With supporter protests regarding ticket prices on the rise, Stubhub is another symptom of an ever-growing problem in football.
Stubhub. I had never heard of it before recently. Now it has a growing number of Tottenham fans up in arms. The secondary ticketing service company – an eBay subsidiary – will replace the current Ticket Exchange system at Tottenham Hotspur, which enabled season ticket holders to sell their seat for games they couldn’t attend.
If Stubhub would work the same as Ticket Exchange, there would be little reason to question the new partnership between Tottenham Hotspur and Stubhub. However, the deal is another slap in the face to the average supporter in light of already rising ticket prices.
How does it work?
Stubhub is a secondary ticketing service which enables people to sell their tickets via an online market place. Sellers on Stubhub are free to set their own prices. A seller is also free to sell his/her tickets at considerably higher prices than the face value of the tickets. Alternatively, a seller can adjust his/her asking price if they are having a hard time selling their tickets. Basically, it’s a market ruled by supply and demand. Stubhub acts as an intermediary service provider, generating revenue by charging a fee to both sellers and buyers.
The new deal is groundbreaking as there are no restrictions on prices.
In the case of Tottenham Hotspur, some additional rules apply. Most importantly, season ticket holders can only list their seat on Stubhub once a match has sold out through Tottenham Hotspur’s “primary ticket routes”. In practice, this means it will be in effect for almost every game, since every Premier League home game sold out last season.
In theory, it is not allowed for supporters of the visiting team to purchase tickets via Stubhub, but it is unclear how the club or Stubhub will be able to enforce this in practice.
Stubhub claims it provides added safety and security to buyers through its FanProtect™ guarantee. However, last week reports brought to light that fraudulent ticket touts have increasingly sold fake tickets through secondary ticketing services such as Stubhub, Seatwave, GetMeIn and Viagogo. Senior Trading Standards officer James Williams commented on the guarantees offered by the companies, describing them as “not worth the paper they were written on”.
A seller’s market
Stubhub further emphasizes the fact that the market for football tickets is a seller’s market. In general, demand vastly outweighs supply, meaning that ticket prices can be increased virtually at will. This problem has been a thorn in the side of football supporters, resulting in a recent coordinated protest against ticket prices by a consortium of supporters groups, including the Tottenham Hotspur Supporters Trust among others.
The way Stubhub works incentivizes supporters to charge prices above face value to fellow supporters. Because Stubhub takes 25% out of every sale, the seller will have to list his ticket at 13.65% over face value to recoup the full face value. As a result, the buyer will pay a whopping 30.7% more than the ticket’s face value.
A ticket for a Category A match in the South Lower stands costs £48. To recoup the full face value of his seat, a season ticket holder will have to list his seat at £54.55 on Stubhub. However, this is not the price a potential buyer will pay for his ticket. On top of the list price, Stubhub charges a 15% pick-up fee to the buyer, pushing the total cost for the buyer up to £62.73.
List price: £54.55
Pick-up fee: £8.18
Sale price: £62.73
Now let’s look at an example for a lower profile match in which sellers should expect a harder time to shift their seat. A ticket for a Category C match in the North Lower stand costs £32. The willingness to pay way over face value is significantly lower than for a Category A match. Therefore, it’s best to list the ticket at face value in order to make a quick sale.
List price: £32
Pick-up fee: £4.80
Sale price: £36.80
Great, ticket sold, £28.16 recouped. That’s only £4 more than what a season ticket holder would’ve received in the old Ticket Exchange system. Question is: was it worth the hassle?
Lack of restrictions
Tottenham are not the only club in the Premier League that is involved in a commercial partnership with a secondary ticketing service. Stubhub is also an official partner of Sunderland and Everton. Aston Villa, Chelsea, Fulham, Manchester City, and Newcastle United have agreed partnerships with Viagogo.
Whilst season ticket holders at White Hart Lane can list their seats for whatever price they like on Stubhub, their counterparts at Aston Villa, Chelsea and Manchester City all face pricing restrictions. At Chelsea and Villa, season ticket holders can only list their seat at face value. At City seats can only be listed at 90% to 150% of face value.
Aside from price restrictions, both Chelsea and City require sellers to have a club membership or club account to be able to buy tickets via their secondary ticketing partners.
Another peculiar ‘feature’ of Stubhub is that anyone who buys a ticket via Stubhub can directly flip it again by re-selling it via Stubhub. Although this is convenient for those who have bought a ticket and are prevented from attending on short notice, it also opens the door for wheeler dealers who fancy their chances to make a quick buck over the back of the Spurs supporters.
The first test case: Swansea
The Stubhub market was activated for the first time this Wednesday afternoon when the home game against Swansea City was sold out. The first two listings were the first sign that fears expressed by many would become reality. One ticket in the South Lower stand was listed at £133.40 (£32 face value) and one in the East Lower was listed at £138 (face value £40). Needless to say those are ridiculous prices for a Category C match. What is even more remarkable is that the face value of the ticket in the South Lower is £80 according to the listing on Stubhub, which is blatantly not true.
On Friday afternoon there were 130 tickets listed on Stubhub. Here’s a breakdown of the listed ticket prices per stand, plus the face value of the ticket prices as published on the club’s website.
|Stand||Original face value||Average list price||Median list price||Mode list price|
Statistical breakdown of listed prices on Stubhub for the Swansea home game. Data retrieved from Stubhub UK, on 02/08/2013 at 16:30 BST. NOTE: One listing with a price of £899,938.26 was excluded from the calculations since this clearly is a wind-up.
Looking at these numbers, and the vast differences between face value and average ticket price, it’s very clear that the first test case has failed miserably. The average ticket price stadium-wide on Stubhub is £93 (ex. 15% pick-up fee), the most common price of all tickets is £57.50 (listed 14 times).
No matter what way you look at it, every supporter that will buy any of the 130 listed tickets on Stubhub will pay over face value, especially when you take into account the 15% pick-up fee that he/she will have to pay on top of the listed ticket price. Not even to mention the ridiculous prices in excess of £100 which are completely unjustifiable.
The real winners here, are Stubhub and Tottenham Hotspur Ltd. Stubhub takes a 25% cut from every transaction through their system and has landed a valuable advertising channel. Spurs have a ‘valuable’ new commercial partnership. Season ticket holders might recoup a bit more money than before, although they will have to spend more time on selling their ticket due to the way Stubhub works.
It’s ironic really, for a club who ran a campaign ‘Out The Tout’ a couple of years ago, to indirectly make money off of the secondary ticket market. Many people will view Stubhub as nothing more than a platform that tries to justify ticket touting, and gives it a sense of legality. Reselling tickets at inflated prices to fellow Spurs fans, one of your own, seems slightly unethical and morally questionable. A corporate face, and a profitable endorsement deal for your football club shouldn’t change your feelings on that matter.
This is a commercial arrangement. Football clubs always need new income streams, and the increased TV revenue should not be a smoke screen for this. Every club received the same TV deal; hence the gap still needs bridging with other teams.
– Ian Murphy, Head of Ticketing and Membership
The losers in this saga are, yet again, the supporters. Whilst the revenue of the Premier League clubs will rise to a mind-boggling £3bn next season and despite a 70% increase in revenue derived from the sale of the domestic TV rights, Premier League clubs don’t seem to be willing to give the supporters a break.
In 1991/92 the 22 clubs of the then Football League First Division had collective revenue of £170m – in 2011/12 the revenue of the 20 Premier League clubs was almost 14 times greater at over £2.3 billion, while five clubs each generated revenue greater than that of the entire First Division twenty years previously.
Sadly, football these days boils down to a financial arms race in which clubs spend more and more on both transfer fees and players’ wages each season. The additional revenue coming in as a result of the new TV deal seems to have completely obliterated the potential implications of UEFA’s Financial Fair Play plans. Wage costs keep on rising, causing further damage to the club’s bottom line.
Wage costs have consumed 83% of Premier League clubs’ revenue growth since 2006/07 and the wages to revenue ratio has reached 70%, while operating margins are now only 4% and are forecast to narrow even further in 2012/13.
The football supporter seems to be viewed as a cash cow. Demand still outweighs supply, even at the current prices for season tickets and regular tickets. The price of the cheapest season ticket for the 2013-14 season at White Hart Lane will be 8.2% higher than last season, whilst the average increase of a Spurs season ticket is 3.3%.
What the future could hold
Because the details of the partnership between Tottenham Hotspur and Stubhub are subject to a confidentiality agreement, there’s no transparency about any potential future expansion of the club’s partnership with Stubhub. However, looking at similar secondary ticketing partnerships at home and abroad it is feasible that Stubhub will expand their involvement in the re-sale of Spurs tickets.
Opening up their market place to non-season ticket holders to sell their regular tickets seems a logical next step. This would be another step towards offering a perfectly legal way to tout tickets with the blessing of the club. It’s as easy as registering a couple of One Hotspur memberships, trawling as many tickets as possible when sale to members starts, and then flipping them on Stubhub at prices well above face value. Obviously, this will make it harder for both One Hotspur members as well as non-members to get hold of regular tickets via the club’s primary ticket routes since touts will eat into the capacity up for grabs to the honest supporters.
The Tottenham Hotspur Supporters Trust has been monitoring the Stubhub situation for a while. Although its initial statement about the deal was somewhat tame and lethargic after being ‘bamboozled’ by the club in a Q&A session, the Trust has been actively monitoring the situation and seeking dialogue with both the club and Stubhub.
The Trust appeared to be swayed by the arguments that Stubhub would benefit season ticket holders and that the percentage of tickets sold via the old Ticket Exchange was a mere 1-2% of White Hart Lane’s capacity last season. However, findings from a recent survey by the Trust pointed out that only 33% of queried season ticket holders had used the Ticket Exchange last season, whilst 70% of all respondents had not used the exchange at all last season. This shines a completely different light on the earlier mentioned 1-2%, and means Stubhub will likely have a greater impact than initially predicted by the Trust since the level of awareness about the introduction of Stubhub among the respondents was quoted as “relatively high”, which most likely will result in a more frequent use of Stubhub compared to the old Ticket Exchange.
The Trust’s call for a maximum price limit and a lower pick-up fee for the buyer (currently 15%) during a recent meeting with Stubhub and the club is an admirable effort. However, these recommendations are likely too little to late since the deal is already set in stone. Maybe their appeal to season ticket holders to charge face value when selling tickets via Stubhub will have more success, since both Stubhub and Tottenham Hotspur promised to make a call to sellers to price their tickets “sensibly”.
After reaching out to the The Football Supporters’ Federation on the matter, they said: “the FSF’s policy opposes “secondary ticketing agencies” and we’ve been quite vocal about them with FSF Chair Malcolm Clarke appearing on the BBC and in the Manchester Evening News branding them “legalised touts” last year.
“The FSF are currently working on solutions to this problem and we’re hopeful of engaging some clubs and creating a more fan-friendly approach in the long-term. We’re hopeful that we’ll have more concrete plans launched before 2013 is out.”
Make a difference
In other parts of Europe fan protests have successfully ended similar practices. Football fans throughout the Bundesliga have voiced their objections against secondary ticketing. As a result, HSV severed its ties with Viagogo and Bayern München decided not to renew their partnership with Viagogo after persistent protest by its supporters.
Schalke 04 fans successfully ran a campaign against their club’s partnership with Viagogo. The Vianogo campaign resulted in 10,000 supporters turning up at the club’s annual general meeting, which was dominated by debate about the club’s dealings with the secondary ticketing service. In the end, 80% of the members present voted against the club’s three-year deal with Viagogo, resulting in Schalke terminating the contract without notice.
To make a difference you can write to the Tottenham Hotspur Supporters Trust to let them know what you think about Stubhub and what you think the Trust should do about it on your behalf. You can contact them via email, on Twitter or Facebook.
You can also write to Tottenham Hotspur’s supporter liaison officer. The supporter liaison officer’s role is to build bridges between the club and its fans.
Most importantly, make every Spurs fan you know aware of the current situation!
- Explain why you are opposed to Stubhub;
- Tell them how Stubhub causes fans to pay way over face value for match tickets;
- Tell them about the 15% fee buyers have to pay on top of the listed prices;
- Encourage season ticket holders to use Stubhub sensibly and list tickets at a reasonable price;
- Make sure you and your mates get your tickets in time so you can prevent having to pay over the odds for a ticket on Stubhub.
Total Tottenham will not sit still on this issue either. We will continue to monitor and report on how the Stubhub system operates in practice. Also feel free to voice your opinion in the comments below.
Read more opinions about the Stubhub deal and secondary ticketing in football:
Tottenham ticket trouble, by Martin Cloake
Got any spares? Stubhub have, by Tottenham On My Mind
Out the tout, by Paul Head
Fans fight back against “secondary” ticketing agencies, by the Football Supporters Federation
Fans say no to legalised touts, by Martin Cloake for the Football Supporters Federation