Teams Look for Their Cut Among the Ticket Scalpers
Monday, July 24, 2006
In their endless search for more cash, the major U.S. professional sports leagues and even colleges are getting a piece of the ticket-scalping business, a multibillion dollar industry that until recently had been controlled mostly by small-time companies and street sellers.
NFL, NBA and NHL teams have partnered with Internet firms with names such as StubHub and RazorGator to reap a share of what is known as the "secondary ticket market," where ticket holders can resell their tickets, often at prices well above the price they paid for them.
The emergence of these new enterprises ends years of frustration for sports teams, which have watched as scalpers and brokers sold tickets for several times their value without teams being able to capture any of that market.
"Teams for decades were frustrated by the fact that they couldn't get any of those profits from the secondary market," said Stephen Happel, an economist at Arizona State University who follows the secondary ticket market. With the help of the Internet and entrepreneurs such as RazorGator's David Lord or StubHub's Jeff Fluhr, "they get a cut of this and it's more money in their pocket."
All four major professional teams in Washington now have an online ticket reselling presence, including the Redskins, who in the past have stripped season tickets from customers who resold them. A year ago, The Washington Post lost its tickets, most of which went to the newspaper's carriers, when the team alleged some had been resold.
"We had the Redskins a couple of years ago taking tickets from people who had big accounts," said Jeff Greenberg, owner of ASC Ticket.com, a ticket broker in Rockville. "We had them last year going on eBay to see that people were listing their tickets on eBay and taking them right away from people. But this story is a 180-degree switch. . . . They have teamed up with these people just to get a piece of this pie."
Karl Swanson, a spokesman for Redskins owner Daniel Snyder, said StubHub came highly recommended by other NFL teams and that the team has not changed its policy on the resale of tickets.
"We have never been concerned with individual ticket holders selling individual tickets," Swanson said. "Our concern has been with blocks of tickets."
Industry experts estimate the revenue potential from the resale market at around $2.5 billion. The money to the teams isn't big -- yet. MLB.com Chief Executive Officer Bob Bowman said the total revenue from online secondary ticket resales is less than $10 million across all 30 teams, but that number is expected to grow as teams try to decrease eBay's share of the market on the Internet.
Yesterday, there were more than 450 listings for Redskins tickets, despite the team's previous zero-tolerance policy, and more than 500 listings for Washington Nationals tickets on eBay.
"There's a lot of money to be made," said Greg Bettinelli, director of tickets for eBay. "This market is still in its infancy."
Teams benefit in a number of ways, from sponsorship revenue to creating a convenient outlet for fans to sell their tickets without leaving them in the drawer or giving them to charity.