SBJ/April 2-8, 2012/Leagues and Governing Bodies

NFL, Ticketmaster renew partnership for at least $200M

The NFL has renewed its secondary ticketing sponsorship and business venture with Ticketmaster for five years and at least $200 million, sources said.

The league confirmed the renewal but not the economics of the new contract, which will begin with the 2013 season. Owners voted unanimously to extend the contract at their annual meeting last week in Palm Beach, Fla.

“We are very happy with the growth of the business,” said Neil Glat, NFL senior vice president.

Glat said that while it is tough to gauge market share for the league’s secondary ticket business, NFL officials consider that the percentage held by Ticketmaster’s TicketExchange service has quadrupled since the start of the current NFL-Ticketmaster contract in 2008 and now sits at 20 percent of the market for NFL secondary tickets. StubHub remains the clear leader in the category.

“All of our clubs are also on Ticketmaster for their primary tickets,” Glat said, “so the ability to integrate primary and secondary we can just continue to build on.”

One of the features of the new deal is that TicketExchange’s rivals will no longer be able to advertise on NFL digital products other than for specific non-football events. Previously, those companies could advertise NFL game tickets on NFL digital outlets. “You will see a lot less of that going forward,” Glat said.

Fans who want to buy tickets on the secondary market can go to Ticketmaster’s site or individual club sites. For Ticketmaster, the deal has allowed the company to grow in the secondary NFL ticket business, and the extension suggests the deal is working for the company. Ticketmaster officials could not immediately be reached for comment.

Fans can buy and sell tickets on any secondary site, but TicketExchange stands as the official secondary ticketing service of the NFL and is promoted and advertised by the league and Ticketmaster. Continued promotion is expected through heavy digital advertising and in-stadium opportunities.

About a dozen teams were not initially with TicketExchange at the start of the 2008 contract. StubHub and RazorGator at that time had most of those additional team deals, which were allowed to expire under their own terms as the league’s Ticketmaster deal took effect.

All 32 teams will now be on board for the new contract with TicketExchange; the 32-0 vote approving the extension showed teams were not hesitant to pool their rights in this category.

At the start of the old deal, the league got about $20 million, or $1 million per participating club, annually. Now, teams will get a bit more than $1 million per club, plus Ticketmaster will pay about $8 million annually to the league, sources said. Ticketmaster also must spend about $25 million over the course of the contract to promote the service, though the company is expected to spend more.

Teams can earn more money by generating a high volume of business for TicketExchange, and if the business grows to a certain point, a revenue-sharing system will kick in between Ticketmaster and the NFL.
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