On Monday, the New York Yankees publicly divorced Ticketmaster in favor of StubHub as its official fan-to-fan resale partner. Ticketmaster will still be the official primary-market site of the team, but for anyone looking to resell a ticket to a Yankees game, StubHub is the place, and it will be very hard to sell it through any other platform, because print-at-home PDFs will not be honored.
The Yankees said the change reduces fraud, and that the new system will better serve fans. But the latter point just isn’t true.
As part of the new long-term partnership with StubHub, which kicks in for the July 15 home game against the Red Sox, the Yankees will implement what is known in the industry as a “floor,” a minimum price below which you are not allowed to sell tickets. (And although there is a floor, there is no ceiling.) The floor formula is this: 50% of the lowest listed season-ticket price in the section. That means if you, a season ticket-holder, are looking to sell an $80 ticket, you cannot sell it for less than $40. If you try to list it for less, the system won’t let you post.
Yankees president Randy Levine, in a press conference announcing the StubHub deal, responded to a question about the floor by saying, “At the end of the day, it’s almost infinitesimal the number of people that that will affect.”
StubHub CEO Scott Cutler, sitting next to Levine, then got very specific: “Today we have 51,000 current listings of tickets available. Using this policy today, only about 100 of those tickets would be impacted.”
That number wasn’t accurate.
Lisa Swan, who runs the Yankees-and-Mets blog Subway Squawkers with a friend, put in the grunt work and found more than 500 tickets listed on StubHub on Monday for $6 apiece. By looking at the Yankees season ticket prices listed, Swan could see that $6 is below the floor, which would be $7.50 for bleacher seats, the cheapest section available, and $10 for grandstand seats. See Swan’s table below, which simply takes the listed season-ticket prices for every section and divides them in half.
And those 500 tickets were just in the cheapest two sections alone. On Thursday, Swan and Yahoo Finance looked at tickets for a single game, July 19 against the Baltimore Orioles, in a pricier section, Terrace Level 312, where the minimum season ticket price is $50. We found 30 tickets selling for $8, well below the floor, which would come to $25. It suggests that StubHub’s claim that the floor won’t have a dramatic impact on resale prices is highly suspect.
Yahoo Finance reached out to StubHub and the Yankees to get Cutler’s claim clarified. A spokesperson for StubHub at first said that the minimum ticket prices Swan used are incorrect, because the minimum prices “are based on the lowest season ticket price anyone pays in each section” and that those prices are not publicly listed. But they are publicly listed, at this page.
The suggestion is that if anyone in a section is getting a special deal on tickets, below the price listed publicly, it might make the floor lower. But the Yankees would not comment on their seat pricing.
StubHub also said that Cutler “misspoke” and meant to say 100 listings, not tickets, the distinction being that each listing could contain multiple tickets. StubHub on Wednesday, in an email exchange, raised the number to 300 tickets that would currently fall under the price floor. That number does not appear accurate either—a look at tickets just for today’s game showed 62 listings for grandstand tickets ($20 face value) at under $10. It’s highly unlikely that only 300 Yankees tickets of the 200,00 now for sale on StubHub fall under the floor. “The claim is sheer nonsense,” says Swan.
But the larger story here is bigger than the precise percentage of tickets affected by the floor.
StubHub, since its inception in 2000, has always called itself an “open marketplace.” By agreeing to the Yankees’ floor, StubHub has contradicted this positioning. It is a major, public shift in identity for the eBay-owned secondary market site.
Cutler appeared to admit this at the press conference. “We recognize and acknowledge that the Yankees have an interest in maintaining what they perceive to be the value of the brand,” he said. “And this has been an important part to enable us to have a partnership. We fundamentally believe in an open and transparent marketplace… We’re also balancing that interest of buyers with the interests and demands here and the requirements of the holder of the brand, the Yankees.”
Translation: StubHub kowtowed to the Yankees (and had to do so in order to score the deal) for a sweet pact that establishes StubHub as a “major marketing partner” of the team. That will include signage in the stadium and other goodies. StubHub is now among the top-five most important Yankees sponsors, Randy Levine said, adding, “We’re going to be doing a lot of things together.”
The group that gets most hurt by the Yankees’ change is Yankees season ticket-holders, who are, “going to have an even tougher time recouping the investment they made in their seats now,” says Daniel Marcus, CEO of fan-to-fan ticket network SeatSwap. “Especially with StubHub still taking their 15% cut of a sale that already represents a 70% loss to the ticket holder.”
In a time when the team is in second-to-last place in the AL East and attendance was down 6.5% last year (though still good enough to be best in the AL) and is down again this year, an $80 ticket to a non-rivalry Yankees game might only fetch $30. But the owner of that ticket can’t sell it for $30. The Yankees aren’t allowing the market to dictate the resale price.
Tony Knopp, who worked as a sales executive at StubHub for three years, was shocked by the terms of StubHub’s deal with the Yankees. “StubHub’s stance has always been that the ticket is your own piece of property, and you can do what you like with it,” says Knopp, now CEO of software company InviteManager, which helps corporations manage their tickets to sports events. “Now that the Yankees are dictating what you can and can’t sell it for, this is a gigantic shift. Am I the seller, or are the Yankees? Now the ticket is no longer a good that you can sell, it’s just a license. This is a departure from everything StubHub has been preaching for 16 years. They must have been really getting hurt on the Yankee deal.”
This was not the first time StubHub ever implemented a floor—it set a floor of $6 for the rest of Major League Baseball. But with the cheapest Yankee season tickets publicly listed at $15, the new floor would be $7.50. “This is not the first time we’ve had price minimums,” StubHub says. In addition to the $6 MLB floor, “there are a number of deals we have in the UK where we have price minimums.”
StubHub’s Cutler, at the Monday press conference, called the Yankees deal “a momentous occasion.” The company did not comment on whether the occasion also contradicts StubHub’s longtime brand identity as an open marketplace.
Earlier this year, New York Attorney General Eric Schneiderman announced he is investigating the NFL over anti-competitive practices on its own ticket-sale site, NFL Ticket Exchange. His investigation is centered around one specific issue: price floors.
As part of the StubHub deal, the Yankees are also going 100% mobile-only for delivery of re-sold tickets, meaning no paper tickets will be accepted, apart from old-fashioned heavy-stock tickets from the team’s box office. They are the first MLB team to do this. The stadium will not accept any printed-at-home tickets, which looks unsympathetic to fans who, for whatever reason, can’t or don’t want to use mobile ticketing. (Some fans may not own smartphones.) When asked by a reporter about such fans, Randy Levine said, “I know people like you have nothing significant to write about.”
Daniel Roberts is a writer at Yahoo Finance, covering sports business and technology. Follow him on Twitter at @readDanwrite.