Unlike Super Bowl XLIX, NCAA Final Four May Not See Tons Of Short-Selling
The NCAA Men’s Basketball Final Four in Indianapolis may prove that cooler heads are prevailing on the volatile secondary ticket market, coming so soon after a reselling nightmare with Super Bowl XLIX in Phoenix.
While Wisconsin, Michigan State, Duke and Kentucky would normally cause a vortex of reselling demand, as well as a lot of short-selling, there are some lessons-learned from Super Bowl XLIX which are revealing themselves on the secondary market this week. Namely, that resellers may be skeptical that they can count on selling the tickets prior to actually buying them from the official distribution channel. This short-selling scenario caused resellers to lose millions at Super Bowl XLIX, and class action lawsuits already being filed as a result.
SeatGeek Communications Analyst Connor Gregorie doesn’t see the same spiking trends that happened in Phoenix with The Super Bowl a few months ago.
“There was a bit of a price spike over the weekend, but that looks more like healthy demand from the fan bases of four college hoops powerhouse schools than a short-selling issue,” he said.
According the SeatGeek, here is The NCAA Men’s Basketball Final Four Secondary Market Data from January 1 to March 30, 2015:
Full Strip Average: $884.18 MLP – $399.10 GIP – 4,272 INV
Semifinals Average: $563.08 MLP – $255.01 GIP – 3,257 INV
Championship Average: $509.95 MLP – $206.97 GIP – 3,190 INV
The same official distribution channels that controlled Super Bowl XLIX also control the NCAA Men’s Basketball Final Four inventory. That legacy may cause brokers to believe that tickets will not be released to fulfill orders, therefore a short-selling engagement on the secondary may be non-existent. Therefore, the majority of the ticket inventory out there are ones that the broker has in-hand, instead of speculating the market and driving up the overall price.
ScoreBig’s Chief Commercial Officer David Marcus doesn’t think the short-selling is happening for the Final Four, basically because of fatigue and inventory on the marketplace.
“While an overwhelming majority of tickets are now north of $1,000, and the lowest mark-up on a ticket is 3.5 times the face value, we don’t think this Final Four market will see the same spec selling, and resulting price run up, as we did with the Super Bowl,” Marcus said. “First, there’s a hangover from the Super Bowl, no doubt. If you look at StubHub now, you won’t see many, if any, sellers listing zones.”
Marcus points to the cheapest tickets on the secondary being listed at $386, with prices topping over $8,000. That means that on average, tickets are posted at a 9.5 times face value with the lowest mark-up being a 3.5x face value.
“The Super Bowl is unique in that supply is almost entirely controlled by a single seller,” Marcus said. “That’s a formula for massive inflation in a short market. That dynamic doesn’t exist here with the Final Four, where tickets are broadly distributed.”
TiqIQ CEO Jesse Lawrence doesn’t believe we’ll see a similar secondary debacle to what occurred at the NFL’s largest event, based on the amount of seating inventory available for The Final Four that wasn’t available for The Super Bowl XLIX.
“While there will always be speculative selling for events like this, the higher volume of events and total inventory for the final four as opposed to the Super Bowl means there will likely be enough supply for brokers to fill and a lower likelihood of a spike outside of the expected range,” Lawrence said.
At least two of the four athletic departments also have anti-reselling restrictions in place for access to their donor ticket requests. They require the actual donor to show up, in person, to collect the ticket order. This makes reselling impossible. It shifts less opportunity for resellers to have access to what small seat inventory may be available. Thus eliminating a short-selling opportunity that may have existed in years past for resellers who sold what they didn’t have, counting on buying it later at a lower price from another vendor.
One factor that ScoreBig’s Marcus highlights is that most fans of the Final Four teams likely bought their tickets within the last 48 hours of the Elite Eight, thereby meaning that peak demand has already passed on the secondary.
“With just six days before tip-off in Indianapolis, we think prices have topped out,” Marcus said. “And we wouldn’t be surprised to see them drop as Saturday approaches.”