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The truth behind Super Bowl tickets

An industry veteran outlines what really happens In the hottest ticket market.

Super Bowl XLIX Fan Zone
Super Bowl XLIX Fan Zone

The Super Bowl is the biggest annual sporting event in the world with years of build-up surrounding each host city. It’s where celebs, corporate executives, NFL royalty and dedicated fans come together to watch the league’s showcase event. Every year we are inundated with tales, real and fictional, about Super Bowl tickets. From exorbitant prices to fraud to teams selling tickets on the black market, anything seems possible and little is understood. This year is no different and one of the major outliers in recent history.

Several companies have been involved in the Super Bowl ticket market for 30 years or more. They’ve seen it all, met them all, done business with many, and heard the war stories. Through 12 years in the industry, we’ve had a chance to see their experience first-hand.

So, what really happens with Super Bowl tickets? Who gets them? How do they end up in brokers’ hands? Why do prices fluctuate so wildly? And, finally, what happens next in the hottest ticket market?

Who gets Super Bowl tickets? 

The distribution is simple. Let’s assume a fictitious host venue with a seating capacity of 100,000. Certainly, there is variation to the host city and venue circumstances below, but the numbers are within a standard deviation:

35,000 tickets: Each participating team gets 17.5 percent of the available tickets. These teams don’t know they will be participating until completion of the conference championship games two weeks ahead of the Super Bowl.

17,500 tickets: Each losing team in the conference championship games is allocated 8.5 percent of the available tickets.

32,000 tickets: Each NFL team is allocated 1 percent of the available tickets. These allocations have increased in the past, however, 1 percent is the norm.

15,500 tickets: The rest of the tickets are granted to the hosting team, the Super Bowl Host Committee for that year, and the NFL for sponsors, executives and the like.

This allocation of Super Bowl tickets is very important in driving demand on the market and is part of the reason for the significant volatility seen this year.

The way things were 

Everyone involved in Super Bowl ticketing has a different agenda and treats the asset differently, especially considering recent developments.

From the 1980s to the mid-2000s, selling Super Bowl tickets was frowned upon by the league, teams and the media. We all remember the Mike Tice “scandal,” where the coach of the Minnesota Vikings sold his tickets at a profit. The market wasn’t nearly as open, and that led to a limited supply. It was a seller’s market with high prices and extreme volatility. Those involved in selling tickets operated like OPEC, working together to artificially inflate prices. Most teams gave ticket allocations to sponsors and season-ticket holders, many of whom sold them, while others would sell tickets to brokers and events firms. Tickets were currency.

One prominent broker in business for more than 20 years tells the tale of his indirect entrance into the market by way of the Dallas Cowboys. While bidding on business with the Cowboys for the 1993 Super Bowl in Phoenix, he was informed he would be paid a bit differently: in trade for Super Bowl tickets as opposed to a check. When he asked what he’d do with those tickets, he was given a phone number where the man on the other end of the line would buy them immediately for $2,000 each. It was easy money, and the team executive even told him what to charge for the tickets. That day, one of the larger Super Bowl ticket brokers was born and he’s been in the market ever since.

In those days, anyone caught selling tickets outright was skewered in the media and by the league. However, many teams and sponsors didn’t always have a use for the tickets they received, so a boys club of tight-lipped ticket brokers developed. They offered the teams and the customer a valuable service: a way to get excess tickets onto the market while protecting the teams and sponsors selling tickets. In exchange for this service, brokers made a healthy commission.

With such an unpredictable level of inventory, prices would hold throughout the year, even though the potential for a glut of tickets hitting the market during the championship games was high. Speculation was a risky game that could easily go awry and see tickets head north of $10,000 apiece in boom markets, something we’re seeing this year but for different reasons.

(Kirby Lee-USA TODAY Sports)
(Kirby Lee-USA TODAY Sports)

The open market changes everything 

During the first tech boom/bubble of the early 2000s, a number of companies identified the secondary ticket market, run at the time by regional brokers, as an opportunity for disruption. StubHub, Razor Gator, TicketsNow and Ticket Network came onto the scene looking to become an online marketplace for ticket sellers and buyers to come together in an environment patrolled by agreed-upon posting and selling rules. Big money followed these firms from notable investors, celebrities and venture capitalists, including Kleiner Perkins, Oak Investment Partners, Steamboat, and even former NFL quarterback Steve Young.

These firms changed the Super Bowl market quickly. Their growth was propagated on the public learning to accept ticket resale as a norm and not an evil capitalistic measure. As companies such as StubHub (now owned by eBay) and TicketsNow (now owned by Ticketmaster) made it more acceptable to sell tickets at the market-driven price versus a pre-set face value, sellers began to become aggressive in the Super Bowl market. New players entered the game.

The sellers 

Who are the sellers of Super Bowl tickets? Where do they originate and how do they play a role in the ticket price fluctuations?

Teams

Each team receives an allotment of tickets for the Super Bowl to do with as it pleases. The teams involved in the game, as stated earlier, get much more. In the past, these tickets would sometimes find their way on the market as the year went along. Currently, however, teams actively sell tickets through a number of channels, usually at the market price or near it. Many teams will sell the tickets as part of a sponsorship package or a “partnership” to a mega-broker/travel partner, a ticket broker, or through the NFL’s resale program.

Ticket brokers

The savviest of the group is the ticket broker. A number have handshake deals for tickets that go back decades. The most successful brokers are getting tickets from the teams and from major sponsors who sell tickets out the back door at a profit.

At the Tampa Bay Super Bowl in 2009, we witnessed one executive from a Fortune 500 company buy 80 tickets reserved for the firm and personally sell them to brokers for a massive gain. We know because he approached us with them. This kind of deal, unfortunately, is more common than one would think. This gentleman cleared over six figures in profit and is still employed at said firm.

Speculators

Much like any commodities market, traders are willing to take a risk on price movement. Many ticket brokers will participate in speculation on the ticket market by taking an order without actually having the tickets. They work under the assumption that they will fill the order at a profit.

Speculating on the Super Bowl is a common practice, though one shunned by TicketExchange and StubHub, each of which now requires in-hand tickets to sell through their marketplaces. Speculators are responsible for the big swings in ticket prices as the year progresses. When a speculator or a broker misses on an order, that order is considered “broken” and needs to be filled at a price higher than it was taken. When large numbers of orders break — as happened with the 1997 Masters, the 2006 Rose Bowl, the 2001 Super Bowl, and this year’s event — the supply on the market begins to dry up as those holding the tickets can charge more. This is the reason for the huge spike in prices this week, not the warm Phoenix weather.

Mega-brokers

As the secondary market has matured and become more universally accepted, it has created room for the mega-broker to act as a re-seller for the teams. These brokers enter into large sponsorship deals with the team that include advertising, travel packages and a number of tickets they will resell. Notable examples include PrimeSport and Ace Tickets. Interestingly, Ace is the “travel partner” of the New England Patriots, the team that once sued StubHub over ticket resale.

The league partner

The NFL, seeing the opportunity in secondary ticketing, formed NFL On-Location in the early 2000s. The On-Location program allows the league and teams to set prices that match the market along with league perks, including a pre-game tailgate party and packaging of hotels and other benefits.

To be clear, the On-Location program fluctuates in price and inventory much like any broker or mega-broker does, however they have safety as a major competitive advantage as they are getting tickets directly from the teams and league and have them prior to selling.

(AP Photo/David J. Phillip)
(AP Photo/David J. Phillip)

The market

As new entrants emerge, volatility increases. Winners and losers shift daily based on who gets in the game, how many speculation orders are taken, and which tickets are making it to the market and when.

Teams and the host city drive the market before anything else, even more than individual players’ star power. For instance, any combination of the Chicago Bears, Green Bay Packers, Dallas Cowboys, Pittsburgh Steelers and, more recently, Seattle Seahawks, drives prices up, as these fan bases are national and travel well. The location of the game also matters. Super Bowl ticket markets in Detroit, Indianapolis and New York were softer than we are seeing in the Glendale-Phoenix area, and the same was true in Miami, Tampa and New Orleans.

With so many players involved and seating locations unknown for so many, the market has moved to “zone” selling as opposed to selling an exact location. This is not to say exact locations aren’t available. They are, and it’s a major competitive advantage for the mega-brokers and On-Location sellers that allow them to deliver precise seat numbers at a deserved premium.

The market will usually follow fairly simple trends, as we saw this year with the standard price spikes occurring in the days following the divisional and conference championship rounds. Example: A ticket in the premium zone fluctuated from $5,500 per ticket in early December up to $7,200 following the conference championship games, before dropping back down to $5,000 later in the week as inventory hit the market. Those tickets are up to over $15,000 today.

This week speculators descend on the Phoenix area looking to fill orders and buy any additional tickets from those in the area. It is serious business: Many brokers and event companies hire private armed security to protect themselves and the millions of dollars in inventory they carry.

When location and teams come together, it can create a hectic market with more demand than speculators can fill. At Super Bowl XLI in Miami in 2007, the Bears and Colts drove the get-in price (the price those in the market use to gauge the health of the game) to over $4,000 two weeks before the game. That price settled at $2,000 per ticket and was one of the healthier Super Bowls in recent history.

As we write this, get-in prices are at all-time highs of over $8,000 per ticket. To compare, the last Super Bowl in Glendale (Super Bowl XLII in 2008) had get-ins as low as $1,100. Super Bowl XLVIII last year in New York/New Jersey saw get-ins come down to $1,300 the week of the game.

What does the future hold? 

The Super Bowl will continue to mature into a transparent marketplace, which will eventually push out the middle man. Handshake deals will eventually expire as executives from each side move on and, as a result, tickets will flow through official channels as deals between teams and resellers standardize. As this occurs, the market will become safer for the conservative buyer, while speculators will adjust and take risks with all parties.

That, of course, is their nature in any market.

***

Tony Knopp is CEO of TicketManager, where he is responsible for the day-to-day technology and management of over 30 million sports tickets annually. Tony previously held positions as an early member at StubHub and with AEG Worldwide, and has over 15 years experience in the technology and ticket markets. 

Disclosure: TicketManager works with customers on all aspects of their tickets from managing current inventory to purchasing inventory. As such, we do help customers find and purchase Super Bowl tickets. We do not, however, buy any tickets for sale or take any speculative orders. We help our customers buy from the aforementioned players and connect buyers with sellers we trust.

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