PSL Holders Fight… For Their Right… To Profit?

A recent lawsuit filed against the Tennessee Titans could offer the latest interpretation of the rights and obligations of parties to a PSL Agreement.

Professional sports teams began selling PSLs, Personal Seat Licenses, to offset new stadium construction costs in the 1980’s. Today, PSLs or some equivalent are sold by nineteen out of thirty-two NFL teams and numerous other major league sports organizations. For a one-time fixed fee, a buyer may purchase a PSL for an extended period of time, often as long as thirty years. The PSL gives the holder certain rights to specific seats in a stadium. Generally, the PSL holder has the right to purchase season tickets for those seats before the season begins and, depending on the language of the agreement, the right to sell or transfer the rights to the seats.

As first reported by Paul Kuharsky, in March of 2021, a group of “Permanent Seat License” owners (PSL equivalent) filed suit against Tennessee Football, Inc. (the Tennessee Titans) and Cumberland Stadium, Inc. (Nissan Stadium). The complaint alleges that the Titans, through ticket transaction data, determined the plaintiffs to be “ticket resellers.” Although all of the plaintiffs are PSL holders, six of the eleven plaintiffs are not residents of Tennessee and Kuharsky stated that it was his “sense that the franchise sought to identify ticket buyers who have not attended a game themselves for multiple years.”

The complaint alleges that the Titans limited the sale of tickets, “grossly inflated” ticket prices, limited the amount of time to purchase season tickets, limited relocation options, eliminated season ticket member perks and gifts, and did not allow for the standard six-month payment plans to those deemed “ticket resellers.” The complaint further alleges that this treatment of “ticket resellers” was a large departure from the Titans course of dealing with its PSL holders in the past. One plaintiff claimed that the resale, transfer, and/or purchase of additional PSLs was traditionally encouraged. The same plaintiff stated that, based on the suggestion of a Titans’ ticket representative, he purchased approximately eighteen PSLs, in contradiction to the publicly stated policy that PSL holders could hold no more than four PSLs. Ultimately, the plaintiffs claim that the Titans and Nissan Stadium violated their duty of good faith and fair dealing under the PSL Agreement and “have substantially and negatively impacted the value of all PSLs,” resulting in a breach of contract and a violation of the Tennessee Consumer Protection Act.

Section 3(e) of the most recent Titans PSL Agreement states the Titans, “in its sole discretion and without regard to good faith or any other standard,” may limit the number of seats, prohibit any transfer/sale of seats, or terminate PSLs for any individual or entity determined to be a “ticket reseller” or “ticket broker.” Although the PSL agreement does not cover price increasing, payment plans, relocation, or timing to purchase season tickets, it appears that the Titans expected and addressed such a scenario within the agreement.

Does a PSL holder have the right not to attend a single game, while selling each ticket for personal profit? Does an NFL team have the right to inflate pricing and treat ticket resellers differently than the average fan who attends each game? Absent a settlement, these questions will likely be determined by the court’s interpretation of the PSL Agreement. Courts generally do not want to reshape or reconstruct contractual agreements among private parties. Rather, the court will look to the intent of the parties, evidenced by the words within the agreement. Here, the interpretation of Section 3(e) will be crucial to the court’s decision.

New stadiums are being built. More teams are relocating and rebranding. The professional sports landscape is everchanging. It will be important for teams, stadiums, and fans to monitor cases such as this one to better understand their rights and obligations regarding their Personal Seat Licenses.