Olympic secondary sales beat budget

SportsBusiness Daily
Don Muret

Larry Witherspoon is entering his sixth year as CEO of the MLB Advanced Media subsidiary Tickets.com. During the Tickets.com Executive Summit in Long Beach, Calif., last week, he sat down with SportsBusiness Journal staff writer Don Muret and discussed the state of the ticketing business in the wake of the merger between Ticketmaster and event promoter Live Nation, as well as the Vancouver Olympics, where Tickets.com operated an officially sanctioned secondary ticketing platform for the first time in the event’s history.

Break down your Vancouver operations.
Witherspoon: We [did] 100 percent of the ticketing up there. We did the primary sales all throughout last year, and in December, we launched the secondary fan-to-fan marketplace. With that, we have the whole spate of tools for the Olympic experience, the ability for people to donate their tickets to charity, the ability for sponsors to do consignment of tickets when they have available inventory, and the cart of integrated primary and secondary tickets, where you can see both marketplaces and make a decision based on what you want to buy. All very cool new stuff. [The secondary market] has exceeded every budgetary expectation we did set. It was $10 million, but the problem we have is that it’s never been done before, so how you budget for the unknown was hard for us. Frankly, the matchups that occur play a big part as well. There’s a lot of national pride involved, and some people are going to be willing to go to that game regardless of what it’s going to cost them.


Tickets.com handled both primary and secondary ticketing at the Vancouver Olympics.

How do see the ticketing landscape changing?
Witherspoon: Three years ago, we reinvented our product [with ProVenue software]; literally started from the ground up. It’s been a painful process, and there’s a reason nobody’s developed anything new in the past 10 to 15 years in the ticketing world: It’s hard. What we really see to our advantage is our ability to provide technology to a venue or a team that allows them full control. So we don’t do the “Here’s a big check. We’re going to take a large part of the service charge.” What we do say is “Here’s our license. We’ll take a small vig on a service charge ticket, you control what you want to do with your service charges, [and] you take control of how you want to sell to the public.” We’ve seen some good results. The Seattle Theatre Group is a client that came on board with us and eliminated their print-at-home fees, first time people have done that in a long time, and dropped some of their service charges a little bit. Great press.

Do you see that applicable in sports?
Witherspoon: It depends. I think sports are a little different in that you have the governing bodies. I understand how MLB works, but I don’t know how much flexibility teams have in their service fee setup. From our system perspective, for sure, it gives anybody the ability to control it and manage it and manage their own ticketing system, which obviously lowers our costs, which allows us to provide a lower point to them, so then they actually get a little bit more control over their fees and prices.

Where do you see the growth in sports? Derek Palmer, your chief commercial officer, mentioned the lack of an NBA team as a client.
Witherspoon: Right now, we do about half of MLB and we have two teams [Twins and Royals] on our new product [ProVenue 2.0] and we plan on adding a lot more teams. I feel that arenas with teams feel they have a little bit more control over their ability to move without the threat of lack of content, of “Am I going to make Ticketmaster/Live Nation mad,” where they get worried about what acts [they] are going to get in and things like that. If you look at it from that perspective, then technology becomes a really big play for them, because everybody wants more data, more touchpoints with the client, how the process is working. We provide all that technology, and to drive it we partner in and integrate with third-party dynamic pricing, like we did with the San Francisco Giants and Qcue.

It’s been reported that MLBAM is in talks with AEG about possibly forming a joint ticketing venture. What can you say at this point about those discussions?
Witherspoon: Nothing really. I think as the industry has changed recently, there are a lot of people talking to a lot of different companies. Where that all will go is still to be seen. Obviously, not even in the context of AEG, but there are large regional ticketing companies, there [are] large Broadway companies that have relationships with existing ticket providers that are now looking around. Our ability to provide a self-operational model puts us in a good discussion point with anyone, frankly, at this point.

The Olympics Take A Stab At Secondary Tickets

Venues Today
By Dave Brooks

After years of opposing the resale of event tickets, the Vancouver Olympic Committee has introduced the first Olympic-sanctioned ticketing resale program. Powered by Tickets.com, the new system has separate tiers for consumers to sell tickets to other consumers, and an additional site for sponsors to trade and resell tickets to other sponsors.

For Canadian ticket buyers, the “fan-to-fan” marketplace at vancouver2010.com is designed to help fill empty seats and create a safe, reliable resale market where fans can sell their tickets without having to worry if they are stolen or counterfeit. Only Canadians who purchased their tickets through the VANOC system are allowed to list and sell tickets, although international visitors are allowed to view and purchase tickets.

“Obviously with any event out there, there is a secondary market, but we wanted to make sure we could keep control of it,” said Thomas Benson, director of Ticketing for Tickets.com’s Olympic operations. “Nothing is worse than somebody who shows up for the opening ceremonies and bought a ticket from a guy on the corner and it turns out the ticket is not valid after they shelled out $1,500. That’s pretty heart breaking. This is legitimate and it’s the only guaranteed way to get a ticket on the secondary market.”

The Olympic secondary marketplace will operate like most other sites — there will be no limits on price markup (although tickets can’t be sold below face), and like Tickets.com’s deal with StubHub and Major League Baseball, all tickets will be re-barcoded and reprinted for the buyer once the sale is complete. Secondary buyers will pick up their tickets from the will call window. VANOC will charge a 10-percent fee to both the seller and buyer for each transaction.

The VANOC team originally considered putting some limitations on how high a ticket could be marked up, but decided to scrap the caps.

“Basically we want to get as many people into the system as we can and as soon as you put a limit on it they go to Craigslist and sell their ticket because there is no limit there,” Benson said.

The other system announced was a platform for sponsors to sell and trade tickets to other sponsors. Unlike the consumer website, sponsors are not allowed to mark up the price of tickets, nor are they allowed to sell the tickets to the general public. If a sponsor has a difficult time filling a particular seat, they can consign the tickets to VANOC, which will place the inventory back into the primary market at no cost to the sponsor.

“Sponsors cannot directly sell to the public. VANOC was very adamant that sponsors should not be trying to pass off the tickets they purchased. They didn’t sign a sponsorship agreement so that they can scalp tickets. The sponsors are only allowed to sell to each other at face value,” Benson said.

The system was not budgeted for in the original Olympic contract with Tickets.com, explained Caley Denton, VANOC’s vice president for ticketing and consumer marketing. The fees on the consumer site are designed to help the platform pay for itself, and Denton said tickets can only be listed for up to 24 hours before an event.

“The message to the consumer is simple. If someone’s selling tickets outside of our Web site, people need to ask themselves why are they doing that and [question if that is a valid ticket],” Denton said during a press conference on Dec. 21. “We expect fairly high prices to start, as people test the market. Tickets will go quickly on the site, so people who are interested in a particular event should go fairly often.”

The other goal the new system achieves is striking a balance between sponsor tickets and public tickets. The goal was to have 70 percent of all tickets — and at least 30 percent of any event — available to the public. Allowing sponsors to consign tickets to the public through the site returns some high demand tickets into the hands of the public without a high-markup, said Dave Cobb, deputy CEO of the VANOC games, pointing out that the committee was also much more careful how sponsor tickets were allotted this year.

“We expect to have a minimum of 40 percent high demand tickets for each session [available to the public],” he said. “We think that’s a result of being very careful [during our review of ticket purchases] and making sure they are valid orders. That resulted in a significant reduction of tickets and provided 80,000 tickets more than we started with.”

If sponsors can’t trade or consign unwanted Olympic tickets, VANOC also has a site to donate the tickets to “children and families, Aboriginal peoples, and residents of Vancouver’s inner-city neighborhoods” through its Celebrate 2010 program. VANOC organizers hope to provide 50,000 free tickets to the public. Fans can donate their tickets for free on VANOC’s website, although Canadian law prevents them from writing off the tickets as a tax deduction.