The resale of tickets for sporting and entertainment events has seen significant changes in recent years, and it’s feasible that 15 to 20% of the tickets for a given event may have been obtained through resale. This resale through the secondary-ticket market, such as Ticketmaster’s TicketExchange, StubHub or various aggregator websites, is becoming an increasingly popular way for fans to sell and buy tickets.
As with many things, it centers around supply and demand. If there is a strong demand, ticket prices will increase, and if demand wanes, prices decrease. None of this is new, and the Capitals and Wizards live it every day this time of year. Capitals tickets are in demand – higher for some games than others – and the supply is limited. At this stage Wizards tickets simply do not command that same demand, so there is more supply.
The secondary-ticket market has become an increasingly common avenue for season-ticket holders to use in an attempt to sell tickets – either because they are unable attend a specific game or perhaps they want to take the ticket they purchased at a discount and sell it for a profit. On the Capitals side, the secondary market is extremely active for the higher-profile games. Already this season we have seen plan holders resell a ticket they purchased for $27 and sell it for more than $100. That’s just the price we can verify through TicketExchange, others likely are sold for more. Conversely, from the Wizards perspective reselling those tickets may end up being less than the gate price but it usually matches or exceeds the season-ticket holder price. Again, it comes back to supply and demand. This is a similar position that the Capitals found themselves in not too long ago.
We track this type of reselling information daily through Ticketmaster as well as visiting other ticket resale websites. The NHL and NBA also provide us with data. So we constantly examine ticket pricing and also adjust our ticket prices through our own dynamic pricing model for individual game tickets. Here’s a quick Wizards example against Minnesota: the original gate price is $80, our dynamic pricing was adjusted to $70 and the season-ticket holder paid $52 for that seat.
As demand increases and supply decreases – such as with the Capitals – dynamic pricing has the opposite impact. Here is a Capitals example for a ticket against Pittsburgh: gate price was set at $110, the dynamic pricing was adjusted to $125 and the season-ticket holder paid $44. By the way, the average selling price on TicketExchange was $116.61 and an aggregator site had an average listing price of $165.12 for that same price class seat.
Recently some media and fans have focused on tickets available online for less than a dollar, and in one case there was a Wizards ticket that was available on the secondary market for 30 cents. That certainly is the right of the ticket holder – he or she can attempt to sell the ticket for whatever price they want. Interestingly, and perhaps not coincidentally, the 30-cent ticket was for a game that we offered our plan holders additional complimentary tickets for friends, family or business associates. It’s an attempt to have our season-ticket holders, frequently our best brand ambassadors, introduce our team to someone they know. So it’s certainly conceivable that a fan obtained a comp ticket and wanted to make a statement by posting it for 30 cents. I don’t know if that is what actually occurred, but it is feasible – perhaps reasonable – to assume.
In contrast, data for that exact Wizards game on a ticket aggregating site showed the most popular ticket being sold online was one that carried a $30 gate value, was sold to season-tickets holders at $16 and had an average online posting price of $42.52. So while we know the actual average selling price was lower than $42, my assumption is that it was slightly higher than 30 cents. So while the 30-cent ticket was sensationally priced – it does grab your attention, which I guess was the idea – but it doesn’t accurately reflect the overall market for tickets.
Remember, it’s easy for fans or media to show an image of empty seats to help illustrate a preconceived storyline, but on average that’s only 25% of story. What happened to the remaining 75%? Honestly, I would be a little skeptical of someone who elects to share just 25% — I would rather have the entire story and then it would be up to me to make a determination on what I should think and feel. But perhaps that’s just me.
Yes, we want the Wizards to perform better and improve, but I’m excited about our ticket growth. We have one the fastest-growing season-ticket bases in the NBA. We now have approximately 8,000 season tickets and aggressively sell suites, partial plans and group and individual game tickets at more than 7,000 per game. Our strategy – like it was with the Capitals – is to sell the lower bowl first, and thus far we have sold about 75% of that inventory. We sell “owner’s seats” from $1,500 for a full season up to $2,500 for an individual game. Verizon Center is one of the top arenas in the country in terms of suite lease sales. The response from our business community has been exceptional, and we have sold 95% of our available inventory. For the record, we purposely hold back a number of suites for individual event rentals. Our average attendance is a little more than 15,000, an increase from last year at this time. Yes, plenty of work to be done, but we have made great strides and are building a solid foundation.
I recently held an hour-long pregame discussion with some of our plan holders, and invited their questions, concerns and comments. It was good to hear from them and gave us an opportunity for a two-way, face-to-face discussion with our important stakeholders. They truly are our partners in this rebuilding process. They asked tough questions, but their level of passion helps to fuel our desire to improve. Those types of interactions are important not only for them but also for us. We have a strong, growing fan base, and I’m extremely pleased with our progress.
