Economics of Linsanity: Season Tickets As Speculative Investment

A blog about business and economics.
Feb. 21 2012 10:05 AM

Economics of Linsanity: Season Tickets As Speculative Investment

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NEW YORK, NY - FEBRUARY 20: Carmelo Anthony #7 and Jeremy Lin #17 of the New York Knicks stand on the court against the New Jersey Nets at Madison Square Garden on February 20, 2012 in New York City.

Photo by Chris Trotman/Getty Images

Season ticket holders to sports franchises normally get a volume discount, but now that the Internet's made it easier than ever to buy or sell tickets on the secondary market the more interesting property is that they're a kind of option. You lock in a price over the offseason, and if the team is unexpectedly awesome you can resell at a profit. But if the team is unexpectedly bad, you're a sucker. The arrival of Jeremy Lin on the New York Knicks has demonstrated that nicely, creating a windfall for anyone who signed up for season tickets during the offseason. One such lucky man is my father, Rafael, author of A Happy Marriage (and other novels), whose shocking true tale is below:

"Jeremy Lin has saved me from an act of supreme economic folly. In 2003, a life-long TV Knicks fan, I gambled that the team’s disastrous state, no matter how profound the owner’s incompetence, couldn’t last forever and that the nadir of interest in the team was my chance to grab decent seats. The view was great, but the team wasn’t. With one frustrated son or other I watched game after game of irredeemable play. When unable to attend or persuade anyone to accompany me, I couldn’t give the tickets away. Doormen said “they were busy.” Friends just laughed. One sneered that I should put them up on a legal scalping website, StubHub. “You’ll get a few pennies back from some out of town schmuck.” It’s hard to say which was more humiliating, being able to put an exact figure on how much I was overpaying or simply tearing them up. My younger son prevented a complete loss by taking on the brutal punishment of watching almost every game during the shedding of Isiah Thomas’s psychotic acquisitions and we told ourselves: Donnie Walsh’s plan will work when all the pricey garbage is shed; LeBron will surely come to New York if he wants to be beloved; doesn’t everyone know if you shake it in Manhattan the whole world trembles?

"You haven’t felt contempt until friends congratulate you on having watched hundreds of bad games and wasted thousands awaiting the acquisition of a no-defense forward playing on microfracture knees. But...wait...those fragile bones brought energy and scoring to a roster of kids, and that crazy upsidedown D’Antoni game of just-give-us-the-ball was winning and fun. Prices on StubHub for games against LeBron and Kobe doubled, then tripled face value, and a new anguish was born. What was it worth to me to go to each game? Unfortunately the concept of opportunity cost had been explained to me by that sour science, microeconomics, and StubHub was putting a cruel and greedy number on it. Go, overpay for hot dogs or watch at home, pocket a grand and order in sushi? Was it merely a grand? What if I pushed it to two Gs, waited until the sale deadline two hours prior to tipoff? If no one bought, hop the Subway and go. If someone did I could grab the remote and order the lobster roll.

"Then: The Trade. Carmelo arrived, our young talent was exiled, and our offense dribbled. Worse, the Garden redesign was announced. My seats were going to vanish, replaced by luxury boxes for the 1%. I would be offered a relocation in the off season. Last summer, with a lockout looming, the take it or leave came: I could sit in the brand new Club section, in the center, five rows closer for only for $230 a ticket. Oh one other thing, the Knick’s sales associate explained, I had to take a third ticket. Wait, I complained, if I have to buy more than two can’t you make it four? Nope. You can have three or nothing.

"I swore I was going to hang up. What I had done so far was foolish, but romantic. This was merely stupid. I barely recognized the voice that gave them my credit card number for three seats $230 each. I expected my sons to have me committed in order to save what was left of their inheritance. For the first 27 games this year, often the third seat went empty, scorned by friend and StubHub alike. The son who lives in NY and I kept going because after all this was going to be the last season we would waste money on our beloved and idiotic Knicks. Then, in desperation D’Antoni looked past racial stereotypes to the end of his bench.

"Now StubHub is a full time hobby, a remarkable field experiment in Holland Tulip psychosis, a painful face to face with the tides of greed and fear. Prices can be changed and sales surveyed with an iPhone Ap. What do you choose: the sheer joy of seeing a surging team play with abandon and fearlessness or...2,000 dollars to defray Dolan’s gouging? Each time I sell there’s remorse -- I didn’t sell for enough! Each time I don’t I feel a fool until the tipoff and then I’m overjoyed. I was there for Lin’s first brilliant drive, I was there with both of my sons when he stunned the Lakers, although I could have sold my seats for 3 gs. Yes, there’s nagging doubt at the most provocative economic question: can you put a price on a good time? The last two hours before tipoff are the most agonizing: Should I put them up? When I sell, the bitterest moments are watching the celebrities on TV who haven’t paid the $5,000 they should and mostly don’t know a pick and roll from a lobster bisque. And yet, even when I do go with one son (sorry, friends, who declined when they were free) there’s the pleasure of irony: the third seat Dolan forced down my loyal Knick throat cuts the net cost at least in half and sometimes -- thanks, LeBron! -- to zero."

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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