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Volume 22 No. 2
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Two paths for World Series tickets

Dodgers are broker-friendly; Astros consolidate resales

The strong secondary ticket market for the World Series in both Los Angeles and Houston pointed to the fervent fan interest in both markets, with average prices ranging between $1,100 and $1,300 per seat. But interestingly, the teams are employing very different ticket resale strategies that have quickly become a heightened area of focus for all of Major League Baseball.

The Dodgers, playing in MLB’s largest ballpark with a capacity of 56,000, have long held a liberal stance toward ticket brokers. The club declined to specify its level of business with brokers, but some industry estimates point to a third of its season-ticket base of more than 35,000 full-season equivalents being held by brokers. The approach has helped make the Dodgers MLB’s top-drawing team each of the last five seasons, counting in the attendance figures even if the broker tickets are resold at a loss or unused. And many brokers stayed with the Dodgers for years, at times taking losses or just breaking even on some regular-season tickets, for a hot-market opportunity like the World Series.

The club’s strategy last week also fueled a potent mix of high supply and high demand for the Dodger Stadium World Series games that former Ticketmaster chief executive Nathan Hubbard tweeted it was “probably the most lucrative event for ticket brokers ever.” Several industry  sources said each World Series game in Los Angeles was worth a total of $15 million in profit to brokers, revenue that didn’t make its way back to the Dodgers.

First Look podcast, with a discussion of World Series tickets at the 16:25 mark:

Fans enter the gates at Dodger Stadium before Game 2.
Houston has taken a very different tack. It has consolidated its season-ticket sales to professional resellers through Eventellect, one of several ticket distribution companies quickly rising in stature and importance within the industry.

Terms of the Astros-Eventellect relationship were not available. But agreements between MLB teams and ticket wholesalers typically involve profit sharing on ticket resale revenue, exchanges of sales data, and controls over the amount of secondary inventory entering the market at a given point.

So instead of a ticket resale market that benefits other entities beside the teams and potentially presents adverse market scenarios, such as seats being resold for pennies on the dollar, clubs such as the Astros now gain both a financial benefit and a clear voice in how their local secondary market operates.

Other key players among ticket wholesalers and distributors include Dynasty Sports & Entertainment and DTI Management.

The Astros this postseason have also allowed their season-ticket holders to buy tickets at twice the quantity of their regular-season package, such as an account of four seats becoming eight this month, representing an unusual step among MLB clubs.

“They’re out there selling [excess] seats and making money. But we felt that was the right thing to do because they supported us when we were terrible,” said Astros President Reid Ryan, referring in part to their 2011-13 seasons that each surpassed 100 losses.

The two different approaches come as MLB is deepening its involvement in the secondary ticket market. The league is nearing a deal to extend its official relationship with StubHub for a third term (see story), and it is starting to look at various team deals with ticket distributors in a more holistic fashion compared to the current, more arbitrary team-by-team approach.

“We have no choice,” but to do so, said Bob Bowman, MLB president of business and media. “We do 72 to 75 million tickets a year on the primary market, another 10 to 11 million on the secondary market, and it’s really important to get all this right since ticketing is obviously a lifeblood for us. What that all looks like exactly, we’ll need to see. But the ticket consolidators I’ve met are really savvy business people.”

Bowman did not rule out some sort of larger partnership with one or more ticket distributors.

An estimated 10 of 30 MLB clubs have some sort of deliberate ticket distribution and resale strategy, a number expected to grow for the 2018 season, and several of those teams have consolidated the number of season-ticket accounts held by brokers. The Kansas City Royals, notably, dropped from 227 such accounts to two in the span of three years.

“It’s really helped us, giving us a lot of data and a lot more insight into an area that was behind the black curtain before,” said Mike Bucek, Royals vice president of marketing and business development, at the recent AXS Ticketing Symposium in Atlanta.

Several teams in other leagues, particularly the NBA, have similarly entered into partnerships with ticket distributors to gain data, controls and part of the revenue from their local resale markets.

Even the Dodgers said last week they are reviewing how they engage with brokers in the future as part of the larger review of the industry landscape.

“We’re all continuing to look at the data and seek out the best way to manage distribution and access, and our chief goal remains to get tickets in the hands of fans,” said Tucker Kain, Dodgers chief financial officer and managing director of Guggenheim Baseball Management.

A long-term goal for MLB will be to maintain a comprehensive view of the secondary ticket market, while still providing individual teams enough flexibility to respond to local conditions.

“I think what is happening in baseball is that these smart analytical executives are taking a sharper pencil to their resale plan,” said Patrick Ryan, Eventellect co-founder. “There is no perfect pricing nor [perfect] ticket distribution plan. Demand is too volatile and every team is too different for there to be a blueprint that works for every single team.”