The Detroit Pistons are offering a chance to earn money back on season ticket packages.
The club is using a promotion called “Pistons IPO: Initial Pistons Offering,” where fans deposit the full amount for season tickets, and the team will transfer the funds to an account offering up to 5% annual percentage yield.
The accounts will be held by Michigan-based Flagstar Bank, which also serves as the Pistons’ banking and mortgage partner and has been the team’s jersey patch sponsor since 2017.
“This is a great win for Pistons fans,” Flagstar Chief Marketing Officer Matt Allen said in a statement. “It’s an opportunity for them to get a lock on Pistons season tickets, while experiencing first-hand the value and benefits of being a Flagstar customer.”
With pandemic-induced unemployment above 10% — and Michigan’s unemployment rate hovering just above 8% — Pistons executive Mike Zavodsky told CNBC consumers are seeking “additional utility and value” when spending money on entertainment.
“That was the driver of this IPO,” said Zavodsky, the Pistons’ chief business officer. “How do we provide additional value for our fans and ticket holders? In this instance, they can earn additional money or accrue additional funds that can be used later.”
After fans select their package, which can start as low as $23 per game, Flagstar Bank will contact ticket holders to create a certificate of deposit account. Fans will need to spend more than $500 to be eligible. Funds will accumulate interest through Dec. 31.
“We’re providing an access point where a wide scope of fans can enjoy this,” added Zavodsky, who started with the club in June after stints with Roc Nation Sports and the Brooklyn Nets.
Though the NBA has yet to determine when its 2020-2021 season will start, and questions remain about when spectators will be allowed back into arenas, Zavodsky called the Pistons’ unique offering a win for consumers.
If fans can’t attend games due to the pandemic, he said, ticket holders would have a variety of options, including keeping the funds in the account and rolling the money over for future ticket packages.
And if the games are played with fans, the Pistons would only retrieve money paid for packages and allow account holders to keep any interest accumulated.
Before the Covid-19 pandemic suspended the NBA season on March 11, the Pistons averaged roughly 15,400 fans for its home games at Little Caesars Arena. That’s tied for 28th in the league, according to ESPN.
Zavodsky didn’t discuss how the promotion would impact the club’s revenue, which is estimated at $255 million for 2020, according to Forbes. But it’s not uncommon for sports franchises to use future ticket revenue to back loans used for yearly operating expenses.View Full Article