Can the NHL find a way to make ticket sales a win-win situation for both the league and fans?
It's summer, which for hockey fans means a lot of things: the draft, prospect camps, and the anxiety of hearing about trades and re-signings for one's favorite teams.
Beyond the nuts-n-bolts of team organizational points, however, is the other main issue that fans deal with over the summer break: season ticket renewal.
The Blackhawks were not the only team to announce price increases over past years' rates. In perhaps one of the most interesting announcements, the Florida Panthers announced new tiered seat pricing, similar to what you see with most airlines these days. The earlier you buy your tickets, the better the price. Most games will start at "bronze" level pricing. If a game proves popular, as it draws closer to the game date, the price may rise to "silver" pricing or if demand is high enough, "gold" or "platinum" level pricing.
For a team like Florida, which struggles to meet their arena's capacity, and who has much smaller season ticket holder populations than say, Chicago, Detroit, or any Canadian team, this kind of pricing will likely drive more people to purchase season ticket plans and/or to commit to buying a certain number of tickets as soon as they go on sale. In post-lockout vocabulary, this would drive Florida towards "cost certainty" for the team. In addition to the pricing changes, the Panthers also announced a plan to reduce seating capacity at BankAtlantic Center in an effort to create a "more intimate" atmosphere. The new plan will not remove seating, simply cover up the top several rows at the very top of the arena. (Perhaps the Panthers' new slogan under Dale Tallon could be, "Less seating, more excitement!") If the Panthers' plans increase ticket sales at the BA Center, this is of course a good thing as it helps contribute more money to the league as a whole.
On the other side of the coin are those arenas which frequently or constantly sell out - generally those who boast season ticket sales in the 10,000-14,000+ range. A couple years ago, you would've struggled to have paid fans to come to the Blackhawks' games, but today the United Center is at a 100+ sold-out/over capacity game streak, and counting. League-wide, the NHL sold nearly 93% total attendance last year - the 3rd highest figure in NHL history.
Just a reminder before we get deeper into the discussion: the NHL is a business. Corporate sponsorship went up 20% in the past season, ad spending went up 37%, revenue from big event platforms (ie. the Bridgestone NHL Winter Classic) went up 22%, cable and internet NHL-specific subscriptions were up, Shop.NHL.com sales were up by 12%, viewership and ratings were up. Those are the kind of double-digit increases that any company could be proud to boast.
With all of that being said, how can the NHL best protect their fans when it comes to ticket sales, while still selling as many seats as possible?
Let's face it, we live in a capitalist society, and if the NHL is selling all their seats, they don't really care who buys the tickets, so long as they're sold. They rather sell out the season packages early, and renew as many as possible. Being able to say something like "team X has 14,000 season ticket holders with a 95% renewal rate" is far sexier than begging people to buy your product.
It's a double-edged sword when it comes to fans, however.
To keep a franchise healthy for a long period, you must continuously renew the fan base. When it comes to sports, word of mouth is the best tool you've got. Ask any hockey fan, and the majority will you it was somebody else who got them into the game. Maybe their dad used to bring them to see live games when they were a little kid. Perhaps a cousin plays in a local league. Or the Stanley Cup playoffs rolled around, and their hockey fanatic roommate had the TV turned to the playoffs night after night.
Those fans bring their friends and family to games, and create new fans.
For most fans, season tickets are the pinnacle of their fandom. The most diehard among us wish we could be like Blackhawks season ticket holder Bob Gertenrich, who's been a season ticket holder for 44 years and seen over 2,000 consecutive home games. Most of us can't afford the season packages that run for $4,000+, but the more conservative 300-level tickets are certainly within reach. Depending on the team, season tickets for the least expensive prices can run anywhere from $400-$1,500+. Canadian teams tend to be pricier than their US counterparts.
But especially true for championship teams or consistently solid teams like Detroit, the attrition rate is low. On less-in-demand teams, you may see yearly turnover of 20-30%. In the really good hockey markets, the retention rate is 97-100%.
As season tickets can start around the $500 mark, and soar into the thousands, not everybody can immediately afford to buy a season ticket. Once you decide you can afford it, you put down your deposit and get in line. If your team is very popular, it may be an exceedingly long wait - even 10 years or more.
So how, if you're a fan who wants to buy a season ticket, can you ever have hope of getting a season ticket if your team's renewal rate hovers high in the top 3 percentile?
The problem is that not everybody buying a season ticket is actually using it themselves. There are three kinds of season ticket holders out there:
1. Ticket season holders who actually use the majority/all of their tickets;
2. Ticket season holders who buy extra tickets and use them as an investment, selling the extra tickets to make money;
3. Ticket brokers.
Every team has its rules about ticket sales, but nearly every one lists rules such as "no more than 6 or 8 tickets per customer, per game."
And then there's scalping.
Around a dozen states have a law that makes ticket scalping flat-out illegal. Several states require a special license to be allowed to resell tickets. Connecticut reviewed all states' ticket scalping laws when it took the same topic under review in 2006; view state-by-state guidelines as found in 2006 here.
Even among those states which allow ticket scalping, the rules vary wildly from state to state. Illinois, for example, has restrictions about reselling tickets for over face value, and how far away from an event's venue that tickets may be scalped - and, depending on each state's guidelines, season ticket holders may even lose their status if they violate a venue's resale policies.
The rapid growth of the internet has further facilitated ticket scalping through the rise of regulated, tax-paying websites such as StubHub and TicketsNow that make their business entirely by buying up huge bulks of tickets and selling them at sizeable profits. These companies take a risk in the hopes of capitalizing on a significant gain in the future.
The problem with this is that instead of the NHL and its teams controlling the market and its prices, fans are left at the mercy of both brokers, and those people who choose to buy extra season tickets as "investments".
Unfortunately, little to nothing is ever done about ticket scalping procedures not following the law. Generally, if somebody is surfing a site like StubHub or Craigslist looking for tickets, it's because they're desperate to get their hands on tickets, and are willing to pay more - much more - playing right into the brokers' open hands.
During the 2010 Stanley Cup playoffs, several news stories arose not just in Chicago but in other playoff markets with complaints about tickets being resold twice. Fans would buy the tickets from one source (say, TicketExchange) but another fan would by the same ticket through an external source such as StubHub. Only the first fan to arrive at the stadium would be permitted into the arena; the second fan would be turned away, being told that their ticket had already been scanned.
And as frenzied demand rose in Chicago, it was tough for fans to stomach an interview on a local news station where a ticket broker was interviewed during the playoffs. The broker carefully stated - you could tell he had thought about his wording - that as a broker, they "foresaw the demand" and "stocked up on product" because they "didn't want to disappoint their customers by not having any tickets available."
Hey, last time I checked, Ticketmaster works pretty closely to how most ticket resale websites work. The broker was making it sound like the customer was too stupid to know how to work Ticketmaster on their own, and hey, isn't it nice how this broker can do that customer a favor by pre-purchasing those tickets and then resell them to the eager customer for a big fat profit?
As a sampling, I went to StubHub and searched out season ticket packages for the Blackhawks. I found 82 season ticket packages currently priced from $2,200 (upper level 303, original price roughly $800) to $20,500 (lower level 109, original price roughly $4,400). Keep in mind that the on-the-glass season ticket seats sell for about $14,000 direct from the team. (These are estimated base prices computed from last year's prices plus increases.)
That's 200-400% markups. The league sees none of that.
Nosebleed tickets, for example, often run $65+ on resale website. What cost the "STH" perhaps $30 is being resold for double the face value plus "handling fees", shipping fees, and taxes. It means that the ticket brokers might as well be given a printing press for all that free money.
You can witness for yourself the same thing; just look at all the tickets regularly available on TicketExchange during the season - you can often find the same exact seats available game after game after game.
None of this resale profit goes in the NHL's pockets. So why would teams be willing to renew ticket brokers bulk ticket offers before getting people off the waiting list?
The payoff may be that by being able to say that season ticket packages are sold out or a particular game's tickets are sold out drives demand. But that demand doesn't help the teams or the NHL any; it only helps to serve the interest of the ticket brokers/scalpers.
As teams will generally only resolve problems with ticket resales that are conducted via TicketExchange (an online website designed to facilitate sales of tickets held by season ticket holders), it would seem easy and logical to create a program that could look through ticket sales for each seat and determine how often a seat has been resold. A resale rate of say 0-30%, even perhaps as high as 40%, is a realistic figure for a season ticket holder - people are sometimes out of town or sick or other events prevent them from going to every game. (If you sold approximately 25% of your tickets at face value, instead of the lower STH rate, without even marking up the tickets, you could pay for your next season's tickets. Many season ticket holders earmark a few games they're willing to sacrifice seeing live in order to simply have enough money to pay for next year's ticket[s].)
Season ticket holders who are reselling 50-75% of their full season package should be interviewed to find out if there's anything that could be done to improve attendance; and probably downgraded to partial packages, 9 or 20 games.
Partial-ticket plans often cost slightly higher on a per-game basis but still cost less than full ticket prices. These plans are better suited for those wanting to attend only part of the season, and at the same time, has the added benefit of putting more money into the league's profit margins.
But when you reach resale percentages of 75-100%, then those accounts should be flagged, because they are clearly being purchased - and resold - simply for profit. If you're only attending a handful of games, why else would you be purchasing a season ticket? Any full-season seat being resold more than 85% of the time (35+ games) should be automatically removed from the renewal list, because there's somebody on the waiting list who would actually use that seat as it's meant to be used.
The ultimate deterrent against ticket resales? Once a ticket has been resold for over 60% of the games for which it has been good for, invalidate eligibility to buy post-season tickets with that account. Resellers, after all, hope to hit the jackpot by having a team enter the playoffs, and achieve the Holy Grail of all sports team tickets - the Final Two, no matter what the sport. Depending on its location in the arena, a single playoff ticket sold at markup can easily cover the cost of the entire season ticket. And for a so-called "fan" who sells off the majority of their season tickets - are they really a fan if they only show up for the playoffs?
If a season ticket holder only attends a handful of games protests about the ticket being dropped from the renewal list, ask them why they're selling off 35+ games. I can guarantee you there isn't a single person out there who'd honestly answer "it's my supplemental income".
Alternatively, brokers bulk ticket renewals should be made to wait until after wait list demands are met. If the ultimate concern is simply selling the ticket, shouldn't a fan waiting on the list be given higher priority to purchase it than a broker who is simply looking to make a profit?
Ultimately the goal of ticket sales is to sell as many seats as possible for the good of the league, because it not only helps owners' profits, but increases/benefits salary cap and players' salaries as well. Hockey is a business, after all.
But it's in the league's best interests to find a way to artfully find the balance between putting as much ticket revenue in league pockets (vs. outside companies' pockets) as possible, while continuing to be able to provide for true fan demand. Happier fans stay with the sport and bring more fans into the sport, which is an ongoing cycle.
Fans get frustrated when they have a near-zero or zero chance of getting tickets direct from their team. Why should they be forced into paying a broker a sizable markup? That markup doesn't benefit the team, the league, the players, or the fans. It only makes profit for somebody or some company that just looks at the league and sees dollar signs.
It's because hockey is a business that it's very unlikely these practices will ever change. For the league's bottom line, it doesn't matter who buys the tickets when they're put up for sale, so long as they're sold. But for fans' goodwill, it would be an improvement to figure out the way to put more tickets directly in the fans' hands, and less money in the middlemans' pockets.
Of course, there will always be those who find their way around the system. But it's not enough to simply put rules in place; rules must be enforced.
In the end, I would actually predict that more teams move towards the Panthers' new model. Those who buy season tickets - or even single-game tickets - benefit by getting their tickets at the cheapest rate they can early in the season when they go on sale. The profits increase for the league, as the closer it gets to the game time, the more they can/will charge under the sliding/"airline"model - which yes, sadly, means more costly tickets for the fans.
Unfortunately, under such a model, the brokers would attempt to buy up even more of the tickets up front in order to maximize their chances of making a profit.
It's a vicious cycle, from which the fans will likely never emerge as the winners.