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Telegrams, Ticket Brokers And Real Estate Sales Gurus

Yesterday, I decided to take a veteran sports executive to my keynote panel at Ticket Summit, one of the two broker conventions that happen in Las Vegas.

The veteran sports executive left halfway through the presentation, which leads me to believe he was so mad at the topic of conversation by brokers that he jumped into his horse & buggy, got to the telegraph office to wire his displeasure, and eventually had chill out by having a long, hot bath draw by boiling several tubs of water behind the cabin at the river, then carrying it inside to be put into one large tub.

I mention those three methods in which he left for a specific reason. As tools, technically, they all exist as options today. Yet few, if anyone, actually uses them as their main tools to service their needs. The telephone is going the same route, in a differing manner, as its ability to change as tool, as be an adaption point, while serve either as a benefit or a demise to those trying to sell something with it. The phone is just another tool. Same as social media or whatever else comes along. The phone isn’t required to do anything, nor will it ever be. Because another tool may come along that replaces it entirely.

This same veteran sports executive voiced his surprise that ticket brokers were as organized as they were when he came into the exhibition hall at Ticket Summit. His view is one of the old broker on the street, scalping tickets. Now, most brokers look like a version of commodity traders on Wall Street. They have better pricing measurements than the teams typically do, know what a product is worth, and often have better analytical structures in place. All without a staff of 75+ in overhead.

I bring up this as a starting point of continual confusion that I have toward all of the major leagues: If you have upstarts who are able to take your product, sell it for 3.5 times its value, and utilize tools which make the sales process more efficient, why wouldn’t you hire them? Just because someone can smile and dial 100 phone calls a day doesn’t make them efficient. And yet, ticket brokers are still seen as a scourge to major league teams.

The idea that they are just selling one-off ticket purchases is a misnomer as well. Often, brokers are selling far better experiences in online purchasing, creating ease of use. And they don’t shut off ticket sales to the best locations just to make their customers call them on the phone. They usually charge a premium price for those tickets. Some secondary ticket companies even have weather reports and other scientific data analysis, in order to know when to sell tickets, or what price they should be measuring demand at for each individual game. Sounds a bit more high-tech than what teams tend to offer in terms of overall buying habits.

I absolutely love the traditional argument voiced to me by sports executives:
Yeah, but those are MY tickets that they are selling at 300% higher on the secondary.

My response every time that I hear it: No. You sold YOUR tickets 300% less to those brokers on the primary because you didn’t believe that anyone would buy them at a higher price.

My question to the peanut gallery: If someone found a way outside your industry to perfect your product and sell it for higher, why aren’t you hiring them away?

This is the same turning point question that the auto dealers missed in the late-1940s. The Big 3 were so fixated with stopping Forrest Tucker from creating a competitive automobile, using legislation and legal processes to stop him, that no one sought to hire Tucker and bottle up that lightning for themselves. That’s why those Big 3 lost out and continue to lose out to the Japanese and foreign imports, because instead of constantly innovating their product for change, they merely continued to go more insular on the practices that were no longer relevant as time went on. Sport sales is no different. Adapt or die.

Brokers right now should be considered a bellwether. They have harnessed their ability to use something that billion dollar league and franchises have continued to neglect in favor of an inside sales phone model: The Internet.

In fact, there is no difference between the primary and secondary. Those lines blurred the second that Google made it easy to search and find what you want. Instead of utilizing this tool, teams have for the most part ignored its capabilities. Otherwise, they’d be dominating Google SEO and AdWords, instead of lagging behind brokers.

There are three ways to react to something:
Innovation, legislation or consolidation.

Teams have chosen the last two, but avoided the first one. Why? Because innovation is messy, and it takes time without certainty of success.

In the last two months, I’ve attended NACDA, the SBJ Ticketing Symposium, ALSD Conference and Ticket Summit. Only TS was discussing how to deeply dive into different analytical structures from Internet search and advertising options. The rest were fixated on phone calls. Yes, that tool is important, but it cannot be the only tool in your arsenal nor even the dominate tool now. People buy $4,000 worth of plane tickets. Sports tickets are no different. Yet a $3 billion valuation on the Dallas Cowboys doesn’t mean that the team is willing to spend $5,000 a month on Google Adwords to dominate top searches by customers for their product. Brokers do, why not franchises? That to me, seems wrong-headed.

I’m sure that when flying cars are perfected, the tire industry will be up in arms, ready to convince auto dealers that flying cars are unsafe and will hurt jobs. The truth is, technological innovation is part of creative destruction. It will happen whether you want it to or not. Look at Uber/Lyft and cab companies. Cabs didn’t want to create a mobile app, so they failed, and are now a third choice for many consumers. Now cab companies are working through legislation and other methods to hinder Uber/Lyft, instead of attempting to adapt and innovate.

The keynote panel on The Future of the Ticket Industry had a lot of great points brought up. Especially when it was mentioned at what percentage season tickets are purchased by brokers. Almost 50% in some cases of all sports season tickets come from brokers. What does that tell you about the sports customer? Just because you want them to buy a full slate of tickets doesn’t mean that it fits their needs. No matter how many “answers” to their objections that you have.

Ticket brokers are starting to become more sophisticated. I really wish that league offices would come to one of the conventions, hold a “draft” and just select each broker to buy out, gaining their technology and insight. Think of how far ahead each team would be if they actually utilized the Internet fully – the majority of the time, the goal seems to be to have a person talk with someone online. That’s a 1990s or early-2000s model. And times have changed. There’s this whole thing called Google.

Innovation is something that people may not recognize or be able to capitalize on. After the panel, I sat down with a 30-year veteran of the ticket resale industry. Even he didn’t see that last minute ticketing was going to be as huge as it has been until now. But at least he’s trying and the next time something comes around, he feels he’ll be more apt to listen.

There seem to be a certain segment of people who want to think for themselves in this world and others who simply want to have their own beliefs re-enforced. Down the hall from Ticket Summit was a real estate sales guru seminar. Thousands of people going to hear from several speakers about how to develop the best “closing lines” and how to “win the sale.” There are people who do things to improve their lives in what they do, and others who simply want to be told that they are a winner. At Ticket Summit, some real innovation at cracking the code of what customers want is happening. Yet, so far, few of those owning the original product that is being resold for larger amounts online are listening. Seems very strange indeed.

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  1. July 17, 2015 at 1:44 pm — Reply

    I know that we share similar views on a lot of this stuff and the hate of brokers can be well founded, but the hate blinds the primary ticket provider from looking at how they can capitalize on the best practices of brokers.

    As many times as I talk with teams and executives, we have good, productive conversations. But no one ever asks me how I was able to sell $10M in tickets by myself in one year. I would happily give them the answer if they would ask.

    Its story. The brokers tell a better story than the teams do about scarcity and value. There are psychological principles that brokers either know specifically or inherently and they use them.

    I bet that I could go into almost any venue in the country and find 5-10 ways within a day that would improve their businesses and their revenue by 10% just by taking best practices from other industries or other areas and making them standard. Likely, the most productive one would be looking at how brokers sell tickets at these premium prices and using the power of the primary market to help capture more of the value for the primary ticket seller.

    But, alas, that still seems like a little ways down the road.

  2. Matt
    July 21, 2015 at 11:53 am — Reply

    I think you’re missing the problem — it’s not that the teams aren’t willing to hire these guys, it’s that these guys aren’t willing to work for the team.

    Why would a broker that knows his business as well as you say take a $50k/year job with a sports team that forces him to work specific hours, report to a boss, and most importantly — only sell tickets for one team whose demand varies based on unpredictability of sporting event outcomes?

    It’s like a gas station trying to hire an economist with an oil-and-gas background. Thanks, but no thanks.

    • Troy Kirby
      July 21, 2015 at 12:17 pm — Reply

      Why would a team only pay $50k a year to someone who can drive millions in sales? I’m actually talking about buying out brokers for their expertise and technology, not sitting them down like a standard ticket sales rep.

    • July 25, 2015 at 12:59 pm — Reply

      Troy’s comment is actually pretty appropriate.

      Let’s say that you took the Clippers and Lakers and combined they bought out someone like Barry’s and used that expertise to drive revenue and sales to both teams and the Staples Center. All parties could win.

      In truth, the answer is even more simple though.

      It is more a matter of intelligent and flexible pricing, understanding markets, and in many cases, relationship building. Which in the end comes down to an expression of value.

      Unfortunately for the primary market, their insistence on pricing by sections and packages keeps reinforcing this chasm between the money they are making and the premium that brokers are making.

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