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Millions wasted: A plague of empty seats – Rio 2016’s next crisis

Empty seats are totally preventable, and Rio 2016 hasn't done its job filling them even for marquee events.

With the Opening Ceremony just behind us, the 2016 Olympic Games in Rio de Janeiro are already facing their next major challenge:  Huge swaths of empty seats. At nearly every major event the best seats are sitting empty for the whole world to see, and it’s as bad or worse on the ground than it seems on TV.

The empty seats plague has gotten so bad that this past Thursday, Rio 2016 announced they would be giving away 280,000 tickets away to underprivileged children in an effort to help fill seats at less popular sports including Golf, Rugby, and Field Hockey.  While this makes sense as a “pro-active” measure to avoid the horrific visuals of athletes competing to half-empty venues – it will not cure what we are seeing every day at the prime-time and most sought after events….the best seats, totally empty.

Corporate sponsors and the International Olympic Committee (IOC) have the best seats in the house, and for the third straight Olympic Games we are seeing rows of empty seats in the best locations for the competitions.  What we saw at the first swimming finals on Saturday, empty seats right in heart of the stands, will replay itself for the duration of the games. If these are the best tickets in the house and everybody wants them, including the athletes who get a paltry two tickets for the events they compete in, how can they sit empty?

 Credit: James Lang-USA TODAY Sports
Credit: James Lang-USA TODAY Sports

The problem starts with the lack of organization and transparency for the large number of tickets given to corporate sponsors and the organizing committees. Corporate sponsors have tickets included as part of their overall sponsorship packages while the IOC & the Olympic organizing committee hold back large numbers of tickets for staff, dignitaries, VIPs in their business circles, and for other marketing and philanthropic purposes.  For every Olympics, the tickets provided to sponsors and the organizing committees are always the best seats in the house.

But in both cases, these groups fail to systematically understand what will happen with these tickets, both those going to countries/stakeholders and those going to sponsors. There is no formal process in place so they lack visibility and action into whether or not these tickets have been assigned to someone, or if the persons they are assigned to is even making the trip.  As a result, millions of dollars are wasted as the best seats in the house sit empty and families of Olympians struggle to get tickets to these sold out events.  And, committed and passionate global fans watch as their country’s Olympians compete to half-empty venues.

The issue compounds with tickets allocated to the individual National Organizing Committees (NOCs) that are intended to go to the fans in a specific country or region.  Often times, a large block of tickets are siphoned off to the secondary market where they can command bigger dollars for the organizing committees. Where there is demand without transparency, there is always fraud.

In Beijing 2008, the co-founders of my current company found themselves right in the middle of one of these transactions which sounds more like a mobster movie than a celebration of global athletics:  Picture yourself in a hotel room.  In barges two armed guards followed by a man with two stainless steel suitcases.  He swings it up onto the bed and opens it open. It is filled with thousands of Olympic tickets.  A man walks over, inspects them and gives a nod.  Two more armed guards burst in with a suitcase of their own that is slung next to the tickets on the bed.  Once opened, it is filled with $1000 bills.  The two men exchange pleasantries and go on their way, while our co-founders sit horrified at how simple and commonplace the transaction seemed to those involved.

These tickets were from a NOC (National Organizing Committee) (we’ll spare the name though they clearly identified themselves) and intended for the fans of their country which, instead, made their way into the hands of brokers who sold them for many times their value.  This is not uncommon as this scene plays out Olympics after Olympics with the “extra tickets” making their way to secondary markets while consumers and Olympian families are left out in the cold.  They don’t stand a chance to get great tickets at face value.

Credit: Kyle Terada-USA TODAY Sports
Credit: Kyle Terada-USA TODAY Sports

The market, however, does go both ways and neither the games, the sponsors, nor the NOC’s were prepared for the sagging demand for Rio’s lesser events. In times of booming demand, brokers and NOC’s mark-up tickets exponentially and know the lesser events will sell to the public. For Rio 2016, however, the inefficiencies of the system have created a different problem: additional non-public inventory that has yet to be moved.  Just days before the games, multiple ticketing insiders here in Rio personally told me that several of the NOCs were doing everything they could to liquidate their excess inventory before the games started.  Some were so desperate that they were offering discounts of 50-percent off the face value to move them.

Empty seats are totally preventable. They are caused by greed, a lack of planning, and corruption. Until transparency and technology (there are many solutions on the market and have been for over a decade) are embraced, people like Sead Dizdarevic, the re-seller of Olympic tickets with a long and publicly documented history of corruption, and ticket brokers will make out like bandits while the families of the athletes are left home .

Buckle your seatbelts as we are in for a wild ride. With the Opening Ceremony done and the highly anticipated swimming and gymnastics started, Rio 2016 is facing another crisis that is not only easily preventable, but one that they promised the world in 2012 would not occur here – rows and rows of empty seats. Add this latest one to the list of broken promises in Rio.

Ken Hanscom is Chief Product Officer at InviteManager, which manages over 30 million sports tickets for corporate programs annually. A leading mobile app and cloud-based platform, InviteManager makes it easy for companies to share events, sports tickets and experiences with their customers while proving the ROI. Follow him @KenHanscom.

Main Photo Credit: Ken Hanscom

 

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