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Marketing and Sponsorship

StubHub makes a big move

76ers deal takes it into primary market

StubHub, the biggest name in secondary ticketing, is moving into primary sales, a move that’s one of the largest steps in the company’s 16-year history and a significant shift within the ticketing business at large.

StubHub becomes the 76ers’ official ticketing partner as part of the deal.
Photo by: AP IMAGES
The San Francisco-based company has signed a multiyear partnership with the Philadelphia 76ers and Spectra Ticketing & Fan Engagement to create a platform in which primary and secondary sales for the 76ers will be presented in a single user experience. Beginning with the 2016-17 NBA season, fans will be able to purchase seats through a 76ers-branded area within StubHub’s website and mobile application that also will be accessible through the team’s own website and the NBA’s leaguewide ticket portal.

StubHub’s chief rival, Ticketmaster, has offered a combined primary and secondary ticketing experience, TM+, to its clients since 2013. But unlike TM+, the new 76ers ticketing through StubHub will not designate listings as primary or secondary — instead just presenting all available inventory and the prices they carry. The platform will allow users to purchase from multiple sellers, covering both primary and secondary tickets, in a single transaction. The 76ers’ ticketing also will be supported by existing StubHub features such as buyer recommendations.

O'NEIL
“We’re now going to be talking to fans in one voice,” said Scott O’Neil, 76ers chief executive. “We’re agnostic as to where the ticket comes from. It’s simply about presenting all the options to the fan in a single source. I see this as a seismic development in how we interact with our audience. In a business where we grind and grind and grind, this is something really exciting.”

StubHub, which gains the designation of 76ers official ticketing partner as part of the deal, will provide all the front-end user experience as well as real-time market data back to the team. Spectra, the 76ers’ current ticketing provider and a longtime partner of StubHub, will support the back-end operations and inventory control in the joint venture.

“This is transformative not only to our business and how we think about our business, but also to the fan,” said Scott Cutler, StubHub president. Cutler was hired last April from the New York Stock Exchange, and the 76ers’ deal represents one of his most notable actions to date, ranking along with the removal last summer of all-in pricing that included all fees in listing prices but proved unpopular with users. “This is a big step in extending the notion of a truly open marketplace,” he said.

A former neighbor of O’Neil’s in Connecticut, Cutler worked extensively on the deal for StubHub along with Geoff Lester, the company’s global head of partnerships. Cutler is due to discuss the 76ers project later this month at Spectra’s annual PacNet ticketing conference in Newport Beach, Calif., along with his boss, eBay President and Chief Executive Devin Wenig.

Financial terms were not disclosed, but Dave Butler, Spectra Ticketing president and chief executive, said a structure was developed in which all three parties have incentives to drive sales.

The 76ers as of last week had the worst record in the NBA and ranked 28th out of the league’s 30 teams in home attendance. As the club continues what’s become a large-scale, multiyear rebuilding effort — buttressed by the hiring late last year of Jerry Colangelo, USA Basketball chairman and industry lifer, as a team adviser — the new ticketing system seeks to take advantage of industry trends further blurring the lines between primary and secondary sales.

“I sort of think about this like Kayak in travel,” O’Neil said. “The fan is looking for choice, options and simplicity first and foremost. And with this, we have the most choice and options in one spot, and built around our brand.”

An app will present all available primary and secondary inventory.
StubHub and Spectra, previously known as Paciolan, have already been working together for several years on dozens of electronic ticket integrations, particularly for Spectra’s collegiate clients.

“This is the next big logical step,” Butler said of the 76ers deal. “Being able to see everything in one place is something that I believe fans will love. I give Ticketmaster a lot of credit for TM+, but it’s not a truly seamless experience. Instead of just having inventory in one place, this will really be the same buying process and will have the most simplicity for the fan.”

Each of the parties involved said the focus now is on launching this partnership properly, not finding another team for a similar joint ticketing effort. The New Jersey Devils, who like the Sixers are owned by Josh Harris and David Blitzer and are run by O’Neil, would appear to be a next logical candidate, but O’Neil said the “total focus is on the 76ers” with regard to the combined ticketing.

The Devils are currently aligned with Ticketmaster.

StubHub’s move into primary ticketing also arrives as the company’s revenue has been publicly disclosed for the first time. The company has been owned by eBay since 2007, but following a reorganization in which sister company PayPal was split off into its own company, StubHub’s revenue has now been broken out publicly in documents with the U.S. Securities and Exchange Commission. The company posted $232 million in revenue for its fourth quarter, ended Dec. 31, 2015, up by a third compared with the same period in 2014, and $725 million in revenue for all of last year.

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