Let’s see, where have we heard this before? A professional team is angering its fans — in this case to the point of a lawsuit — because the team has made a decision to stop using paper tickets. The Yankees made a similar announcement about a week ago, but they weren’t the first team do so as the Timberwolves beat them to the punch this year. All T-Wolves tickets were digital and available through Minnesota’s ticketing partner Flash Seats. Flash Seats was also the digital ticket secondary marketplace, which allowed the team and partner to keep tickets artificially high through the use of price floors.
Look, the Yankees are a prime ticket in New York City. It’s still a perennially contending team with a deep history and a new — historical?– stadium. In some cases people will pay the artificially inflated ticket just to say they saw the Bronx Bombers play at Yankee Stadium. The Timberwolves are 19-42. They have a bright future with Karl-Anthony Towns, Zach Lavine, and Andrew Wiggins, but setting artificial price floors to see a 19 win team is a little ridiculous. The Timberwolves have the lowest attendance numbers in the NBA by the way.
We’ve reviewed this but digital tickets do have benefits. They allow teams to create a consumer profile to better serve fans when they are at the venue. Digital tickets allow teams to see concession patterns and offer a beer, soda, or food item when a fan would normally purchase it. They allow for marketing deals, ticket upgrades, contests, and merchandise offers. Digital tickets give a lot of information to teams that need to provide special services to drive fans off their couch and to the arena.
That shouldn’t allow for teams to control the free-market of secondary ticket pricing. If a ticket is going for $10 and the face-value is $50, well that’s the original ticket purchasers loss. That $10 is better than zero. That cheap ticket also allows teams to benefit from the Fan Cost Index of the attendees. If artificial price floors are keeping fans out of the building that’s an issue.
There’s no easy way to solve the problem though. StubHub and other secondary ticket market makers such as SeatGeek are shut out of the process currently. There’s no easy way to transfer digital tickets without paying a premium on the true value of the ticket — plus whatever Flash Seats or Ticketmaster is charging as a service fee. Right now teams are backing their official secondary ticket partners and it looks like lawsuits are the only way this will change.
Michael Colangelo is Managing Editor of The Fields of Green and Assistant Director at the USC Sports Business Institute.