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% sellers 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.
Ticket Exchange Screenshot – Price Floor
Source: ticketsnow.com/yankees
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 price on StubHub. Does that mean buyers will bypass Ticket Exchange, rendering the advantages moot? It’s all a matter of convenience and trust.
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 ticket solds via Ticket Exchange will be guaranteed. In other words, it’s buyer beware. According to a StubHub agent, the only thing guaranteeing Yankees’ tickets sold on its platform is the faith it 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 wan’t 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.
Comparative Listing: StubHub vs. Ticket Exchange
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’s 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.
As someone who has primarily bought tickets through StubHub in recent years, I’m a little disappointed with the switch. I understand the motivation for the move, but I have a feeling I won’t be going to quite as many games this season. I tended to scoop up the cheapest tickets available on StubHub (college budget) and hop on the D train from Fordham to get to games.
Like you said, we still don’t exactly know how the price floor works, so maybe the prices won’t increase as much as I’m anticipating. Still though, it’s clear a buyer like me is hurt by this new agreement. Ultimately, I wonder if this switch will ultimately have a material effect on attendance.
If the 35% floor is broad, it still means you can get tickets for half off when fees are included. That means hundreds, if not thousands, of tickets could be priced between $10 and $15. Is that so much higher than the SH $6 minimum that you’ll be priced out? I can’t answer that.
Although paid attendance won’t be impacted (these are secondary sales), there could be fewer people actually at the game, so it’s possible lost concession sales will offset other gains. I am sure the Yankees will be tracking that closely.
$10-15 is still more than fare just to get into a game, especially in my situation going by public transit. So I can’t say I’d be priced out. Of course I wish I could pay a little less, but I’ll still go. What I really should have said is that I may go to a couple less games, considering how the difference between SH and TE would add up.
I understand that the paid attendance won’t be affected. I just wonder if this will contribute to some of the empty seats that we saw toward the end of 2012. Yes, part of this can be blamed on the “moat”, but there were still a good chunk of other empty seats.
I suppose the largest affect would be to groups/families, where even just a $4-9 dollar difference between SH and TE could really add up (assuming minimum), when also considering parking and concessions. Maybe that could lead to some empty seats. Not that this is really a priority to ownership; as long as the tickets are selling initially, they won’t be overly concerned about the secondary market anymore given the 5% fee.
The counterfeit thing is way over played above. Stubhub will have an office across the street. If your ticket is no good all you’ll have to do is walk across the street and tell them. They will buy new tickets as good or better from another seller (no matter the price) and hand them to you, charging the original seller the price difference.
How will StubHub get the new tickets from another seller if they’re discovered as counterfeit one hour before the game? SH isn’t going to pay primary prices, and chances are if someone is running a counterfeiting operation, their listed accounts won’t be real either.
People leave tickets on consignment in their office and there will still be plenty of instant download PDF’s available. Stubhub is ruthless on sellers. They will pay whatever price need be to make sure their customer is at the game. They will also absorb prices to make sure they look good. The Oregon Auburn BCS game was a perfect example. They absorbed big losses but pushed those back on the sellers who shorted the game.
The buyer is always right and the seller is always guilty until proven innocent. They ask for you to provide a scan report from the venue to prove your tickets were valid as a seller. However no venue will ever release a scan report.
In Short yes Stubhub will make it right an hour before the game.
That’s not how the system works though. Anyone can put a listing on StubHub. Unlike Ticket Exchange, it does not verify the ticket’s authenticity.
Your confidence aside, if you do a search for StubHub and counterfeit, you’ll find lots of examples of fans who didn’t get to see their event because of this issue. StubHub does not guarantee you’ll get see the event; it only promises a refund if your ticket is counterfeit.
Also, SH’s system allows a buyer to become the counterfeiter. After buying on a StubHub, they can re-sell the ticket several times over and them claim themselves they were sold a counterfeit ticket. The result? The seller, who was honest, gets penalized, along with the other buyers who were scammed by the SH purchaser.
This is a real issue about which people using SH for Yankee tickets need to be aware.
[…] to that perceived impact, the Yankees decided to opt out of MLB’s deal with StubHub andform their own secondary market called TicketExchange. To this point, it seems as if the new venture has helped stem the extent of discounting, but there […]