Defaults on Falcons PSLs near $43 million

Most of the latest defaults occurred before pandemic.

Falcons fans walked away from another $10.9 million worth of personal seat licenses in a 12-month period through June, according to the latest available data.

That raised the total amount of defaults on seat licenses in Mercedes-Benz Stadium to $42.9 million since 2016.

The figures, provided by the Falcons to the Georgia World Congress Center Authority and obtained by The Atlanta Journal-Constitution through an open-records request to the GWCCA, represent the remaining amount that was owed when PSL holders quit making payments on thousands of seats. The PSLs are fees, often paid in installments over multiple years, for the right to buy Falcons season tickets in a particular seat for as long as the team plays in the stadium.

When a default occurs, the fan loses whatever money has been paid on the PSL previously, and the Falcons lose a season ticket holder. The team then can resell the seat.

Most of the defaults in the 12-month period through June 30 occurred in January and February, before the onset of the coronavirus pandemic, according to a spokesperson for Falcons parent company AMB Sports & Entertainment. Of those who provided the team a reason for defaulting, 77% cited financial, health or relocation issues, the person said.

The Falcons’ second consecutive 7-9 season presumably didn’t help, either.

About 7,000 Falcons season ticket account holders have

defaulted on their seat licenses since 2016, records show, with the vast majority of those accounts representing two or more seats. About 650 of the account holders who defaulted later returned as PSL owners.

Records show that seat-license purchases made before the 71,000-seat stadium opened in August 2017 totaled $299.1 million, including interest added to accounts annually. Of that, $196.5 million had been paid as of June 30, and after the $42.9 million in defaults, $59.7 million remains outstanding (plus future interest).

The total “default writeoff balance” of $42,933,454 as of June 30 was up from $32,001,679 as of one year earlier.

Seat-license proceeds go toward the cost of building the $1.5 billion stadium. The defaults don’t affect the amount of taxpayer money committed to the stadium but could increase the amount to be covered by the Falcons organization if the seats aren’t resold.

The seat licenses originally went on sale in January 2016 and ranged in price from $500 to $45,000 apiece.

Because of the pandemic, the Falcons in April offered PSL holders still on installment plans the option of extending their payment schedule by one year and deferring either their 2020 or 2021 payment.

Holders of seat licenses have the right to sell them to other buyers, rather than defaulting and forfeiting whatever they have paid. But the defaults, which occur when holders don’t make installment payments on the licenses or don’t renew their season tickets, apparently reflect the difficulty in finding buyers.

Figures aren’t available on how many new seat licenses the Falcons have sold since Mercedes-Benz Stadium opened in August 2017 — or how many defaulted licenses they have resold — because the team isn’t required to submit those sales contracts to the GWCCA, a state agency.

The Falcons and Atlanta United announced last week their home games through September will be played without fans in attendance because of COVID-19, abandoning an earlier plan to have 10,000 to 20,000 fans at those games. Season ticket holders have been offered the option of receiving refunds for 2020 payments already made or applying those payments toward 2021 tickets. A decision will be made later about whether to open the stadium to a limited number of fans for games in October and beyond.