How The Yankees Profit Off Of The Secondary Ticket Market

Everyone is probably aware of the issues that we have had with the Yankees' handling of ticket sales for the 2009 season. Rest assured, as soon as the on-sale is over, we will spare everyone the around the clock coverage. For now though, something else has become apparent that needs to be written about.

As we have noted many times, the Yankees have made the business decision to cater to their full-season clientele in regard to ticket sales. Whether it was in the relocation, or availability of pre-sales and private workouts, those fans are taken care of. At face value, it seems like the honorable thing to do - the people who spend the most money get the best perks. However, looking a bit deeper reveals the Yankees full motives.

Back in 2007, a deal was struck between MLB and Stubhub, promising every team a cut of the profits from ticket resales on Stubhub's site. The Yankees are privy to this lucrative deal and have adjusted their ticket sale strategy to reflect it. Since the relocation process for the new Yankee Stadium began, it has been clear that the Yankees were attempting to "de-fragment" the stadium, meaning that they would move more people to full-season plans. Besides serving the obvious purpose of simplifying the rest of the ticketing process, this is an obvious way of positiong the team to secure more profits for each ticket sold over the course of the season.

To understand this idea, one needs to think about the following: who is more likely to sell a ticket to a Yankee game on Stubhub? Would it be the full-season ticket holder trying to figure out how to make it out to 81 games per year, or would it be the partial plan holder just happy to have a ticket plan? Obviously, full-season licensees are more likely to resell tickets in order to recoup some of their investment when they inevitably can't make it out to select games.

In the past, the Yankees were unable to profit from the secondary market that inevitably develops. The team was happy to collect their sold out gates and brag about huge attendance figures. When the deal was struck with Stubhub back in 2007, it changed the landscape of ticket sales for sports organizations. An entirely new revenue stream was created for the team, and it was done in a way that would not ruffle any feathers or receive any negative press. The majority of fans selling their tickets on Stubhub understand that there are significant commissions cutting into their bottom line, but likely don't realize they are glorified brokers for the team. Even if they do understand the logistics, they don't care because the Stubhub system is so well-designed and easy to use.

With each passing day, this "conspiracy theory" makes more sense. Why wouldn't the Yankees allow full-season and 41 game plan holders the first crack at purchasing more tickets via a pre-sale? These people are likely to view the opportunity as a well-deserved perk to their ticket plan that they must take advantage of. In their eyes, the new stadium means that people will be pining to see a game, especially the premium ones. The dollar signs light up in their eyes since they have already been stretched thin by their investment in the team. They are able to rationalize that if they lay out a little more money (and time, since they are now ticket brokers), they can recoup some costs and cut into the large investment they made to secure full-season tickets.

While the full-season licensee are buying up more and more tickets, the Yankees are laughing their way to the bank. They are employing their most loyal fans as ticket brokers and are double-dipping on the profits that they take from them - once for the initial sale and once via Stubhub. The PR campaign surrounding ticket prices in "half of the stadium" remaining at their old Yankee Stadium prices was all smoke and mirrors. The Yankees have made sure that most, if not all of these "cheap" seats will be sold out by full-season ticket licensees whether it be in the relocation process or the many pre-sales. When the Yankees commissions via Stubhub are counted at the end of the season, they are sure to have made more than face value for the seats, without having to do any extra work.

A quick glance at the Stubhub page for 2009 Yankee tickets reveals that more tickets are available for Yankee Stadum than any other venue, and most of the tickets are available in the Bleachers and the Grandstand. Looking deeper, many April and May games are selling for below face value for the "cheap seats" and the Yankees are fine with that. The team has guaranteed their initial cost of $12, $20 or $25 sales for those "same price as least year" seats, and are also collecting whatever undisclosed commissions that Stubhub is paying them. Once the weather warms up in the summer, the Yankees commission will only increase, as their ticket brokers season ticket holders will be able to raise prices.

Full-season ticket holders will probably read this instinctually defend their purchase, claiming that the Yankees are not taking advantage of them. Sure, if the tickets are resold on Ebay or Craigslist, or to co-workers, the Yankees aren't going to receive their piece of the pie. However, based on the sheer number of tickets for sale on Stubhub, it appears that most people are being used. They have foregone their chance to cut the Yankees out of the picture due to the fact that the Stubub system is so convenient. Stubhub has introduced a completely electronic ticketing system, so the full-season ticker holder broker on Stubhub doesn't even have to go through the sometimes stressful excercise of sending tickets through the mail.

The casual fan should not direct their ire at full-season ticket holders when general public on-sale day comes and there are very few affordable tickets available. Keep in mind that most of these licensees did not purchase the plans to profit off of their fellow Yankee fans. Their logic in upgrading to full-season was that they were guaranteeing the best value seats in the new Yankee Stadium, and they were locking in full playoff rights. To these people, selling tickets on the secondary market had little to do with profiting off of the average fan, and everything to do with recovering some of their investment in full-season plans.

The best suggestion we can give to the casual fan looking to attend a few games at the new Yankee Stadium is to be patient. The United States is still struggling through one of the deepest recessions in recent memory, and discretionary spending is lower than ever. While the secondary ticket market is sure to heat up in the summer when tourists (even in smaller numbers than in the past) come to the city, there will still be deals to be had.

The game-plan should be to scoop up some bargain tickets in April and May when full-season ticket holders are willing to take losses on their tickets due to factors such as cold weather and school still being in session. Let the tourists buy up the expensive summer games on Stubhub. If the urge to see a game happens to strike in the summer, go on Craigslist the day of the game and wait out some good deals. There are always people who have to unload tickets at the last minute and are willing to sell for face value or below. Also, don't forget to check out ticketmaster.com on the day of games for face value tickets, or even go up to the stadium to see if standing room only tickets for $20 are available.

There is only one way that Yankee fans can make the team pay for this non-transparent revenue stream, crafted to inconvenience the most loyal fans: not buying the full-season plans unless you plan on going to the games. The Yankees have their hands in the primary and secondary market, so think before you become an unpaid ticket broker for the richest franchise in all of sports.