May 18, 2009

Sports bubble watch, mid-May edition

Pete Toms at Biz of Baseball alerts us to a Sports Business Journal article examining the sports ticket glut on the resale market:

"There is so much inventory out on the markets right now, particularly for baseball," said Mike Janes, co-founder and chief executive of FanSnap, a Bay Area-based startup that acts as a metasearch engine for secondary tickets. More than 15 million tickets are accessible through the site, and the majority of those tickets are for sporting events. "I joke now that you're going to pay more for your beer or your parking to go to a game than your actual ticket. Heck, you could pay more for your large mocha latte. But we're living in a very, very different world now."...

StubHub, perhaps the most dominant and recognizable player among all American ticket resellers, says the average sales prices for sports events on the site is $81, down 9 percent from the same time last year [see chart, page 14] and 28 percent below 2007's full-year figure of $112. Independent sellers, similarly, have seen prices fall 10 percent to 15 percent over the past 12 months, and profit margins drop from the 20-30 percent range to around 10 percent. Industry estimates point to as much as 40 percent of all ticket inventory currently available on the secondary market being listed at or below face value.

SBJ reports that much of the ticket glut is due to "individual sellers" — in other words, regular fans, not ticket brokers or professional scalpers — who have increased the number of tickets they're listing this year. This raises again the question: What happens next season, when fans realize that rather than rushing to get tickets to go on sale, they can get a better deal waiting to buy at a discount on StubHub later? The first signs should be visible this fall, when the NBA and NHL become the first major sports leagues to go through a full season and then a preseason sales cycle since the economy fell over and broke last fall.