As fall descends upon Pennsylvania thoughts turn from shore and mountain vacations to shorter days, cooler nights, a return to school, and football! So, what does football have to do with divorces? Say you or the business you own, or your spouse and the business they own, has season tickets to the local NFL football team. The season ticketholder uses some of the tickets and sells some of the tickets. You want either a share of the tickets for your personal use or, at the very least, a share of the profits from any ticket sale proceeds over and above the amount paid for the tickets.
Depending on how your team is doing, tickets can command a significant price. Assume premium seating and understand that there are only eight or nine home games per year, throw in preferred parking, and we are talking about some serious money.
Now let’s complicate the equation, the season ticketholder and his spouse are in the midst of a divorce. (Please excuse the gender stereotypes, but for our discussion, I am going to make the husband the primary football fan in the house.) The wife might not be enough of a football fan to sit in the rain on a Monday night in November, but she understands what Eagles-Cowboys or Steelers-Ravens means, and also that on whatever online ticket marketplace you look at, four similar seats are going for hundreds of dollars over face value per ticket. She wants her share of that profit.
On the one hand, the hundreds of dollars I use in my example is a little bit illusory since online ticket merchants all have a set of fees that cut into any profit the seller is making and also, the amount paid over the purchase price is income, that amount is technically subject to income tax, again cutting into the profit of the seller. I have encountered this issue in my practice, and it is possible to figure out the value of the tickets over and above the purchase price, adjust for fees and taxes, and then split the profits between the spouses. The problem I have encountered is trying to figure out what a comparable value is when the actual tickets are premium seats in a choice location, and also, different visiting teams on different days of the week command different secondary market prices. A Thursday night game in November against a mediocre team is not going to cost as much as a Sunday afternoon game against a longtime division rival.
The real value in the tickets, however, is the personal seat licenses associated with the tickets. For those not entirely familiar, when the current generation of NFL stadiums were being built, the majority of the team ownership groups established personal seat licenses, or PSLs, in at least portions of their stadiums. What this means is that football fans were sold a license for the right to buy tickets each season. PSLs are assets. As discussed above, assets that can generate considerable income each season. PSLs are bought and sold on the secondary market. They have a value and, therefore, are subject to equitable distribution. Going back to my example above, if husband owns the seat licenses and purchased them during the marriage, the seat licenses are a marital asset. If he inherited the seat licenses, the increase in value from the date of acquisition to the date of separation is subject to equitable distribution. If the seat licenses are held by husband’s company, they are an asset of the company and included in the value of the company.
Finding an expert to value PSLs might take a few minutes of an internet search, but as an income producing asset there should be a member of the American Society of Appraisers who can establish a value for equitable distribution purposes The point here is not to overlook the obvious. Just because one spouse is a football fan with season tickets and the other is not, does not mean those season tickets are not only a potential or actual source of income, but also are an asset subject to equitable distribution and should be addressed in the resolution of any divorce.
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