Operator of ticket options market says he could generate millions more for NFL
Next month’s Super Bowl will generate about $75 million in ticket revenue, a nice late-holiday treat for the league. But what if the league is just scratching the surface and could increase that amount to half a billion dollars — without raising ticket prices?
Such is the contention of Rick Harmon, whose company, Forward Market Media, sells options on tickets to big sporting events, including the February tilt in three weeks.
Fans pay a reservation fee at a point during the season to buy a Super Bowl ticket at face value. The fee fluctuates based on the possibility of the team making the final game. Only if the fan’s team makes it does the fan get to buy the ticket. If the team doesn’t make it, the reservation fee is lost.
Last week, the fee to book a San Diego Chargers Super Bowl ticket was around $350, far higher than earlier in November when the company’s site for the game launched — and when the Chargers weren’t one of only eight teams still playing that could reach the Super Bowl. For a top contender like the Denver Broncos, the fee was much higher: more than $1,800.
Last year, when the Orange Bowl hosted the BCS National Championship Game, it earned a sum amounting to $600 over face value for each of the 2,600 tickets it sold through Harmon’s options market, said Michael Saks, the bowl’s chief operating officer. That represents the money that came from fans who participated in the market by paying the reservation fees.
“We would have done more, but we ran out of capacity,” said Saks, noting that season-ticket holders at Sun Life Stadium (home of the Miami Dolphins and the venue that hosted the game) had first claim on the seats. “I would have put 10,000 tickets out there if I could have.”
Forward Market Media, which also ran options markets for this year’s BCS title game and Sugar Bowl, has a few hundred Super Bowl tickets it acquired through Ludus Tours. Fans can buy an option on the tour operator website, or at nynj.teamtix.com. Fans considering a trip to New York for the game also can buy options on hotel rooms, Broadway plays, the annual pre-Super Bowl Maxim Party, and even tickets to the New York Knicks’ game against Miami the night before the Super Bowl.
Since the site went live in late November there have been 325,000 unique visitors, 2.1 million page views and 6,066 transactions.
The NFL declined to comment on the venture, but sources close to the league said the idea of a forward market for Super Bowl tickets isn’t something the league hasn’t considered itself. The concept was kicked around in the mid-2000s, one source said, but rejected for fear of alienating fans who lost their reservation fees. The NFL also doesn’t like fans buying Super Bowl tickets through anyone other than the league or Ticketmaster, its official ticket exchange.
Harmon believes all the obstacles can be overcome, noting that an options market also would be a way to collect data on fans that would be useful to NFL brand partners. The company has done research that shows if 5,000 Super Bowl tickets were sold through the forward market, it would generate $34 million above and beyond face value. Getting to half a billion dollars would require all tickets to the game being sold this way, and while that would seem implausible, the possibility of more than 5,000 tickets being sold this way or hotel stays and tickets to other events being packaged with game tickets offers a glimpse at how this kind of revenue stream could increase.
After the Super Bowl, the next big thing for Forward Market Media is options for the Final Four, then hammering out a final agreement with the College Football Playoff, the new final of college football that will make its debut after the 2014 season.