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Weekend Coverage: Betting on the 49ers PSLs, MLB, and US Open

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The hottest new Silicon Valley IPO may just be the San Francisco 49ers. Plus, baseball and tennis.

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Short: PSLs


That stands for personal seat licenses. They're pure evil.

What are PSLs, you ask? They give you the right to pay money to a sports franchise in order to have the right to pay said sports franchise more money for actual tickets to a game.

For example, let's say the Cowboys are building a new stadium and they need to make it enormous and have every amenity known to man because heaven forbid someone would go sit in a stadium for the sole purpose of watching a game. They need to generate more money because.....well, they can, so why not? So they charge fans some initial fee for these seat licenses. The offer price depends on the quality of the seats. It might cost $500; it might cost $20,000. You pay the Cowboys the PSL fee -- then you pay the face value for the tickets.

The PSL is a one-time charge; you now "own" the seat. And you can resell it at some point, which makes it an actual investment. So even the guy that paid $20,000 for his PSL might actually make money on it if the price of PSLs rallies.

Why bring this all up? Well, the 49ers are building a new stadium, so they stand next at the PSL gravy train.

The hottest new Silicon Valley IPO may just be the San Francisco 49ers: As fans pick up stock in the team by purchasing seats in the new Santa Clara stadium, they could sell the seats in the future at either huge profits or steep losses depending largely on how the team plays.

Niners fans last week began paying one-time costs of at least $2,000 to buy each of the 50,000-plus seats in the stadium, giving them the right to season tickets beginning with the Santa Clara kickoff in 2014. But fans can later sell their seat "license" to fellow 49ers enthusiasts, like a stock. Already, some speculators are gobbling up seats, and planning to wait for their value to rise so they can profit in coming years.

A review by one newspaper of other NFL teams shows that Pittsburgh Steelers fans, for example, have resold their seat licenses for up to 17 times what they paid originally by taking advantage of low initial prices and their teams' success on the field. But even buyers in big markets with die-hard fan bases like the Dallas Cowboys have lost more than $10,000 per seat after paying too much at the start and selling during losing streaks.

Those who buy high-priced seats in the Santa Clara stadium now, at the peak of Niners fever, may wind up like investors who last month bought stock in the super-hyped Facebook (FB) IPO, before shares famously plummeted. Or they might end up like Google (GOOG) investors who were happy to get in on the IPO.

Every team has different rights and perks attached to the PSLs, so the investment-worthiness includes many more factors than the quality of the team.

The Giants let PSL owners park in the lot; other venues give you first dibs on other events, et. al. But at the end of the day, the "value" comes down to the resale value of the tickets vis-a-vis the face value or secondary market. The Cowboys PSL demise likely means that King Jerry overprices his tickets (go figure), so there's no advantage in buying the rights to buy the tickets when you can typically get them cheaper on StubHub or other big resellers.

So I'm basically guessing that predicting the fundamentals of Facebook for 2014 is easier than predicting the fundamentals of the Niner resale market in 2014, especially since no one has any idea of face value this far out.

Long: The Big Bang Theory

I think I watched this television show once. But hey, it must be good -- it beat the combined ratings of of Fox's (NWSA) Saturday Night MLB and ESPN's Sunday Night game according to Deadspin. Oh, and its June, so The Big Bang Theory was a rerun.

It all sounds funny, but it does need a little context.

MLB's Saturday night package is the worst idea ever.

If you get MLB TV or Extra Innings, you can watch any game, any time, as long as it doesn't involve your local teams. But when Fox broadcasts, both get blacked out and you can watch... whatever game Fox shows you. And only that game. In the New York area, that means almost always a Mets or Yankees game. Wahoo -- I get to watch the Mets with Joe Buck and Tim McCarver!

If the game is lousy, or its the bazillionth Yankees-Red Sox game of the season, you can't switch because...well, darn it, Fox paid good money to prevent you from switching.

So, back to the ratings.

Saturday is a low viewership night to begin with, and Fox is basically just showing you a matchup you can see all the time.

On Sunday, ESPN showed a Red Sox-Cubs game, which ostensibly is a ratings monster. Except both teams are a bit down this year. And the competition for the sports viewer was massive. NBC (GE) had the US Open golf final round. ABC (DIS) had the NBA Championship Game 3. I figured I was the only sports fan actually watching baseball.

Long: Prime Time US Open

I wonder why the powers that be didn't think of running tennis in prime time before. I find no sport more boring to watch than golf. Then again, I'm biased: I'm horrible at golf.

But hey, what else does NBC show on Sunday nights outside of NFL season? Had to beat that.

Twitter: @agwarner
No positions in stocks mentioned.
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