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Ticket resale market is changing the game

Signs are put up on the ticket windows

Signs are put up on the ticket windows announcing that a Yankees game is sold out. (Sept. 21, 2008) Credit: Getty Images

Ross Sheingold gave up his Yankees ticket plan in January, but not for the customary reasons.

He still could afford the 41 games in his modestly priced, mediocre-view, half-season package.

He was not making a statement about the team's lack of offseason acquisitions or Derek Jeter's sinking batting average or the cost of parking and soda.

He even understood the decision to limit partial plan owners’ rights to playoff tickets.

Nope, he wasn't angry or frustrated at all. He still is a fan and plans to attend plenty of games in 2011. So don't take it personally, Yankees.
It's just business, specifically a business Sheingold credited in the final line of a post announcing his decision on his NYY Stadium Insider blog: “StubHub, here we come.”

Like countless other fans, he has concluded the thriving secondary market is more efficient, flexible and sensible than buying directly from teams, a phenomenon reshaping the ticket business.

“I'll do what's best for my own bottom line, and the team will do what's best for its own bottom line,” said Sheingold, 29, who first bought a partial plan in 2005. “I've removed the emotion from it. Everything is a business transaction.”

Such is the cold calculus made possible by the Internet, which has helped create a market that did not and could not exist last century.
It began with generalists such as eBay and Craigslist, evolved into ticket specialists such as StubHub, RazorGator and TicketsNow and later begat search engines such as FanSnap, SeatGeek and TiqIQ, all of which bring buyers and sellers together seamlessly.

Technology alone wasn't enough, though. Security was a must. That has been accomplished through guarantees from the online companies and, even better, direct partnerships with teams and leagues.

As recently as 2006, the Yankees threatened to revoke season tickets of fans who resold on StubHub. Now Major League Baseball has a partnership with the site, and gets a cut of resales.

“It's a reality you have to accept,” Yankees chief operating officer Lonn Trost said. “If you can't beat 'em, join 'em.”

One other important thing: All of this is legal now.

State laws against reselling at a premium vanished through the 2000s, with New York essentially legalizing scalping (other than immediately outside event venues) in July of 2007.

Since then, the prices of everything from the Metropolitan Opera to Metropolitans baseball have been subject to the whims of the market, increasing options for consumers.

“I am amazed at how many people still think ‘sold out’ means sold out,” said Mike Janes, chief executive of FanSnap. “There is no such thing as sold out. It is an obsolete concept.”

Tickets always are available. The only real question is at what price.
For marquee events, there naturally is a premium. But often, the market enables fans to go to games at shocking markdowns, easing the impact of ever-rising face values.

It was not unusual this season for New Jersey Nets tickets to be available for $1 or less (not including transaction fees).

And that's not all bad for the team. Even though the Nets would rather you buy at the box office, they would rather have you there than not there at all.

“Ultimately, everyone wins if there's a butt in the seat,” Janes said.
The team sells food and merchandise, the buyer sees a game and the seller comes away with, well, more than nothing.

“Teams are incentivized to get people into their stadium,” said Joris Drayer, an assistant professor in Temple's sports management program. “The Mets don't want to shut down the secondary market. They are still happy I'm actually going to the game.”

Increasingly, the seller is a private individual, not a professional broker.

Net effect of all this activity: Danielle Maged, director of partnerships for StubHub, said the site's sales volume is up 40 percent in the past four years, during which prices have fallen nearly 20 percent.

“Consumers have come to realize the notion of a single price no longer applies,” said Jesse Lawrence, CEO of TiqIQ. "Every game is a little different and there are things that can impact the price. What we try to do is expose those things.”

Fans of the Mets, Yankees, Giants and Jets experienced sticker shock when those teams opened new stadiums in 2009 and '10. But in part because of market transparency, consumers have been able to push back (to a degree) on price.

Teams analyze the market to gauge which seats are over- or underpriced.

Trost said if tickets at a certain price point are going for at or above face value, the team knows it is in the right ballpark. And vice versa.
The Mets are a study in the harsh realities of the free market.

When Citi Field opened in 2009, many fans paid the stiff prices for season tickets, figuring a new stadium and lower capacity would make it easy to resell individual games.

That plan soured when the team flopped. Come 2010, many season subscribers bailed, on the theory they could join the crowds on StubHub.

“People got into the habit in 2009 of going to the secondary market because that was the only place you could get tickets,” said Dave Howard, the Mets' executive vice president for business operations.
The secondary market exists largely because of resold season tickets, so a drop in season ticket sales lessens the options for buyers and can result in higher resale prices.

Howard said the Mets found that last season nearly two-thirds of their tickets were reselling above face value.

Teams have tried to retain season ticket holders by enhancing perks and emphasizing benefits - one of which is, yup, the ease of unloading unwanted tickets on the secondary market, at least for teams that are winning.

"I think it certainly encourages many season ticket holders to buy when they know they can sell what they can't use,” Trost said.

Spokespeople for the Knicks, Rangers and Islanders declined to make officials available for this story. But Jeff Vanderbeek, the Devils' owner, said, “It's a very, very complicated issue. I know most sports teams are trying to get their arms around it. I can almost split it 50-50 between people who say it's a good thing and people who say it's a bad thing. But it's a reality of life. It's not changing. So you have to deal with it.”

The resale market is less of an issue for the local football franchises - who play far fewer games - than for baseball, basketball and hockey.
Matt Higgins, the Jets' executive VP for business, said it has been “an amenity for the fans,” and also a valuable tool in assessing pricing.
Mike Stevens, the Giants' chief marketing officer, said the team has embraced the secondary market as a better system than the old, broker-based one.

The delicate balance for teams is working with the resale market without, as Trost put it, “killing the golden goose” of box office sales.
One strategy teams including the Mets have adopted is variable pricing, charging more for the most attractive games.

The bolder, evolving trend is called "dynamic pricing,” in which the team itself lets individual game prices float day to day based on supply and demand.

The San Francisco Giants pioneered the practice and hit it big last season during a tight pennant race that caused prices to soar. Trost said that given their large season ticket base and consistent demand, the idea isn't a fit for the Yankees.

“I don't think it is right for my fan base if I sell 30,000 season tickets and then say if the game isn't good in September I'm going to lower the price,” he said.

What about the Mets? Howard said they are looking into the idea but added there always would be a price floor to avoid undercutting what season ticket holders paid.

Howard also said, "Once you get to that point there's going to be more of a melding. It's really all one market ultimately.”

That is the way many in the industry look at it.

“The markets ultimately are going to merge, whether it's in three years or five,” Lawrence said. "It will be, ‘Hey, I want to go to the game, what's the price today?’”

Said Janes: “Who handed down biblically that 12 weeks in advance of the event, that's when you buy tickets?”

Sheingold would agree. He lives on the Upper East Side and can electronically download a ticket in late afternoon and be in the Bronx for the first pitch.

He plans to chronicle his 2011 ticket-buying experiences on his blog.
He suspects he will come out ahead, especially after seeing how difficult it was to resell ALCS tickets last year above face value.

“I am savvy enough to know where I'm going to get tickets,” he said. “I don't need to be a season ticket holder to have the benefit of seeing a lot of games.”


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