Ticket Resellers at the root of MLB Ticketing

For fans that do not mind spending the extra money and want to avoid virtual waiting rooms or long lines, StubHub has become the mecca of ticket sales. Fans can count on StubHub to find tickets well after an event is sold out, knowing it is a more trustworthy source than the middle aged men scalping tickets around the corner from stadiums and arenas throughout professional venues.StubHub was founded 12 years ago and has seen great success as the middleman between traditional ticket sales and scalping, serving as an online ticket reseller.

The company was purchased by Ebay for $300 million in the summer of 2007, and has thrived since then. It is considered a legitimate source for legal ticket resale and the go-to site for anyone looking for last minute tickets to a game or concert. With an estimated annual revenue of $325 million (Forbes), it is clear StubHub’s ticket price was worth the investment for Ebay, as many fans are taking advantage of the service.

Over the last five seasons, StubHub has been the official ticket reseller of Major League Baseball. The contract, put in place in 2008, is due to expire come the end of this season. Although there is little news available about the possibility of renewal of said contract, it seems as if baseball has been happy with the services provided by StubHub. However, some teams may not be in favor of sticking with StubHub come 2013.

Recently, the Yankees have voiced its frustration with StubHub—blaming its low attendance on the company—despite the fact the team still has the fifth highest attendance in the majors this season. Although it took the team until mid-June to claim its typical spot atop the AL East standings, the Yankees has put themselves back in first place. The team’s attendance is down 3.6 percent this season from last year’s numbers, while last season the team saw a three percent decrease from the year prior.

Randy Levine, the Yankees’ president, recently made comments to the New York Post claiming that the team has a poor relationship with StubHub. But there are other factors that could be playing into the Yankees dwindling attendance. Ticket prices were raised when the Bronx Bombers opened up shop at the New Yankees Stadium, which is now starting to lose the appeal of its newness. The team also struggled out of the gate, raising skeptics. The New York Mets is sharing the same attendance struggles as well, and this may serve as evidence that the economy and the city itself are struggling as a whole, and the Yankees is not the only team feeling the pressure. Of course, the Mets has not finished above .500 since opening its new ballpark in 2009, making it difficult to fill the seats.

It seems that if StubHub was at the root of the problem, then the majors as a whole would see a drop in attendance, but that hasn’t been the case. Baseball has experienced a seven percent increase in attendance across the entire league. The big contributor has been the Miami Marlins and its new park, which on average is drawing in 10,000 more fans a game than it did last season.

Either way, the Yankees is not the first team to be weary of StubHub’s ability to raise prices and negatively influence ticket sales. The Boston Red Sox signed a deal with a much smaller secondary market agency for its ticket sales, Ace Tickets, back in 2008, just before the season started, when StubHub was early in its MLB contract. Ace Tickets falls under the strict scalping laws of Massachusetts and guarantees 200 percent refunds for illegitimate tickets, something StubHub does not offer their customers.Most likely what it came down to was that the Red Sox saw an opportunity to make more money in an Ace Tickets partnership versus the large StubHub-MLB deal. It seems that the Yankees is regretting not making a similar decision and this may be why they are blaming StubHub. As its contract runs out at the end of the season, the team hopes to improve ticket sales for the 2013 season by finding a smaller, localized ticket reseller. Regardless, ticket sales are predicated by a number of variables, and simply switching to a smaller ticket reseller will not automatically mean increased attendance.