HUFFINGTON POST

Justin Cener's Crowd Seats: The Groupon For Sports Fans

04/07/2012 03:25 pm ET

Justin Cener may be a one-man team, but he's willing to take on the likes of Groupon.

Cener built his Crowd Seats flash-deal site with a niche: He traffics exclusively in tickets for sporting events. His hope is that subscribers with a basketball jones, baseball fever or any other fan malady will click when his deals drop in their inbox.

"I'm confident the whole impulse situation will drive sales," the small-business owner recently told The Huffington Post.

Cener bills Crowd Seats as the first daily-deals, sports-only outfit. Already operating in Los Angeles and New York, Crowd Seats launched in Boston, Chicago and San Francisco last week. The site runs on the same concept as Groupon or Living Social -- without the randomness. Customers don't have to wade through a buy-now flood of manicures and helicopter rides to find the games.

"You'll only be getting targeted emails for something that you prefer," he said.

Registrants access the deals mostly through the emails or on the website. Discounts can climb to 90 percent, Cener said, but most of what the site featured recently was 40 to 50 percent off the original price. Among the offerings: $96 face-value baseball tickets to the Twins at Yankees game April 19 for $48 and $72 face-value basketball tickets to the Magic at Celtics game April 18 for $40. (That's what-you-see-is-what-you-get pricing, with no added fees.)

Cener, a 24-year-old Rutgers graduate, began his small business out of Los Angeles in June. The site built up a base of 11,000 members in Los Angeles and New York, then added 2,500 in last week's expansion, he said. Philadelphia and Washington, D.C., are next.

With a modest $9,400 in sales so far, he maintains a low-overhead model. He keeps no inventory. He gets tickets on consignment from brokers and takes 25 percent of the sales. He also pays a $2,400 annual fee to access a broker-to-broker ticket network. Cener said he receives tickets from a few teams as well, but he declined to identify them. Both brokers and teams do not like to offer discounted tickets to regular customers who pay full price, so that leaves a middle-man opening for Crowd Seats, Cener said.

One rookie mistake he probably won't repeat is in the way he advertises. He shelled out $6,000 for air time on ESPN radio and got an "underwhelming" response. Now he reserves his marketing for pay-per-click advertising on Facebook and by sending out flyer-bearing interns to sports venues. "I'm not bleeding money," he said.

Sports economist Andrew Zimbalist of Smith College told The Huffington Post that Crowd Seats' success could hinge on how it competes against the teams' increased use of dynamic pricing, in which prices rise and fall according to demand. "It's something that can be made to work," Zimbalist said of Crowd Seats.

Now that the baseball season has begun, Cener could also face more competition from resale platforms like StubHub. It is widely held in the industry that baseball accounts for much of the distressed ticket inventory because of the greater volume of games. Basketball has its share of cheapies, too, especially among non-contenders.

On secondary market sites last week, even Cubs games were available in single digit prices. New Jersey Nets basketball tickets could be had for a penny on StubHub. But the low-end isn't Crowd Seats' stock-in-trade. Cener said he's focusing on higher-profile games with better seats ("no nosebleeds") at a steep discount.

Tickets are time-sensitive, the entrepreneur explained. Teams and dealers are motivated to move the supply. That makes Cener's service easier to provide.

"A fair price and a great matchup," he said.

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