Reporting by the Toronto Star in a bombshell piece timed for Major League Baseball’s opening day confirms that teams profit wildly from ticket resale, particularly through restricting fans to a single marketplace in exchange for a cut of the profits. The reporting confirms what common sense (and industry insiders) have always indicated: teams enter these partnerships to enrich themselves, rather than any level of fan convenience, security, or any other platitude that teams espouse when they attempt to throttle the rights of consumers choosing whichever marketplace they would like to move tickets they don’t need.
The primary focus of the article is that teams get a cut of ticket resale, which seems relatively self-evident (why on earth would they insist on exclusivity – and at times even threaten their own fans in the name of it – if they weren’t getting a piece. But the real bombshell lies further down the page, when a StubHub official confirms that teams scalp their own tickets directly.
“There have been instances in the past where some teams have used us as an alternative distribution channel,” StubHub head of global communications Glenn Lehrman told The Star, though he declined to confirm (but did not deny) the Blue Jays’ specifically employing the tactic. “It’s something we would encourage teams to do.”
The Star’s report found that at least 20,519 tickets to opening day – nearly half of the stadium – were posted for sale on resale platforms in the past two months, at a markup of some 205% of face value. Lehrman discussed the financial windfall teams reaped through these exclusive partnerships. “They do very well, let’s put it that way… It’s absolutely added revenue for them.”
Predictably, fans and consumer experts quoted in the piece slammed the teams profiteering on the resale of tickets – particularly tickets which bypass the primary market altogether – as unethical.
“That is totally misleading and increases the cost to consumers,” said Richard Powers, an associate professor at Rotman School of Management at the University of Toronto. “Getting in bed with the secondary market who they fight against all the time in every other venue, it just seems unethical.”
While the Blue Jays declined to comment for this specific piece, team president Mark Shapiro said in a recent interview that Thursday’s home opener would be “the highest-revenue game in the history of Rogers Centre.” He was unapologetic about the team’s taking a cut of the secondary marketplace, saying “The secondary market is a fact, we will always even accept and even embrace a piece of that market.”
Market analysis by The Star showed that the team held back some 70% of the total tickets for Thursday’s home game, with only 13,000 seats ever going on sale through the team’s box office. More than 20,000 wound up on resale markets, though the report stipulated that the actual number of tickets to pass through the resale world was likely much higher, due to the difficulty in tracking and accounting for the whole ecosystem.
Some of these issues – the higher markups in particular – will be addressed by upcoming legislation in Ontario which caps the markup over face value of tickets sold through law abiding ticket resale marketplaces (though price caps of that nature have been known to simply push ticket resale to the black market, where consumers lose any vestige of protection from fraud). What won’t be addressed, however, is transparency in how many tickets are made available to the consumer at the box office. That provision was included in the original legislation introduced last year, but removed following a fierce lobby by companies like Live Nation, which argued that concert tours would simply skip the province if they were required to disclose the number of tickets held back for presales, promoter and venue allocations, or direct placement on the secondary marketplace.
While industry insiders have known for ages that teams, promoters, venues, and artists often use the resale market for direct profit while blaming it for any and all woes when the public complains about ticket prices, it’s rare to see an actual admittance of the practice. Read the full piece at TheStar.com – they did some substantial reporting on the topic.