Now You Can Default On Seat Mortgages, Too

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↵It’s possible that it’s not the best timing ever, considering the onslaught of news about people losing their homes because of risky mortgages, but sports teams would like fans to enter into 50-year plans to essentially buy their own seat in their team’s home stadium.
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↵Termed “equity seat rights”, the plans have already been adopted by the boards of regents at the University of Kansas and the University of California-Berkeley as a way to defray the cost of stadium expansions.
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↵↵⇥Cal plans to sell about 3,000 seats under the plan and hopes to raise↵⇥$270 million. The school’s best seats cost $175,000 to $220,000 apiece↵⇥over a 50-year term, while the cheapest sell for $40,000 per seat for a↵⇥40-year term. “Without this program, I don’t see any way we could↵⇥secure the funds,” said Cal associate athletic director David Rosselli.↵⇥“We needed a different approach.”↵↵Those espousing the seat mortgages claim the plans can benefit fans because they would be exempt from the annual hikes in ticket prices. Yet owners would still be responsible for paying interest on the seats over the length of the plan, so one wonders exactly how much savings they’re getting in the long term.
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↵One potential benefit for those who take out seat mortgages is the ability to transer the plan to someone else for potentially a higher cost than what was originally paid for the seat. With only five to 10 percent of seats in stadiums likely to be offered with these mortgage plans, many of them could become the financiers looking to turn them over and make a profit.
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↵Now where have we heard of that before?↵