Luxury Suites Rule in Professional Sports Revenue
"One guy came to me and said he wanted to get out of his suite contract, so I started reselling his seats," says Matalucci, who registered $2 million in sales last year.
"The economy turned upside down and some businesses were asking, 'What do I have this box for?'" Matalucci says. "Other firms say, 'Why do we need to go to all the games?' They need help in selling the tickets, and that's where I come in."
Tickets for the traditional fan are also caught up in the luxury box rage, says Kara Boatman, an economics professor at Saint Mary's College of California.
"With more luxury suites, that meant fewer regular seats, and team owners raised prices to cover some of the cost of building the suites," she says.
Boatman argues that the luxury-suite phenomenon was pushed by the NFL's revenue sharing model, which until July 2011 allowed owners to keep all funds from luxury suite sales and drove up the average ticket price.
Because the revenue from luxury suites in the NFL must now be shared with players, as it is in Major League Baseball, that could change how suites are viewed in the future, adds Boatman.
"NFL owners still have some enticement to build suites, but the lower revenue will reduce the incentive relative to what it is now," she says.
As for the average fan who occupies the less expensive seats, don't worry about them, says Bill Ordine, a former sports reporter in Philadelphia and Baltimore who now runs a sports fantasy and promotion website.
"Fan loyalty is always based on team performance rather than a sense of being disadvantaged because of luxury suites," Ordine says. "Besides, most fans aspire to be rich enough to afford a suite."
There's no question about the ongoing loyalty for luxury boxes from team owners. While the building boom of new or renovated stadiums may be over, says Fordham's Conrad, luxury suites and their revenue are literally set in cement for now.
"Luxury suites are here to stay for the next few decades. Most franchises have them. You can't really tear them down," says Conrad. "As long as there is demand, they will be a good source of revenue."