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 Fancy seating: a revolution in sports finance This is the seventh in a series of articles taking a closer look at ''Plan B,'' the financing mechanism proposed by Pittsburgh and Allegheny County officials to pay for new baseball and football stadiums and the expansion of the David L. Lawrence Convention Center. Today's installment is about premium seating -- luxury boxes and club seats. Q. Who invented the luxury box and club seat? It wasn't Thomas Edison, was it? A. The first stadium to have luxury boxes was the Astrodome in Houston, which was billed as the ''Eighth Wonder of the World'' when it opened in 1965. Judge Roy Hofheinz was the Astros' owner and is credited as the driving force behind the building. The ''club seat'' was born in 1987 with the opening of a new Miami Dolphins football stadium. It is a wider, more comfortable chair, usually protected from the weather, with a good view of the playing field and the added amenities of waiter/waitress service, access to a private club and preferred parking. In some facilities, club seat holders have their own separate entrance so they never have to mix and mingle with the commoners. The success of club seating at what was then called Joe Robbie Stadium (after the Dolphin's owner at the time) awakened pro sports owners to the vast revenue potential of premium seating. There was enormous untapped wealth in the wallets of well-to-do sports fans who were willing to pay more for plush, exclusive accommodations at the ballpark. Soon, the race was on to capture that revenue. Many franchises cajoled or coerced governments into building, or heavily subsidizing, new stadiums and arenas that dramatically increased their bottom-line revenue, primarily because of premium seating. Franchises that didn't get new facilities found themselves at a competitive disadvantage. The phenomenon of premium seating made some facilities obsolete before their time. Extreme examples are the Miami Arena, opened in 1988 (a year after Joe Robbie Stadium) and now about to be abandoned for separate new basketball and hockey arenas, and the Metrodome in Minneapolis (opened in 1982 but now deemed inadequate by the Twins and Vikings). To a lesser extent, Three Rivers Stadium, which was built to last until at least 2010, is in that category. Q. Don't they already have lounge boxes at Three Rivers Stadium? A. Yes. There are approximately 110 of them, which ranks the Pirates sixth in baseball in the number of luxury suites and the Steelers 15th in the National Football League. But the Steelers have no club seating and the Pirates just 100 club seats (the section just behind home plate), so they are way behind the times in that regard. Incidentally, the Pirates have sold out the 100 club seats at $75 per ticket for the entire season. Q. Why can't they just build more club seating at Three Rivers? A. That has been suggested, but there are some hangups. The stadium is already fairly cramped and it would be difficult to add the related facilities (namely, the additional private clubs). Some current ticket holders would be displaced, and the Steelers don't want to do that. The teams are no longer interested in sharing a stadium because they have to divide the premium seat revenue. It would be fair to say that ''new ballpark envy'' also weighs in. When they came back from their first visit to Jacksonville's new stadium a couple of years ago, Steelers officials were practically drooling. Q. How much money are these new stadiums with premium seats worth to the teams? A. It varies, based on how much of the construction cost is paid by the teams and how the deals are structured. But it is not uncommon for teams to increase their income by $20 million per year or more when they move into their new homes. The Pirates and Steelers don't divulge their revenue forecasts, but little birdies have chirped to us that the Pirates could expect anywhere from $2.5 million to $5 million in new premium seating income alone; for the Steelers, premium seating could easily produce $20 million in new annual revenue. Last year, the Pirates reaped about $3 million from Three Rivers lounge boxes and the Steelers about $1.5 million. The Pirates' club seats generate another $600,000 in ticket revenue. Q. If the Steelers are going to make $20 million a year from premium seating, shouldn't they pay more toward a new stadium than the $50 million they have pledged? A. The city and county have posed just that question at the bargaining table, and that has become a focal point of the ''Plan B'' negotiations. Q. Isn't the whole reason for building new stadiums at taxpayer expense to accommodate fat cats so they'll throw more money into the teams' coffers? A. That's a big part of it. In the Pirates' case, it's not the primary motivation. The Pirates will actually have fewer luxury boxes in a new stadium, and the Steelers won't be helping them sell the boxes (if you buy a box at Three Rivers, you get both teams). Club seats will produce a new income stream, but the Pirates are counting on a new, smaller, cozier park to increase overall attendance. For the Steelers, of course, attendance isn't a problem. But the team is way behind its league competitors in premium seat revenue, so team officials believe they need club seating and plusher, more expensive suites. Q. How many lounge boxes and club seats are
planned for the new stadiums? Q. How much does a lounge box cost, and what do I get for it? A. Right now, a lounge box at Three Rivers goes for $55,000 to $65,000 per year, including tickets to all the games. The boxes are carpeted and furnished with seating, cabinets, refrigerators and sinks, and catering is available from the stadium. At newer baseball and football stadiums, luxury suites are selling for as much as $295,000 per year, but one could expect the Pirates and Steelers to command an average of $80,000 to $120,000 for luxury boxes in their new homes. Q. That's out of my league. How about club seats? A. A club seat at Jacobs Field in Cleveland costs about $3,500 per year; at Atlanta's Turner Field, $2,075; at the new Arizona Diamondbacks stadium, $3,745 to $4,050 per year. In football stadiums, generally, they go for $1,000 to $3,000 per season. Q. Which way to the bleachers? (Do you have questions about the components of Plan B? If so, send them to Dissecting Plan B, c/o Local News, Pittsburgh Post-Gazette, 34 Blvd. of the Allies, Pittsburgh, PA 15222.)
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