From The Yankees To Louis C.K., The Ongoing War Against The Online Ticket Industry

When I was about ten, my family had the most American Fourth of July possible. After going to the Nathan’s Hot Dog Eating Contest, my dad decided we should drive to the Bronx and catch the 3pm Yankees game against the Red Sox. We parked the car and walked towards the Stadium; my mom and I then sat down on a bench while my dad disappeared into the crowd. A few minutes later he returned with tickets. It seemed perfectly normal then but, as years passed, I realized how he probably got the tickets: a scalper.

Since then, buying tickets has gotten a bit more easy and a bit less shady. Thanks to a convenient site you might have heard of, StubHub, fans can find buy tickets from other fans with the click of the mouse. They get a little money and you get to see the game (and maybe even score a discount). So why are the Yankees trying to stop fans from using the site?

On a most basic level, there are two ways that fans can buy tickets to a game, concert or other performance: official retail sale and a second-hand marketplace. Official retail can take a few forms, such as the official team website, distribution companies like Ticketmaster, or for those still living in the stone age, buying physical tickets from the box office. Usually, the team gets money the ticket actually costs and the distributing company collects service fees (about 10-15% of the ticket value.)

On the other end of the spectrum are ticket resale sites, such as StubHub. StubHub runs similarly to its parent company Ebay; a seller sets a price for the tickets they are looking to move and customers select a listing and buy. Supporters of the site say it’s a win-win for everyone. One party gets to move tickets they don’t want and potentially make a profit, while the other gets to attend the event they desperately want to see, even if it costs a little extra.

It should be noted, too, that StubHub is often home to great deals, such as NBA tickets for under a nickel. The money flows almost identically to the first model, only with a change of names. Here the person selling the ticket gets the money it is sold for and StubHub collects the service fees.

Entertainers have previously voiced displeasure with both ticket sales models, though. In 2009, Bruce Springsteen made two public complaints about Ticketmaster. First, he took issue with the fact that the site was automatically redirecting those looking to purchase tickets to his Working on a Dream tour to Ticketsnow (the company’s own resale marketplace). Springsteen viewed this as an attempt to trick his fans into paying inflated resale prices when retail tickets remained available.

“Last Monday, we were informed that Ticketmaster was redirecting your log-in requests for tickets at face value, to their secondary site TicketsNow, which specializes in up-selling tickets at above face value,” Springsteen said in a letter posted on his website. “They did this even when other seats remained available at face value. We condemn this practice.”

Ticketmaster’s merger with Live Nation, another giant in the ticket sales industry, also faced the artist’s wrath. ”The one thing that would make the current ticket situation even worse for the fan than it is now would be Ticketmaster and Live Nation coming up with a single system, thereby returning us to a near monopoly situation in music ticketing,” he wrote in the same letter.

In the summer of 2012, comedian Louis C.K. addressed the online scalping market place. Angered by seeing his $45 tickets resold for up to $518, he made a statement striving to protect his fans from being exploited. In addition to refunding scalpers’ money, so he could resell the ticket to someone who intended to use it, the comedian also addressed the issue of scalpers to Laughspin.com:

 “We are learning that, of these few tickets being scalped for my tour, some are the same tickets across a bunch of different sites. They are sharing tickets.

Our goal is to get even these 500 or less tickets back into the hands of fans at their original price.  How we are doing that is our business that I won’t share right now.  But so far our plan is working and we have learned a lot.  The main message I’d like to convey to ticket-buyers out there is that buying a scalper ticket to one of my shows is a tremendous risk (well, a risk equal to how much you paid for it)

Contact with these scalpers has been enlightening.  They tend to respond with indignance and a defensive posture, “Hey man!  Scalping is NOT a crime!”  We’re not treating it as a crime or even a wrong-doing.  We are just competing with them, on behalf of my fans, to enforce the terms and conditions of our ticket sales and to keep the prices down.  It’s worth the effort, it’s working and it’s even been kind of fun.”

The Yankees are not motivated by protecting their fans, though. Taking a very Yankees attitude, they are concerned about losing profits. Over the past few years, they have blamed StubHub for the decrease of attendance as fans buy cheap resale tickets instead of patronizing the box office. Rather than addressing the true issue — the exorbitant price of tickets — the Yankees are shifting the blame.

Recently, the Yankees have opted out of Major League Baseball’s official partnership with StubHub. Going along with this, they have announced intentions to only accept physical, official tickets. The majority of tickets sold on StubHub are electronic tickets, essentially nothing more than a bar code and seat information that can be emailed and printed instantly. StubHub plans to get around this by opening a pick-up storefront near Yankee Stadium. They have a physical storefront in Manhattan, as well as pop-up stores at large events like the Super Bowl. Since fans will only be picking up already purchased tickets, the store will not run afoul with laws preventing ticket scalping within the immediate vicinity of the stadium.

Trying to not seem like total jerks, the Yankees are championing two benefits to their own resale site (Yankees ticket exchange, which is run by Ticketmaster). First, it will only assess 5% service fees, as opposed to StubHub’s 10-15%. Buyers on both sites will still pay a comparable commission on both sites, roughly 10% of the listed price.

It will also provide theoretically higher security, even though problems with fake/non-existent tickets on StubHub are rare (in addition to covered under a money-back guarantee). Yankees chief operating officer Lonn Trost explained to Newsday that unscrupulous fans can use StubHub like a futures market to turn profits. A seller could, for example, list ten tickets for $100 each without actually owning any. If they are purchased, he can then buy the necessary tickets and flip them for a profit.

Right now, there are still too many uncertainties in the Yankees ticket plan. Many suspect they will institute a minimum price floor that tickets can be sold at, but nothing has been announced. Additionally, even with reduced fees, the official Yankees ticket exchange is still more expensive than Stubhub. And there’s always hope that the Yankees could act like a decent organization instead of the heartless ‘evil empire’ they are frequently stereotyped as and adopt dynamic pricing, when the team adjusts their ticket prices based on factors like demand, game time, opponent, and pitching match-ups.

Either way, you’ll still be able to get to your game. It’s just a matter of how many extra dollars the teams can squeeze out of you.

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One Comment

  • Jeff Y
    February 21, 2013

    That is not how a futures market works

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