Thanks to the ongoing Covid-19 pandemic, the ticket resale market may be heading back to its market-specific and relationship-driven roots.
In recent years, the ticket resale market has grown exponentially, with one of its largest businesses sold for US$4.05 billion in an all-cash deal. The deal was made between eBay and buyers Viagogo in 2019 for the acquisition of StubHub, with Viagogo CEO Erik Baker stating: “I am so proud of how StubHub has grown over the years and excited about the possibilities for our shared future. Buyers will have a wider choice of tickets, and sellers will have a wider network of buyers.”
However, due to the Covid-19 pandemic and the effects this will have on live sport, the ticket resale market has witnessed significant disruption.
As the sporting world is beginning to pick itself back up and begin to recover from the decision to halt sporting seasons and leagues, the ticket resale market is making changes as a result of this. Due to government regulations and health & safety, many sports that have restarted will not have fans in attendance at live stadium events and many sports that are preparing to restart will also have to follow these guidelines and restrict fans from entering. It is clear that in the foreseeable future, stadiums will not reach full capacity, with many events played behind-closed-doors, which as a result will decrease market value for ticket resale businesses.
StubHub one of the largest ticket resale companies has already made a major change to its payment scheme over the past few years, by only allowing payment to go through to the seller 5-8 days after the completion of the event. This has become an unpopular decision with small businesses who sell tickets on this site as it would cause cash flow issues and deficits. However, this was introduced to protect against refunding and cancellations of events for the buyers.
This will become more useful and will help to further protect fans buying tickets in the future with uncertainty being a huge factor in attending live sport. As governments are enforcing 'behind-closed-doors' for many sports, at the moment tickets will not be sold. However, when people are able to filter back into live sporting matches, a spike in the infection rate could cancel any live sporting event, meaning all parties involved are protected.
Due to the market value decreasing and income becoming scarce, many companies have been forced to furlough and layoff current staff in order to keep the companies afloat during this time of uncertainty and lack of income. StubHub has been forced to lay off 200 staff members, alongside market giants Ticketmaster, Vivid Seats, AXS and TicketNetwork who have all been put in a position where layoffs and furloughs have had to be made.
However, certain trends in ticketing have begun to materialise during the ongoing pandemic. Ticketmaster has introduced technology into ticket barcodes in order to reduce the risk of fraud cases within the reselling market, protecting the buyer. These barcodes help clubs and ticket rights holders to restrict how tickets can be resold, by controlling how it can be sold, when it can be sold, and what area or site it can be sold on.
In addition, many teams in the US, in particular, Major League Baseball (MLB), are shifting towards season ticket and membership-based models and schemes in order to gain more control over how and where the tickets can be resold, as season tickets and members contribute to a large proportion of revenue. Many English Premier League teams already have this in place with clubs such as Everton FC already in partnership with StubHub, allowing season ticket holders to easily and directly sell unwanted tickets, with StubHub taking a small fee per ticket sold.
There has been much speculation and talk on how ticket resale companies will survive and bounce back from the losses caused by the pandemic. Founder of Ticket IQ, a ticket search engine, Jesse Lawrence said: When I look ahead at the secondary market, I see that channel overtime getting smaller, particularly as teams take more control over their own assets. Secondary is going to be a smaller piece of that distribution equation where it’s really more about smaller supply and higher prices, and sort of goes back to its original use case scenario.”