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Dodgers Fail to Sell-Out World Series, Secondary Market Consolidation to Blame
4 ticket brokers (Renaissance Ventures, Broadway Hospitality Group, Venue Kings Ticket Brokers and 714 Tickets) have filed suit against the Dodgers alleging the franchise manipulated pricing on the secondary market for World Series tickets, by steering all available inventory (26,000 seats) to a single partner. The lawsuit claims that prior to the ’18 season, the Los Angeles baseball club prevented the plaintiffs from purchasing tickets and chose Eventellect as their exclusive secondary ticketing partner; moves that essentially eliminated all of Eventellect’s competition on the secondary market, artificially driving up the cost of tickets for fans. The suit goes on to accuse the Dodgers of taking kickbacks from Eventellect, with the club receiving the “majority of the profit” each time a ticket is sold. The Dodgers and Eventellect will answer the lawsuit (which does not seek specific damages) in a Los Angeles Superior Court later today.
Howie Long-Short: The 2017 World Series was “probably the most lucrative event for ticket brokers ever” and the likely catalyst for the current consolidation trend within the ticketing industry (certain to result in decreased ticket sales). There’s a belief that by working exclusively with a single broker (as opposed to hundreds), teams can recoup the 10-15% (broker profit) they’re leaving on the table (in a best-case scenario), but there is no reward without assuming risks and as Mike Guiffre, SVP of Business Development at SuiteHop and a 20-year veteran of the ticketing industry (on both primary and secondary sides) explained, “professional brokers work on slim margins over the course of a year and take a lot of losses. They partner with many teams knowing there will be a lot of losses, but banking on a handful of teams or big games to create a positive margin overall. It is not as simple as buying for one dollar and selling for two.”
It’s been estimated that Eventellect paid nine-figures to become the Dodger’s exclusive secondary ticketing partner, so the risk the Dodgers assumed in this deal wasn’t financial, but that the tickets allotted wouldn’t sell; and that’s exactly what happened. If you watched the World Series over the weekend, you likely noticed thousands of empty seats for each of the 3 games; odd, considering the franchise drew 5,000 more fans/game (47,042) than any other MLB franchise in 2018. So, what happened? The Dodgers chose not to sell World Series tickets directly to their fans, listed all available seats (controlled by Eventellect) on StubHub and outpriced the market; at least one ticketing guru projected Game 5 have more open seats than any championship game in modern Big 4 sports history.
So, what should the Dodgers have done to ensure every seat was filled for Games 3-5?
Mike: “With the short window for playoff game sales, selling more up front is the best strategy; not just to brokers, but pricing for more package sales from individual or business consumers. You are trading risk for upfront money instead assuming risk for FOMO on some “potential” revenue and can get drive more revenue per ticket by allowing the resale to work itself out in.”
Fan Marino: The 2018 World Series has disappointed from a TV ratings standpoint; Commissioner Rob Manfred has acknowledged as much. Despite featuring 2 of the league’s marquee franchises (and cities), ratings for every game (through Game 4) have been down versus last year’s World Series; Games 1 and 2 were down -10% YoY, while Games 3 and 4 declined -8% YoY. Unfortunately, it doesn’t sound like MLB has the answer to turn it around, either; Manfred said they’ve been unable to “isolate a cause” as to why fewer fans are tuning in.
If sophomoric humor is you’re thing, here’s a ticketing story for you. 50 Cent recently bought 200 duckets (at $15/per) to an upcoming Ja Rule show, not to see his long-time rival perform, but so the seats in the front would be empty!
What is JohnWallStreet?
JohnWallStreet, located at the intersection of sports and finance, is a destination for the educated sports fan.
While we won’t be publishing “hot takes” on LeBron’s relative greatness to Jordan, we will be offering up the most relevant sports related business news, in easily digestible bites, with commentary from both the sports money and sports fanatic perspectives.
We’ll cover publicly traded professional teams & stadiums (MSG, RCI, BATRA, MANU), television networks (DIS, FOXA, CMCSA, CBS, TWX, MSGN), apparel & footwear companies (NKE, UAA, ADDYY, FL, LULU), equipment companies (GOLF, ELY, FIT), ticketing companies (EBAY, LYV) content and facilities providers (CHDN, DVD, ISCA,TRK, LMCA). If it trades on Wall Street, and has a sports angle, it’s in our wheel house.
Howie Long-Short and Fan Marino will be providing their expert opinions on each story. They have slightly different areas of expertise. Fan Marino is a firm believer that the SEC is the premier football conference. Howie Long-Short knows it as the Securities & Exchange Commission. Fan Marino lives and dies with the college selection of 5 star, blue chip recruits. Howie Long-Short spends his days analyzing blue chip stocks. Howie Long-Short knows that Black Monday occurred on October 19th, 1987. Fan Marino swears it happens every January after Week 17. You get the point.