Before the 2007 season, Major League Baseball Advanced Media partnered with StubHub as the official secondary ticket marketplace for Major League Baseball. All 30 MLB teams participated. Anyone could list MLB game tickets for sale on StubHub, at any price. StubHub charged buyers a handling fee and a delivery fee, often totaling more than $10, regardless of the selling price. The “delivery fee” was the key to the deal, as it allowed buyers to print the tickets at home. Gone were the days of sellers tossing tickets out a window to buyers at midnight. Sellers also paid a fee to StubHub, charged as a percentage of the sale price. StubHub shared about half its fees with MLBAM. In 2011, that amounted to more than $60 million. MBLAM then funneled a portion of those funds to the 30 teams.
Fans rejoiced. During the 2011 season, more than 8 million MLB tickets sold on StubHub, up from 6 million in 2010.
But many teams weren’t as thrilled. The Yankees, in particular, were a vocal critic of StubHub’s pricing policies. With no price floor, Yankees tickets were often available on StubHub for less than $5, a price significantly below the lowest ticket price available at the box office or on Yankees.com. Critics countered that Yankees ticket prices were too high, creating a fertile market for very cheap tickets on the secondary market. But even teams with lower ticket prices lost sales to StubHub.
Other teams complained about ticket sales for high-end seats. The Braves, for example, said the StubHub deal cut into their season-ticket renewals, because fans could essentially purchase partial season-ticket plans for the best seats at Turner Field from existing season-ticket holders.
Not all teams disliked the StubHub arrangement. The Giants loved it because they made money twice on the same tickets. Beginning in 2010, and continuing through last season, the Giants have played to sell-out or near sell-out crowds. Strong demand and limited supply for Giants tickets meant higher prices on StubHub. It also meant the Giants didn’t lose many same-day ticket sales to bargain-basement prices on StubHub.
On Monday, MLBAM and StubHub announced a new five-year deal. Some concerns were addressed, but the basic structure remains the same. Under the new deal, the minimum price for all MLB tickets will be $6, inclusive of all fees. That sounds like a price floor, but when you consider the transaction fees — now included in the price instead of added-on at check-out — there’s either no floor or the floor is very, very low. Indeed, StubHub spokesperson Glenn Lehrman admitted the changes were more about perception than reality. “The bottom line is that we felt like for both our fans and for our teams there was an optics issue,” Lehrman said. “In other words, there was a lot of chatter about .99 tickets, cheap tickets, and the reality is that’s not what the ticket was selling for.”
In addition to the $6 ticket price minimum, other changes to StubHub’s pricing model include a $2.25 delivery fee per ticket (vs. $5.40 under the old deal), and lower service fees: $3 for tickets under $50 and a percentage of the price for tickets over $50.
These changes weren’t enough for Yankees. They’ve opted out of the StubHub-MLB partnership and struck their own deal with TicketMaster. Details are sketchy but reports suggest that TicketMaster has agreed to a price floor and time restrictions for the sale of Yankees tickets. The Angels also reportedly have a deal with TicketMaster. The Cubs are also on the outside but have not yet announced a new ticket resale partner. Fans can still buy and sell tickets for these teams on StubHub, but the “Print at Home” option will no longer be available.
What about the Braves and other teams concerned about the StubHub partnership? What will they do, if anything, to win back ticket buyers who fled to StubHub over the last five seasons? Will they lower ticket prices when there’s amply supply just a few hours before game time? Will they offer season-ticket buyers benefits not available on resale?
Whatever it is, teams with half-empty ballparks and lost ticket sales to StubHub will need to get creative. Because fans love the StubHub partnership and it’s here to stay, for at least another five years.
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