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Leagues and Governing Bodies

NFL to review options for primary ticketing

NFL owners agreed not to extend primary ticketing deals past 2017 to give the league time to study the market and perhaps create a new model for the 32 clubs.

The teams, some of which are grandfathered in because their deals already extend past 2017, learned of the move last week at the fall owners meeting in Houston. Each club signs its own primary ticketing agreement, and 31 teams have deals with Ticketmaster, while the Detroit Lions are with Veritix. All 32 conduct secondary ticketing in a Ticketmaster-powered NFL Ticket Exchange through a leaguewide deal. Ticketmaster’s league deal, renewed in 2012, runs through 2017 and is estimated to be worth in excess of $40 million per year.

While the decision to hold firm on primary ticketing agreements does not seem to indicate any overt displeasure with the current system, it is clear league executives want to see how the fluid space develops, as well as align the primary and secondary deals to hit the market at the same time.

“The idea is there is a lot going on in ticketing, a lot of new developments, a lot of new technologies, practices; so we are taking a broad look to see what the [landscape] looks like,” said Chris Hardart, NFL vice president of corporate development, who along with Brian Lafemina, NFL senior vice president of club business development, will play a leading role on the league’s study of the space.

“We want to get smarter,” he added, so the league decided to “stop the clock.” The clock begins again on March 31, 2017, for clubs to again strike primary ticket deals if a new league model has not been crafted by that point.

Despite the NFL’s heavy economic reliance on national TV deals and other pooled sources of revenue, local ticketing remains a critical lifeblood to the league.

Hardart declined to say if the league was looking at a particular model, but he cited MLS’s recent groundbreaking pact with SeatGeek as one the league has noted. MLS is allowing third parties through SeatGeek technology to sell soccer tickets in an open ticketing platform, bucking the long-standing sports league trend of teams and leagues enlisting one official provider of tickets operating in a more closed system. MLS was attracted to the option of having more outlets offering its ticket inventory and the ability to gather additional data on prospective customers.

“They just wanted to make sure that we are all acting in our own collective best interests,” Jimmy Haslam, the Cleveland Browns owner, said of the league decision to pause new primary ticket deals. “They are studying the situation and there are a lot of different options out there, and we want to make sure we maximize value for the league.”

Patrick Ryan, co-founder of ticketing services firm Eventellect, called the NFL moratorium on new ticketing contracts a wise opportunity to review the shifting industry.

“They want to make sure they remain unified, which is really smart,” said Ryan, whose firm works with 16 NFL teams. “They understand that for them, the whole is worth more than the sum of the parts.”

One team source said the league may open up the ticket distribution chain so it is not so limited. This source cited as an example watching a club video on YouTube that is accompanied by a ticket offer. That ticket could come from the club, Ticketmaster, a broker or a fan under a new model, this source explained.

Ticketmaster declined to comment. But industry sources said the industry giant was not surprised by the NFL’s move, particularly as lines between primary and secondary ticketing continue to blur or dissolve entirely through ventures such as Ticketmaster’s own TM+ or StubHub’s new deal with the Philadelphia 76ers.

Ticketmaster’s NFL ticket resale volume in recent years has steadily grown at double-digit percentages per year into a business generating roughly $500 million per season in gross sales.

The NFL and Ticketmaster have held some informal talks toward a potential renewal, sources said, but any sort of formal bidding process likely will not occur until after the league’s review process.

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