Sports' New Ticket Masters

How StubHub and other sites are changing the game
January 31, 2011

Odds are good that you can't afford the highest-priced Super Bowl seat posted on StubHub. As of Monday it was going for $764,725. Even the least expensive would set you back $2,563. But make no mistake: The secondary ticket market can be a fan's bonanza.

My introduction to the beauty of the concept came on a Thanksgiving weekend. Marooned in Philadelphia and suffering from a severe case of cabin fever, my family could find neither a nearby bowling alley nor a movie suitable for three generations.

A suggestion to go to a Sixers game was summarily rejected on it'll-cost-a-fortune grounds. Yet with a few keystrokes we were able to score nine surprisingly decent seats—face value $30 each—at the Wachovia Center, which were being resold online at a cost of $55. Total.

At one point during the game, I turned to the guy on my right and gushed about this coup. "You paid six bucks a seat?" he asked with a quizzical look. I know. Steal, right? "We paid three."

From seat licenses to blackouts to ever-escalating prices for watery beer, sports fans tend to be a mistreated bunch, too often getting the short end of the ThunderStix. But the fans' revenge has come. In 2011, this era of $4 cups of coffee and $3.50 gallons of gas, it has become possible to watch live sports, in person, at Polo Grounds prices. During a recent week, for instance, the Bulls played the Nets in New Jersey and tickets could be had for $3. If you were willing to wait until the less sexy Milwaukee Bucks came to town on Saturday, the price fell to $1. That same night $2 would have gotten you admission to, say, the Hawks-Pacers game in Atlanta or the Suns-Cavaliers game in Cleveland.

And it's not just the NBA. Especially as the season slogs on, you can find major league baseball tickets in most markets for $5 and under. Hold out until a few hours before face-off and often you can snap up NHL seats for less than the price of a movie. In addition some sites, such as SeatGeek, which forecasts prices, and TiqIQ, which gives updates on such things as weather and team lineups, help consumers decide which games are most attractive. From a fan's perspective this is the best innovation since ... what? Spliced cable, maybe.

Of course the secondary ticket market has existed for decades. But in the past it was controlled and regulated by scalpers and brokers, who either gouged consumers on "hot" tickets or withheld excess inventory for fear that selling low would distort pricing. Online ticketing, however, is a classic goods market, supply and demand distilled to its essence, still further proof that something is worth only what someone else is willing to pay for it. StubHub, TicketNetwork, TicketsNow, Razorgator and other such sites, along with aggregators such as SeatGeek and FanSnap, make for a $2 billion industry in sports alone and account for 10% to 15% of all sports tickets sold.

What has been a boon to fans has been a mixed blessing to teams and leagues, which at first resisted this trend and then, in a classic case of if-you-can't-beat-'em-join-'em, have partnered with various ticketing websites. When fans can cherry-pick games and get through the gates at reduced prices, selling season-ticket packages becomes significantly more challenging. One executive for a New York team says that he must routinely respond to angry fans who e-mail him asking, Why did the guy in the row ahead of me pay a fraction of what I paid for my seat?

There are, though, some benefits to the clubs. Even if fans come through the turnstiles at comically discounted prices, they're still in the house, spending money on parking and concessions—and perhaps more liberally than they otherwise would, since the admission was so cheap. (When there's perfect pricing for beer, we'll really be on to something.) What's more, teams with partnerships get a vig of roughly 15% on resales and repurchases; so particularly when there's high demand for tickets and the market is more than face value—think: a Yankees--Red Sox game or this month's BCS title game, the top-selling event in StubHub's history—teams can crush it on secondary seats.

"I'm still going back and forth," says Mavericks owner Mark Cuban. "More participants probably give us more efficient pricing, [but] it allows customers to buy outside of us so that we don't have the direct relationship with them." The secondary market enables season-ticket holders to sell unwanted seats more easily than they could in the past; and in some cases they can subsidize their plans by reselling those games with the highest value. "On the flip side," Cuban notes, "the big buyers of those tickets are fans of the visiting teams. So it increases the number of fans of the opposing team in the arena, which is never a good thing."

There are few bargains out there on NFL tickets. With only eight regular-season home games, demand tends to be high, while excess supply is minimal. But for the other major sports the StubHub Revolution is well under way. The notion of strolling up to the arena box office and paying face value for a seat? To appropriate a phrase from the endangered species known as the scalper: Who needs to?

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For more from L. Jon Wertheim, including Tennis Mailbag, go to SI.com/wertheim

Fans often get the short end of the ThunderStix, but REVENGE HAS COME in the secondary ticket market.

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