Picking Splinters: More to Partnerships Than Just Profits

September 6, 2006 10:00 PM0 comments

StubHub.com, which was recently named the fastest growing private business in the country by Inc. Magazine, has recently gained the media limelight for partnering with several local professional sports franchise. For the most part, the articles, such as one in the July 24 edition of the Washington Post, paint a rosy picture for all parties involved. Season ticket holders now have a legitimate place to dump their unused tickets. Teams, including area partners like the Redskins, Capitals and Wizards, can get a piece of the second-hand ticket market. And fans will have better access to previously unavailable tickets and sold out games. But there is another side to this everybody-wins equation — fans that don’t sleep in a vault of money like Scrooge McDuck get screwed.

Okay, that might be a bit of an exaggeration. The necessary commodity to obtain tickets used to be time spent waiting in line, now it is almost exclusively money.

Now, with teams aligning with these businesses, the only guard against ticket speculation are flimsy state laws, and as a result, prices may increase at an accelerated rate.

Concerts, particularly those held in smaller venues, are highly prone to this behavior. Tickets for the just-announced Alice in Chains show at 9:30 Club are going for upwards of $100 dollars on StubHub, never mind the fact that face value is merely $35. Not even Google stock can boast that kind of quick return.

Keeping this in perspective, with so many seats in sports stadiums, resold tickets are still the vast minority. For instance, StubHub is currently offering 1558 seats for the Redskins’ home opener against the Vikings on Monday, Sept. 11. That’s just under two-percent of total tickets.

The larger effect could come if teams like the Redskins, who sell out every game, see their tickets re-selling for noticeably higher prices.

“If I were a ticket manager and saw that [second-hand sellers] were getting much higher prices, I’d think about raising prices,” says Arizona State Professor Stephen Happel, who studies the second-hand ticket market and was also interviewed for the Post’s piece. Specifically, he believes, there will be upward pressure on the cost of season ticket packages. And why not? If teams know they can move these tickets, at least to scalpers reselling on StubHub, then why shouldn’t they pursue a price that demand dictates?

Now, without individual teams attempting to curb ticket speculation, the only thing truly restricting ticket prices is the demand curve — demand that has been growing due to ease of cross-country travel and online ticket purchasing. With the popularity of the NFL spiking and both the NHL and MLB reporting attendance records last season, that demand curve is unlikely to push prices back down any time soon.

It is not likely that the average fan will feel the effect of these partnerships this year or anytime soon (though Skins tickets did rise an NFL-high 17.2 percent this season), and it will be worse for Skins fans than for those of lesser-draws like the Capitals and Nationals, but with nothing to artificially check the trend of rising prices, soon regular season games could carry playoff prices.

A fan of the free market system, Happel has no qualms with this new era system, nor should any true fan of capitalism. Any sports fan knows that money is what drives the sports machine. However, any sports fan knows there are non-monetary issues at work here as well.

There is something about the nature of athletics that resonates with the working class and that needs to be preserved. High priced luxury suites and low-level boxes might bring in the funds necessary for teams to compete, but they also attract a bevy of jokers who spend half the game on their cell phones, blabbering about their foreign cars or other forms of overcompensation.

When you think of a “fan” you think of Fireman Ed or the Hogettes or the loonies that comprise the Black Hole, you don’t think of some Dolce-suited dweeb chirping about his portfolio into his blue-toothed Treo. Sports teams might want the big bucks, but they should also crave fans who are willing to brave four hours in sub-zero temperatures just to get the privilege of losing their voice while worshiping their favorite team in person, not just some suit who requires a triple-shot, soy, low foam macchiato to guard against a 50-degree “chill.” You think Captain I-Banker is going to stick with your team after a 1-15 season? Sell, baby! Sell!

Fortunately, public image still plays a roll in this process, and after citing examples from the late 90s when teams chased after high-dollar corporate clients only to be burned by the early-millennium depression, Happel can’t fathom a team not giving its lower income fans at least the opportunity to wait in line for tickets. Whether those tickets will continue to be reasonably priced is another issue.

Regardless of these recent partnerships, so long as money is a main influence in the sports world and demand continues to rise, as Happel aptly puts it: “The poor are going to get screwed one way or the other.”

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