Pro teams find a hot ticket in secondary market
Professional sports teams are slowly accepting the secondary ticket market rather than fighting it.
Most teams already provide a mechanism for season ticket holders to resell tickets they can't use, and a small but growing number of clubs are fully embracing the secondary market by allowing fans to sell tickets at whatever price they want.
The full embrace of the secondary market may sound like team-sponsored scalping, but ticket industry officials say it makes perfect sense. When demand for tickets outstrips supply, as happens routinely here in Boston with the Red Sox and the Patriots, no one can stop the resale of tickets at sky-high prices on the street, on the Internet, or at ticket brokers.
If scalping can't be stopped, say some club executives, why not at least control it and take a piece of the action. That way fans will be protected from counterfeit ticket sales, season ticket holders will be happy, and the club will benefit from another revenue stream.
The Red Sox took a tentative step in that direction two years ago, setting up an online system called Red Sox Replay that allowed season ticket holders to resell unwanted tickets. But Replay reportedly didn't attract many users last year, primarily because the fees were high and sellers were required to sell their tickets at face value.
By contrast, the San Francisco Giants have had tremendous success with their version of Replay by allowing season ticket holders to resell their tickets at whatever price they want.
Last year, the Giants' Double Play system processed 120,815 ticket resales, the equivalent of three sellouts at SBC Park. The Giants collected a 10 percent fee from the buyer and seller on every transaction.
The team declines to say how much revenue it made from the system, but a conservative estimate assuming an average resale price of $30 per ticket means the Giants took in more than $700,000 last year.
Russ Stanley, vice president of ticket services and client relations for the Giants, said Double Play has been very popular among the club's season ticket holders.
''It's been a huge reason why we have retained more than 90 percent of them year to year," he said.
Stanley said the Giants were able to allow season ticket holders to sell their tickets at whatever price they want because there are no state or local laws restricting the price of ticket resales in San Francisco.
In Boston, however, a rarely enforced state antiscalping law limits the markup on ticket resales.
''What guides most of these things is local law and what the club wants to do," said Bob Bowman, chief executive of Major League Baseball Advanced Media, the league subsidiary that earlier this month revealed plans to buy Tickets.com for nearly $67 million.
Tagg Romney, a former ticket software executive and Governor Mitt Romney's son, said he believes new ticket technology makes it possible for even teams like the Sox, which are located in states or municipalities with antiscalping laws, to fully embrace the secondary ticket market.
He said most antiscalping laws prohibit the sale of tickets above face value.
The Massachusetts law, for example, requires ticket reselling businesses to be licensed by the state and bars them from charging ''in excess of $2 in advance of the price printed on the face of such ticket" plus any ''service charges" related to the procuring of the ticket.
Romney argues that clubs can effectively sidestep the law's markup restrictions by electronically canceling the bar code on the seller's ticket and issuing a new bar code to the buyer.
What the buyer gets is a new ticket with a new face value, Romney says.
''We had a lot of lawyers look at it," Romney said. ''This wouldn't violate most state laws."
Ron Bension, chief executive of Tickets.com, which provides online ticketing services for the Red Sox and the Giants, was asked whether Romney's approach made sense.
''It's a good argument," he said. ''I'll leave it at that."
The Boston Celtics use a similar bar code technology for their Tickets Exchange program for season ticket holders.
Rich Gotham, the team's executive vice president, said the Celtics haven't really considered giving season ticket holders the option of selling their tickets at whatever price they want.
''From a technology perspective, it can be done," he said. ''It's a business decision that we probably wouldn't make, at least at this point in time."
The Red Sox and the Patriots have taken a very strong stance against fans reselling their tickets above face value.
Both teams have revoked the tickets of season ticket holders who have been caught reselling tickets. The Sox even snared five season ticket holders in a ticket-scalping sting last fall, punishing them by revoking their access to postseason tickets.
The Red Sox haven't unveiled details of their Replay system for the coming season.
Team officials referred all questions about the secondary ticket market to Michael Dee, the team's chief operating officer, who did not return repeated phone calls.
Bruce Mohl can be reached at email@example.com.