Ticketmaster CEO Nathan Hubbard appeared on GRANTLAND.com’s “The B.S. Report” last week and addressed the ticket market industry. Every sports team has the issue of some season-ticket holders being brokers, and Hubbard said, “They buy them, on 20% of the games they can make back their money, and then they have no incentive to do anything but dump the rest of the games. If you’re a fan, you’re walking up to the box office saying, ‘Hey, I want a seat in the bleachers,’ and they say we’re all sold out, and yet no one is coming to those games in those upper deck seats because those tickets have either been dumped or thrown away. So the cyclical issues of the core pricing problem in sports … is affecting the fan experience, it's affecting the teams. … The season ticket is under attack, and for a fan, the secondary market has created great transparency around what the actual value of each individual game is.” Hubbard noted it is a “scary proposition” for teams that people have stopped buying season tickets and just try and pick the best games to go to because they have no use for season tickets. Hubbard: “The question is … can they now start to think about how to personalize the experience for everyone? We talked about the industry stumbling into being an e-commerce business. … The future of the Web is sort of bending the Web around each individual, personalizing the experience online. … Bend everything around you so you’re always logged in, wherever you go, we’re serving you up content, we’re serving you up things that are relevant to you because we know you, we’ve fingerprinted you as a user, as a fan.” Hubbard: “Some of these sports teams, we think about them as these huge, big global brands. … Most cases, they’re not. They’re sometimes really dysfunctional family businesses. … What that means in practice is the way that they think about profiling their fans has not been particularly sophisticated.”
SECONDARY MARKET: Hubbard noted the secondary market is about a $4B business, and there is a “massive growth opportunity if they can just figure out how to price their inventory right.” Hubbard: “We as an industry are like the last Wild West frontier that doesn’t set the price at the intersection of supply and demand.” Hubbard said the “secondary market, I think, is a totally legitimate distribution channel. It’s a way for teams to shift risk. I just think they’re shifting too much risk and I think it’s starting to eat at their core business and a lot of them know that, and we’re helping them start to sort through that.” He said the first step is something like the NFL Ticket Exchange, which Ticketmaster powers. Hubbard: “It’s safe, you trust the brand, and it’s pulled a significant share away from the rest of the secondary market. … It’s safe, it’s league-approved, and the teams all participate in that.” Hubbard said more pro leagues likely will “step up and say, ‘This is our brand, we’re going to continue to build our brand’” (“The B.S. Report,” 10/20).
GOING IN DEPTH: The secondary ticket market is explored in this week's issue of SPORTSBUSINESS JOURNAL, and SBJ's King & Fisher cite sources as saying that "almost 8 million MLB tickets" were sold on StubHub this season, an "increase of almost 2 million over last year." StubHub sales "rose for at least 25 of 30 teams." And while the gap between the "busiest and slowest sellers was vast, on average MLB clubs watched about 3,000 tickets per game, or about 10 percent of their average gate of 30,000, move on StubHub" (SPORTSBUSINESS JOURNAL, 10/24 issue).
