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TicketReturn finds its niche in MiLB away from big boys

When he arrived as the new general manager of the Myrtle Beach Pelicans two years ago, one of the first calls Andy Milovich got was from Gordon Hirsch, TicketReturn.com vice president of marketing, who wanted to discuss ways the team could shift more of its ticket sales online.

“My initial reaction, having just moved to town with a million things to do before Opening Day, was that it wasn’t my priority, quite frankly,” said Milovich, who joined the club after heading up two other Class A franchises for minor league team owner Palisades Arcadia Baseball. “This was our naming-rights partner, so I needed to sit down and listen to why. He talked about how in this information age, everything was becoming data driven, and that’s how we needed to view tickets sales.

“He was spot on.”

The Class A minor league baseball team has served as a bit of a petri dish for the ticketing company in its two years as naming-rights partner at Pelicans Ballpark, providing a venue at which TicketReturn.com could test technology and strategies that it could offer or recommend to other clients.

Among them: Sandwich boards with QR codes located on the walk from the parking lot to the gate, allowing fans to use their devices to purchase tickets with a scan and a few clicks.

Since making it a priority, the Pelicans have increased online single-game sales from 12 percent to 42 percent. Doing so has enabled the franchise not only to communicate directly with fans in Myrtle Beach but learn more about the buying patterns of those who vacation in the South Carolina beach town.

When the Pelicans’ ballpark  naming-rights partner called, they listened and changed their approach to ticket sales.
Photo by: LARRY KAVE
While not as large in scale as Ticketmaster, Paciolan or Veritix, TicketReturn is the dominant player in its niche of minor league baseball, where its system is used by 76 of the approximately 140 affiliated MiLB clubs that sell tickets digitally, giving the company about 53 percent of all MiLB tickets sold last year.

The remainder of the minor league market is fragmented, divided among the other five companies licensed to sell online by MLB Advanced Media: Ticketmaster, Glitner Ticketing, Tickets.com, Etix and Veritix, the latter three of which have only a handful of teams between them.

In Class AAA, TicketReturn has 15 of the 30 clubs, while Ticketmaster has 11. TicketReturn dominates Class AA, with all 12 clubs in the Eastern League and more than any other provider in the Southern and Texas leagues.

“Whether it’s David vs. Goliath, or a small community bank against Bank of America, or us against Ticketmaster, you play it the same way,” said company founder Leroy Denton. “In order to win, you’ve got to be technologically on the edge, you’ve got to be able to respond in a moment, deliver customer service and offer a good price. And you start with the customers that (established competitors) don’t care that much about.

“If they need somebody to lend them $50 million, we’re not the people. If they want somebody who is with them every day making sure they succeed, that we can do.”

As its name indicates, TicketReturn was born of an idea that Denton came up with in 1999 after reading a story about his alma mater’s struggles to fill seats in its renovated football stadium. North Carolina had recently expanded its stadium, and the tickets sold well. But no-show rates were high. Denton surmised that the solution would be an easily transferable ticket, allowing season-ticket holders to return their tickets so they could be reissued.

The owner of an IT consulting firm, Denton went to work with an engineer to develop a system that would allow the transfer of tickets by canceling and reissuing bar codes. Season-ticket holders would receive branded cards that could be scanned for entry. They would then have control of the tickets, which either could be returned or emailed to friends.

It’s common now. But at the time none of the major ticketing companies were doing it, Denton said. He shopped the idea to venture capital firms for two years but couldn’t raise the money. So in 2001, with the tech economy in the dumps, Denton decided to fund the project with about $2 million of his own money.

TicketReturn.com has developed novel ways of selling tickets to fans walking to the gate.
Photo by: LARRY KAVE
With three partners from his consulting firm and Hirsch, Denton launched TicketReturn, a company whose sole intent was to provide a ticket-transfer service to college athletic programs and pro teams. Their first large-scale sales pitch, led by Hirsch, came at baseball’s winter meetings. There, Hirsch saw an immediate hurdle. Teams liked the idea of transferable tickets, but they couldn’t segment it away from the deal with their ticketing provider. The universities Hirsch approached faced the same problem.

For TicketReturn to provide its transferable ticket, it would have to build a system that also handled the standard services of a traditional box office. Still, Hirsch came away with his first customer, the Peoria Chiefs — under the condition that Denton and his programmers could build a full-service system in six weeks, and do it for less than Ticketmaster had quoted for the same service.

“We had multiple problems,” Denton said. “We were entering a mature market. We were facing three 800-pound gorillas, plus tons of other little ones. So you go into a mature market with three dominant players. Have you lost your mind?

“We had to play it just right in order to survive.”

After losing more than $1 million in its first five years, TicketReturn turned its first annual profit in 2008, Denton said. He is now close to breaking even on his investment, he said.

The company has grown by at least 10 percent in all but one year since launching in 2002, never growing by less than 7.5 percent, Denton said. Last year, with Pawtucket, Rochester and Fresno coming over and new ballparks opening in Charlotte and El Paso, revenue increased by 20 percent.

TicketReturn also has made inroads in college sports, though it does not come close to approaching Comcast-owned Paciolan. It works with a handful of mid-majors and small schools, most of them located in the Carolinas, offering ticketing across all their venues, no matter how small. While TicketReturn hasn’t landed a major conference program yet, it has made inroads, providing student ticketing at several large schools, including Tennessee, West Virginia and Virginia.

The core of the student-ticketing system is identification, making sure that only valid, enrolled students get access to tickets. At programs where demand for tickets frequently exceeds supply, the system runs multistage lotteries to determine which students get tickets.

Though its corporate address is in suburban Charlotte, TicketReturn does not operate from a central office. Its senior management is split between Charlotte, Greensboro, N.C., and Myrtle Beach. Employees are scattered across the country, working from their homes.

“We’re virtual, just like my consulting firm was virtual,” Denton said. “I’ve been a big believer that you don’t have to be ostentatious with a big office and a big sign. We have better things we can do with our money.”

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