Every year I join about a dozen high school buddies and head out on an NFL roadie. Every year it’s a different team – with New England, Green Bay, Cincinnati, and Indianapolis being among the most recent destinations. Many of the tickets are VERY hard to get – particularly when you’re angling for a dozen or so in the same area of the stadium. But since we’re willing to pay a relatively high premium to to the re-sellers (or if you prefer, scalpers), we tend to get to the games we want. In the last few years, sites like StubHub have made this far easier than before.
But I’ve always wondered why professional sports teams have allowed such a large portion of their potential profits to be captured by these intermediaries – particularly teams that could sell out their stadium several times over at their current prices. The simplest argument has been that it lowers their risk – sell at a particular price, lock in the revenue, and let the re-sellers worry about whether the tickets will go for a premium or not. But my belief has been, and remains, that teams are “paying” far too much for this – and that some sort of “auction market” could make them a lot more money in the long-term.
In turn, I’ve recently come across a platform – OptionIT – that is a step in that direction. Instead of buying a ticket for a game, fans (or speculators) can purchase an option to buy that ticket at a later date – it functions just like options do in the stock market. If you assume that team itself will eventually get at LEAST face value for each of these tickets, by taking a cut of the option price they directly accrue additional revenue. And if the market becomes really active / speculative, it’s notable that the team could get a cut every single time the option is traded.
This will be an interesting development to watch. While some commentators are noting that this is “just another way for teams to rip you off“, it doesn’t bother me one bit. I really have no problem with teams charging what the market will bear, and given that every year I pay a premium well above face value for a ticket to one game or another, I’d rather have the money go to the teams themselves – particularly since a vibrant options market would likely give my road trip crew a lot more options for when and where we go…
