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SBJ/March 6 - 12, 2006/This Weeks News
Pistons selling newest suites at lower prices
Published March 6, 2006
A year after the Detroit Pistons made a splash with $450,000 bunker suites, the team is citing the downturn of the auto industry as a reason for offering lower prices and partial-season purchase options for a new set of premium seats coming on line.
|The Pistons’ first bunker suites sold for $450K a year,
but new ones will go for $350K annually.
The team quickly leased the suites, and that demand prompted the club to build eight more suites as part of the addition of an atrium to the north end of the Palace.
Before going to market, however, team officials adjusted the pricing for the eight new suites, recognizing the different economic climate and hoping to appeal to a broader range of potential buyers. The additional suites are being leased at $350,000 per year. In addition, instead of the bunker suites’ five-year deals, the Pistons are leasing fractional shares for the new suites. The minimum share is a quarter season.
Tom Wilson, president of Pistons owner Palace Sports & Entertainment, would not disclose the exact pricing for fractional shares.
Chrysler, the third of the Big Three automakers by market share, posted $1.8 billion in earnings last year, but the two leading companies, General Motors and Ford Motor Co., lost $8.6 billion and $1.6 billion, respectively. Each has announced massive layoffs this year.
Ford and Chrysler are not team sponsors, but GM-owned Chevrolet is.
“So many people in our market are dependent on the auto industry,” Wilson said. “There are the suppliers and others who feed off the Big Three, so to ask for five years at these prices is a little frightening. So, we are looking for time-share buys, and when business comes back, people will hopefully want more than they have today.”
As of last week, the Pistons had leased three of the eight suites, which are expected to open by the end of March. Deals for the new suites provide for four fourth-row seats and eight other seats located within the first 10 rows. The same food and ticket allowances apply as for the bunker suites, but there is no back-of-the-house access.
Deals signed now are being prorated for the remainder of this year’s regular season and playoffs, a Pistons official said.
“If we had these available in a good economy, they’d be gone in a week,” Wilson said. “But we have to be versatile.”
The Houston Rockets have also built bunker suites inside the Toyota Center. Other teams, including Charlotte and San Antonio, sell partial shares of traditional suites.
“[The bunker suites] are a new phenomena, and … splitting up the costs is also new,” said Scott O’Neil, senior vice president of marketing and team business operations for the NBA.
Michigan’s economic troubles so far are affecting only the Pistons’ new suite offering. The Pistons are planning to boost ticket prices for next season, and the club has not changed the terms of the original five bunker suites. The Pistons also have leased most of the 178 standard luxury suites.
The team had the league’s best record as of last week. “We’ve never had more than 20 suites open at one time, but we’re fortunate that we are a great team,” Wilson said. “If we weren’t, everybody would be looking to go elsewhere.”