A shock to the secondary ticket market
The pressure on the $15 billion secondary ticket market amid the postponement or cancellation of events across the country could be especially acute for smaller operators and companies that made recent, high-profile acquisitions.
With revenue for ticket resellers screeching to a halt, big marketplaces such as Vivid Seats and StubHub are now not paying resellers until after the event happens, said Tony Knopp, CEO and co-founder of TicketManager, a company that helps large corporate clients manage their bulk tickets. “That’s a cash crunch for a ticket broker who in the past would be able to take that capital and put it back to work on new tickets,” he said.
Knopp believes ticket prices to sporting events are going to drop significantly, and he expects marketplaces and resellers to adjust to this new reality.
“Not just on StubHub or Vivid, but across the secondary market with a lot of the smaller players that people don’t know off the top of their head, there are going to be massive layoffs and closures,” Knopp said. “This is too big a shock to that system for them, and there a lot of government programs out there — SBA loans and emergency loans — but it’s really difficult for those who are betting on inventory to get those kinds of loans.”
Knopp also referred to the unlucky timing for acquisitions including Endeavor’s deal for On Location Experiences in January and Viagogo’s $4 billion purchase of StubHub last month.
“They go buy StubHub and now they just lost a huge chunk of revenue in Quarter 2,” he said of Viagogo. “Same thing with Endeavor, they buy On Location Experiences and what gets lost in the news is that On Location Experiences bought PrimeSport and PrimeSport has the contract for March Madness. That’s a major piece of their business.”