UWinnipeg researcher looks into anti-scalping laws
If you’re a sports fan, chances are you’ve bought or sold tickets to a game through a third-party website like StubHub or Kijij.
As a former Winnipeg Jets season ticket holder and longtime Faculty of Business and Economics member, University of Winnipeg professor Phil Cyrenne has always been intrigued by the reselling of sports tickets.
In his latest research article, released earlier this year, he explored anti-scalping laws and the selling of season tickets by professional sports teams.
“Part of the problem (with season tickets), is they (teams) have to set prices for games when they’re taking place in the future. That’s the fundamental issue,” he explained.
Cyrenne argues that unlike futures contracts, which can be traded, season tickets are a bundle of forward contracts you’re not supposed to trade. However, this is not often the case.
Because season ticket holders need a return or some sort of benefit for giving money upfront for games in the future, tickets are often underpriced and subject to having changes in value by the time the game actually takes place.
“They’re trying to forecast what the value of the tickets will be,” Cyrenne said. “But what happens if the Winnipeg Jets, for example, go out of the gate and win a bunch of games? It affects the ticket prices.”
Scenarios like this ultimately lead to reselling at higher prices than originally priced by teams.
To avoid these issues, he examined a number of alternatives to selling season ticket contracts, ranging from auctioning individual game tickets to the highest bidders before every home game to treating season tickets as a bundle of futures contracts or as financial options.
However, alternatives like the auctioning of individual game tickets will never catch on with North American sports leagues, Cyrenne said, because player contracts are partially or fully guaranteed.
Instead, teams are looking to make scalping harder or introducing their own solutions.
Cyrenne used the Winnipeg Jets as an example, noting the team implemented paperless tickets and have their own ticket exchange for sellers looking to resell tickets.
“Teams themselves have recognized they need a vehicle to exchange tickets and sellers have admitted that would be useful,” he said. “Teams want it to be done, but not fundamentally change their ticket distribution system.”
Cyrenne admits scalping will likely always be a problem in the sports world, despite teams’ best efforts to curb it.
“As long as there’s a difference from forecasted (prices), there will always be a market (for reselling).”