Secondary Market and Ticket Sales

¶ … Secondary Market and Ticket Sales

Writer Chris Isadore makes some very interesting points in his article entitled, "Why $75,000 playoff tickets are a good thing." The article is devoted to the issue of secondary markets in baseball ticket sales and whether or not these secondary markets help or hurt the fans' ability to both obtain and pay for tickets to their favorite games. The online ticket sales company Stubhub is also mentioned as one of the most commonly used secondary market ticket clearing houses. Websites like Stubhub only help to support the basic economics argument that less restrictive markets that are allowed to stabilize themselves through supply and demand driven pricing and availability are healthier for the game of baseball. Many people feel as though websites like Stubhub generate unfair price markups and ticket scarcity, and therefore are concerned about the prices of tickets available on this site vs. The face value of the ticket in the primary market.

The article itself is laid out quite intuitively, in a question and answer style critique of the issue. Author Isadore presents questions and gripes that many fans have relative to websites like Stubhub and their position in secondary market sales and then presents facts and numbers to back up the idea that these websites are actually beneficial to the game. It is obvious that not every playoff ticket listed on this website costs $75,000, and that the author was using this figure as an attention getter, but the fact that people often misunderstand the dynamics of markets, both primary and secondary, is seen as a major obstacle to understanding why websites like Stubhub exist, at least in this article.

Isadore's information that was gathered as a senior staff writer for CNN is very accurate. He uses specific numbers as found both on the website as well as the face value of tickets sold. The article also incorporates other information critical to the article's premise like cost of air travel and the idea that some fans choose to buy tickets in other cities or other markets as these markets offer cheaper alternatives to their own home ticket markets (Isadore 1). His own interpretation of the information was also rather fair and balanced. He uses the secondary ticket market for World Series games as well as some examples of how anti-scalping laws have hurt the ticket sales industry both in the primary and secondary markets to underline his main point. Information like the fact that the New York Yankees often disqualify people for further ticket purchases is they are caught scalping tickets (Isadore 1) helps set up his ultimate argument. His argument is also logical because it assumes that as long as there is a demand for tickets, which can often exceed the expectations of the average fan, there will be a market for them, and the prices will climb, as predicated on basic economic models of market supply and demand, until these two forces are equalized (Isadore 1). This example plays out in many different markets, not just in tickets for sporting events.

Websites like Stubhub only serve to help provide a more accurate access to secondary markets while creating more efficient secondary market conditions. Of course not every fan will be able to afford tickets in the secondary market at the prices the command, but it is only fair, as Isadore logically points out that tickets be sold for their true value, which is often far more than their face value. These secondary markets also help to create more access to tickets that would normally only be offered to a select group of people, who often cannot attend the games in the first place and who may even be limited by anti-scalping regulations as well (Isadore 2). This creates inefficiency in the market, whether people agree with it or not. The Stubhub site is also only one example, and there are other sites that exist that are not related to sporting event ticket sales, but whose existence helps to drive the equalization of ticket sales and ticket markets across the world. The fact that a site like Stubhub has gained so much popularity and has continued to thrive is testament to the fact that its existence helps to equalize the economic forces and sustain the secondary ticket sales market. These facts alone do not justify the existence of sites like Stubhub, but they show a demand for a secondary market, at least in tickets sales for these types of sporting events.

In response to the article and its main points, I completely agree with author Isadore. I firmly believe that since the primary market for tickets is often unfairly or inadequately regulated by factors such as specific access and timing purchases, that a secondary market would lead to far better access and ticket valuation than currently exists within the primary market itself. The basic economic premises behind supply and demand have been altered, or unfairly modified by limiting ticket sales to a primary market. As evidenced by Isadore in his article, often the demand for tickets to specific, or even hypothetical games like a Cubs vs. Red Sox World Series event, far outweighs the supply, and where market equalization is concerned, websites like Stubhub help to serve the fans as well as the ticket holders looking to offload their tickets.

Working with the assumption that certain people deserve first access rights to tickets while others, often willing to pay multiples of the face value are left out of the access pool, it is easy to see how some fans could become angry that websites like Stubhub exist. Not too many people can pay $6,000 for a World Series ticket, let alone $75,000. But when the market demands are equalized, outside of the rules, regulations, and moral considerations of the primary market, which have existed as long as there have been tickets to sell upon an ever-growing wave of demand, the ticket prices will always seem inflated to the uninformed masses who do not understand pure market valuation. Certainly not every ticket price has been pumped up by Stubhub, and just as airline tickets are offered in different configurations like first class, business class, and coach, the secondary market for sporting events tickets allows for the market to help differentiate itself in a similar manner. When willingness to pay outweighs the supply of tickets, it is only logical that the price be driven up as a factor of economic principles alone.