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Volume 23 No. 17
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‘Zero-hour’ resales part of StubHub-MLB deal

Major League Baseball’s first agreement with StubHub in 2007 brought widespread industry shock and amazement over the league going into business with the then-upstart ticket resale marketplace. Its second deal in 2012 created plenty of angst among individual clubs over the heavy influence secondary ticketing had made on their businesses by then, and three teams opted out of the StubHub renewal at various points.

But for the third, five-year term, formally endorsed by team owners last week and running through 2022, there is nothing but good feelings surrounding the ongoing partnership with what has become one of MLB’s largest business partners.

The new pact, set to be signed in the coming weeks, contains several key provisions and modifications that seek to build upon the prior contract terms. Among them, according to industry sources, is a leaguewide “zero-hour” rule that will allow resales on StubHub up to first-pitch times for all 30 clubs, a concerted push to promote mobile-based activity. Another provision allows clubs to operate parallel resale markets, such as what the Boston Red Sox do with their Red Sox Replay.

A key element in striking the new deal has been MLB’s continued comfort working with StubHub senior leadership, particularly Scott Cutler, senior vice president of StubHub parent eBay, and Perkins Miller, StubHub North America general manager. That type of relationship did not exist with prior StubHub President Chris Tsakalakis. By this past summer, StubHub had fully integrated with all 30 clubs on ticket resales for the first time.

“This really improves upon the model we struck with them for the betterment of the industry,” said Randy Levine, president of the New York Yankees, who initially opted out of the StubHub renewal in 2012 and returned to them last year after the arrival of Cutler and Miller.

Financial terms were not disclosed, but StubHub’s first baseball deal was estimated to be worth nearly $60 million per year, when also including team sponsorships, with the second deal building upon that, and this third one expected to grow further. The Yankees deal alone with StubHub, also running through 2022, contains total financial guarantees to the club in excess of $100 million.

StubHub will continue to share transaction data with MLB, both in the regular season and postseason, with that information now also viewed by clubs as critical in helping set primary ticket pricing. And the company plans in the new term to be a more active participant with clubs in the day-to-day operation of their local resale markets.

“There are several things we can do with both technology and data to improve the experience for everybody in the baseball ecosystem, and help clean up the market,” Miller said.

Several individual clubs said they were particularly impressed with the robust ticket resales during the recent Houston Astros-Los Angeles Dodgers World Series. StubHub said its World Series business was among the best ever in both price and overall volume for baseball outside of last year’s championship run by the Chicago Cubs, with average resales frequently topping $1,100 per seat, even in the large capacity Dodger Stadium.

“You look at the numbers put up during the postseason, it was really eye-opening,” said Oakland A’s President Dave Kaval.