SBJ/December 17-23, 2012/Leagues and Governing Bodies

StubHub won’t surrender MLB opt-outs

Where will fans of the New York Yankees, Los Angeles Angels and Chicago Cubs go to buy and sell tickets on the secondary market next year?

That question emerged as a major one after the clubs elected to opt out of the new five-year contract extension between StubHub and MLB Advanced Media. The Yankees, Angels and Cubs are each expected to pursue ticket resale marketplaces with price floors. But StubHub plans to remain an active marketplace for tickets to all three teams, setting up a powerful consumer battle next season.

The three clubs each have yet to disclose their specific plans for secondary ticketing after electing to not participate in the new MLBAM-StubHub deal, formally announced last week. But industry sources said the Yankees and Angels in particular are developing resale marketplaces with rival outfit Ticketmaster, which allows for minimum resale listing prices that have long been anathema to StubHub and parent company eBay Inc.

Each club said it expected to make formal announcements on secondary ticketing in the coming weeks.

“We are actively working on an alternate relationship that we feel will be more beneficial for Angel fans in our local market,” said Robert Alvarado, Angels vice president of marketing and ticket sales.

Officials for Ticketmaster, already the primary ticketing provider for the Yankees and Angels, declined to comment.

Such a scenario will create a vigorous scrum for fan dollars and mindshare next season in MLB’s three largest media markets, with secondary ticket inventory available at both StubHub and the team-sanctioned resale markets. The three clubs will have formally blessed their own resale options in the name of preserving ticket price integrity and their season-ticket bases. But StubHub remains a highly powerful brand in secondary ticketing, one that has been burnished further in recent months by its aggressive “Ticket Oak” national marketing campaign on TV.

Company officials said that even without a formal relationship with the NFL, as Ticketmaster has, StubHub remains by far the largest resale marketplace for football tickets. To that end, StubHub plans to establish last-minute ticket pickup locations near Yankee Stadium, Angel Stadium of Anaheim and Wrigley Field, and will market their continued availability to fans in those markets, even without formal integration or support from the clubs.

“We will still provide an excellent experience to buyers and sellers in every market,” said StubHub CEO Chris Tsakalakis.

New York in particular will serve as a crucible in the StubHub-versus-Ticketmaster battle. With the Yankees remaining a highly popular brand and the club second in attendance in baseball last year, ticket inventories will likely be large in both resale spots, and marketing across all media in the tri-state area to capture fan attention will be intense.

The effective minimum for an MLB ticket on StubHub next season will be $6 when including all fees and delivery charges, which will now be disclosed at the start of the purchasing process. Low-end thresholds on the new, official resale marketplaces for the Yankees, Angels and Cubs are expected to be higher, likely much closer to face value, raising a big question of how much fans will chase low prices.

For the other 27 MLB clubs, the StubHub deal creates some much-desired certainty on what has been called by some baseball executives the biggest issue facing the game. The new contract term establishes the $6 effective minimum price through the all-in prices disclosed up front, anchor tagging in which the cheapest tickets are not necessarily the first listings shown, greater club flexibility around offline marketing, and more revenue for baseball. Clubs can opt in or out of the deal on an annual basis.

“We were very supportive of this extension getting done and were pleased it did,” said Russ Stanley, San Francisco Giants managing vice president of ticket sales and services. “I don’t think we get back to a season-ticket base of more than 29,000 [full-season equivalents] like we have without StubHub. We’ve had a good relationship with them, they’re our neighbors with the headquarters right down the street from us. I do understand some of the concerns some of the other clubs have had. We still have softer [demand] games here, too. But we see this as a net positive.”
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