A few months back when the Yankees first announced plans to opt out of Major League Baseball’s secondary market agreement with StubHub, I suggested that early critics withhold judgment until after the details were released. Well, the Yankees have finally gotten around to unveiling its new relationship with Ticketmaster’s Ticket Exchange, so it’s time to take the gloves off.
From a seller’s perspective, the new market appears to be more favorable, provided the tickets are offered through their season plan account. Whereas StubHub charges a 15% seller's commission, the Yankees will only take 5% from their licensees. However, tickets sold through Ticketmaster will carry the same 15% commission if the seller is an individual holder.
Another advantage to the seller is a price floor. Although initial announcements suggested that a price floor had not yet been established, a call to Ticketmaster confirmed the Yankees would be setting a minimum price. The Ticketmaster agent could not confirm whether a flat rate would be used for all sections, but an early test drive of the system revealed an $11 minimum listing on a $31 spring training ticket, which equates to a discount no greater than 65% of the primary cost. It should be noted that the Ticketmaster agent was unsure whether the Yankees are using a rate-based system to establish its floors. As a result, it’s possible the $11 price floor indicated in the screenshot above is a flat figure. However, the agent also stated that most Ticket Exchange partners base their floors on a percentage of face value, and this seems to be a common sense approach.
Normally, tickets sold for only 35% of face value would be considered a bargain, but StubHub has set the bar high, or low, depending on one’s perspective. For sellers, the price floor has the potential to provide a reprieve from bargain basement listings on StubHub, which in some cases have amounted to pennies on the dollar. Of course, just because the Yankees have opted out of their agreement with StubHub doesn’t mean those listings will go away. In fact, a quick scan of available inventory reveals more tickets and cheaper prices on StubHub. Does that mean buyers will bypass Ticket Exchange, rendering the advantages moot? It’s all a matter of convenience and trust. (Manager's Note: StubHub is reportedly planning on opening a ticket office across the street from Yankee Stadium in response. Yankees COO Lonn Trust says it's illegal, but we shall see.)
The biggest change resulting from the Yankees’ switch is their tickets will now be integrated into only the Ticket Exchange system. That means instant delivery and download will no longer be available on StubHub, and only tickets sold via Ticket Exchange will be guaranteed. In other words, it’s "buyer beware." According to a StubHub agent, the only thing guaranteeing the sale of Yankees tickets on its platform is the faith the site has in its customer community. That may make StubHub sleep well at night, but those who have their heart set on attending an event probably need a little more assurance. After all, while StubHub does guarantee a refund for counterfeit tickets, it does not ensure attendance at the event. Considering this dynamic, it’s no surprise that Yankees’ owner Hal Steinbrenner made the security issue a primary selling point when announcing the deal.
"It is unfortunate that unscrupulous resellers utilize deceptive practices and tactics and employ unofficial websites, all of which give rise to counterfeit tickets. Fans must be careful when purchasing from unauthorized websites as the tickets they are purchasing from the unauthorized resale websites could be counterfeit, stolen, or otherwise void and as such will not permit the purchaser to be admitted into Yankee Stadium. We encourage fans to post and purchase tickets only through ‘Yankees Ticket Exchange’". – Hal Steinbrenner makes his sales pitch in a team-issued press release.
Authenticity isn’t the only wrinkle that could benefit sellers. Because of the time needed to FedEx tickets, the effective cutoff becomes at least two days, allowing sellers an interim period during which to seek a higher price on StubHub before shifting to Ticket Exchange, which will halt sales three hours before game time. Although StubHub sellers can get around the FedEx problem by generating PDFs from their season ticket holder account and scanning them into the system (allowing for e-mail delivery), those tickets could still be counterfeit. So, if buyers want to purchase tickets on game day with full assurance of authenticity, Ticket Exchange could wind up being their only source.
Unfortunately for buyers, Ticket Exchange is not as attractive an option, even though it will charge the same 10% commission on sales. Compared to the $6 minimum for tickets sold on StubHub (which isn’t a floor, but the cheapest listing when required fees are included), the minimum price on Ticket Exchange should be much higher. Also, the three-hour cut-off window is slightly longer than StubHub’s, giving late deciders less of an opportunity to score a bargain. In addition, whereas all fees and charges are now integrated into StubHub’s listings, Ticket Exchange still includes them separately on the checkout page. As a result, when comparing listings, Ticket Exchange prices will be deceptively low.
Note: The top screen is from Ticket Exchange for tickets listed on the main page at $19. The bottom screen is from StubHub for tickets listed on the main page at $19.60. Source: StubHub.com and ticketsnow.com/yankees
In summary, season ticket holders should be very pleased with the new Ticket Exchange platform. At worst, they can still sell their tickets on StubHub, while the best case scenario augurs for increased re-sale prices and lower commissions. Individual game sellers come out about even because while they don’t enjoy the commission discount, if customers migrate to the security of Ticket Exchange, they too should see higher re-sale prices. The losers in the switch are buyers, but only relatively speaking. Even if a 35% price floor is established broadly, that still makes a large portion of the secondary market inventory affordable. Obviously, fans used to snapping up last minute tickets for peanuts won’t be happy with the new arrangement, but that seems like a small price to pay for fairness.
It’s easy to dismiss the concerns of season ticket holders, but the StubHub platform had become too tilted in the buyer’s favor. Ticket Exchange isn't perfect, but it does level the playing field some. The system could also help stem the tide of short sellers (i.e., those who list tickets they don’t have), whose aggressive cost cutting and use of decoy tickets is suspected of driving prices lower. These benefits won’t be enough to stave off the storm of criticism from fans who had grown accustomed to bargain basement ticket prices, but ultimately, the Yankees had to answer to those who foot the bill. With Ticket Exchange, they've taken a necessary first step. What else can they do? A loyalty program for all season plan holders (not just full licensees) would be nice, but that’s a post for another day.