Why the concert ticket resale market benefits everyone

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New research co authored by Yanwen Wang, an assistant professor in the UBC Sauder School of Business, reveals the resale ticket market also appeals to sports fans who usually purchase season tickets.

The sell tickets markets — also referred to as secondary ticket markets — allow season ticket holders to recover expenses by promoting unneeded tickets, along with producing an alternate source of tickets which bring down the demand for fans to commit to a season’s pass.

It turns out this is not only good for fans — additionally, it boosts team revenues.

“Since sports teams earn considerable areas of the revenues of theirs from season ticket holders, we needed to discover exactly how secondary markets essentially influence their behaviour,” said Wang. “Our investigation reveals that sports fans tend to be more apt to buy season tickets when there’s another market since they understand they could promote them easily. This subsequently raises a sport team’s revenue by a minimum of 7 per cent each year.”

Wang says this is a conservative estimate as it doesn’t include incremental revenue sources such as for instance parking, concessions or maybe merchandise sales. She adds that given sports teams have very high fixed costs, low marginal costs, along with perishable inventory as foods served at concessions, the increased revenue might have ramifications that are major for any team’s profitability.

Because of this study, Wang and her staff examined a significant league baseball team in the U.S. They analyzed 1,924 customers that bought season ticket packages at least one time over a six year period and then tracked the behaviour of theirs for 481 games. They checked out the ticket type, price paid, ticket usage and ticket resales to learn whether each ticket was employed for attendance, listed, resold and forgone.

Of all the researchers’ other discoveries was constraints on ticket rates like minimum cost floors, that is pre determining probably the lowest price where a ticket might be offered at, come with an adverse effect on season ticket sales.

“This is an intricate issue because price floors could be inspired by a sports team’s desire to safeguard brand equity,” said Wang. “However, the teams should discover ways to balance brand maintenance goals against the advantages of providing additional value on the team’s hardcore fans.”

The researchers hope the study of theirs is going to encourage future research including the way information from the resale market is able to inform ticket pricing choices, too the impact on non sports events as concerts.