicago, Ganis said that the Bears owners decided against selling PSLs to pay for renovations at Soldier Field because the team already was getting financial support from taxpayers and the league.

"The Bears already were perceived as being piggish," he said. "That would have been over the top."

The concept worked with the Panthers, he said, because the region needed to prove it could support an NFL expansion team after winning a 1993 competition that included such former NFL cities as Baltimore and St. Louis.

"You would not have the Carolina Panthers without PSLs," Ganis said. "At the time, Carolina and Jacksonville were the surprise winners. All it would have taken was one hiccup and this team could have been in St. Louis or somewhere else."