The media has spent plenty of time describing the financial impact on NFL owners and players as a result of the current lockout. What has not made as much news is the impact a lockout would have in a broader economic sense, especially in the secondary ticket market.
Football ticket sales on the secondary market comprise a large portion of revenue that is created by this industry. Using TiqIQ’s average ticket price data from the 2010 regular season, as well as NFL teams average attendance; we determined that a full season lockout would cause a $264 million loss in the secondary market. If the average resale margin on tickets sold is 25 percent, that’s a $66 million direct hit for fans. The five teams that would generate the largest losses to the secondary market in order are the Saints, Bears, Giants, Ravens, and Patriots. Teams that would generate the lowest expected losses are the Raiders, Lions, Buccaneers, Bills and Browns.
We determined this impact on the secondary market by taking the average number of tickets sold for each team (approximately 10 percent of each team’s attendance) for all regular season home games. We then multiplied that by each team’s average ticket price on the secondary market. The final number for each team is representative of the possible amount lost within the secondary market if the entire regular season is not played.
This would have a major impact on the industry, to say the least. Consumers have a budget to spend on discretionary entertainment each year. If the NFL does miss some or all of their games, a lot of discretionary income will be available for other activities. Where consumers decide to spend this extra money will be the question brokers and executives at secondary ticket marketplaces will be trying to determine. Obviously people could decide to take this discretionary income and spend it on other things, but if they do decide to buy tickets to other entertainment events there are a few logical choices. Concerts and theatre performances could see an uptick in secondary ticket market activity if there are some games missed, but the major recipient of increased activity would most likely be College Football. Fans will be looking to get their football fix from somewhere, so college football tickets could be in great demand causing prices on the secondary market to increase dramatically. Obviously if the lockout is prolonged, NBA (if their labor issue is settled by then) and NHL tickets on the secondary market could also be much more in demand.
We are still a couple months away from the NFL having to decide whether or not a full season will be played. Until then, brokers and secondary market ticketing companies should have contingency plans in place if this major blow to the market comes to fruition. College Football, concerts, NBA, and NHL tickets are likely places consumers may spend their additional disposable income depending on how lengthy the lockout is. The secondary ticket market is just one sector of many in the economy that will be hit hard financially if the owners and players do not come to an agreement.
Jesse Lawrence is the founder and CEO of TiqIQ, a leading event ticket aggregator that works with major boards as well as directly with sellers. TiqIQ distributes tickets to their network of over 300 publishers that ranges from the Washington Post to SB Nation and hundreds of other locally-focused fan sites.