When the Houston Texans host Super Bowl LI at NRG Stadium on February 5, fans across the country will be watching a game taking place in a stadium with a retractable-roof that was built using $289 million of taxpayers’ money, which was about 60 percent of the total construction cost.
In fact, $6.3 billion of taxpayers’ hard-earned money has been spent on the public financing of NFL stadiums since 1995. Although fans have picked up most of the tab for the overwhelming majority of football stadiums, they continue to be exploited by teams and subjected to unfair practices that restrict the purchase, sale and transfer of tickets.
This has a distorting effect on the secondary resale market for tickets.
According to Judith Grant Long, a Harvard University professor of urban planning, taxpayers provided 70 percent of the construction and renovation costs of NFL stadiums. If fans contribute substantially to the funding of a stadium then it is only fair that teams end ticket resale restrictions that negatively impact fans, which include extra fees on resale, paperless tickets and price floor minimums.
Price floor policies that prohibit a ticketholder (who already paid the team full asking price for his or her tickets) from accepting less than a certain minimum artificially distorts the real market resale price of tickets in the secondary market.
For instance, if a fan is willing to pay $45 for a ticket but the team prohibits the ticketholder from reselling it for less than $50, then the ticket goes wasted and the seat remains empty.
Fortunately, as part of a multi-state Settlement Agreement in November 2016 with the Attorneys General of New York, Ohio, Pennsylvania, Massachusetts, Florida and the District of Columbia, the NFL agreed to halt its league-wide price floor policy.
This was an important step and the NFL deserves credit for agreeing and doing the right thing.
Importantly, the individual teams are not party to this Settlement Agreement since it is league-wide with the NFL. Therefore, teams can unilaterally enact team-specific restrictive policies and practices.
If these teams do not heed to the provisions of the settlement, fans can expect to see arbitrary minimum resale prices by teams that were already paid its full asking price in the initial sale.
According to recent reports, a prime example is the Tampa Bay Buccaneers, that would not allow any ticket to be resold on the NFL Ticket Exchange for less than $35 - even though 100 percent of the funding of its stadium came from taxpayers.
Additionally, fans are by now well-acquainted with the experience of buying a ticket on a teams’ online resale platforms, only to see its price substantially inflated by fees and charges. Prime examples are the Pittsburg Steelers fans, who are forced to pay up to 20 percent in extra fees on the team’s ticket exchange, even though 61 percent of Heinz Field’s financing came from the fans directly.
Similarly, although 65 percent of the Seattle Seahawks’ CenturyLink Field financing came from the public, fans can also expect to pay 20 percent in extra fees on the resale exchange.
These unfair practices are anticompetitive and abusive. It also smacks of hypocrisy for teams to rely on billions in taxpayer funding to build or renovate the stadiums where they play while restricting taxpayers’ ability to sell or transfer their tickets as they wish.
Teams should not be allowed to rely on the taxpaying public with one hand, while choking them with the other.
As the NFL season comes to a close and teams look toward the future, they should do what is right by their fans by immediately ending practices that unfairly try to control or profit from secondary market resale activity. If teams fail to do so, lawmakers will have to take action.
The more we and others do to call attention to practices by leagues and teams that are not in the public interest, the better. This is at the core of our very important Protect Ticket Rights initiative (www.ProtectTicketRights.org).