Even the most avid of sports fans probably won't look back on 2009 as the year of the Yankees, the Tar Heels or the Lakers. No, as we look back on the year, the lasting impression is most likely one of resounding financial instability (or worse). Clearly it was a devastating year for businesses, homeowners who want to sell and, most importantly, the unemployed. Even as the economy begins to stabilize and, in some sectors improve, times are still tough and there are many people hurting.
But an interesting trend has emerged from the clouds of the recession, a silver lining for sports and music fans. It turns out that more fans are going to more events. And, perhaps more tellingly, they are doing so at lower prices. That's right: people are going out more, and they are doing it for less. It is a dynamic that is particularly present in the so-called secondary ticket market, a market defined by the sale of tickets after they've been purchased directly from a team, band or venue. A market I know well considering my current post as the president of StubHub.
The average prices of tickets sold on the secondary ticket market have been coming down for the last two years. Last year, when the recession started, prices of tickets sold on StubHub dropped 10% compared to 2007. This year, prices have declined an additional 13% versus 2008. These two decreases amount to a two year discount of over 20% on tickets to sporting events and concerts.
Now, some may think that prices on the secondary market are so high that the aforementioned discount doesn't amount to much, a line of thinking countered by the data. In 2007, Forrester Research asked fans who bought tickets on the secondary ticket market what they paid relative to the price printed on the ticket, the so-called face value. While 60% of those surveyed paid above face value, 40% paid face value or below for their ticket (Mulpuru, Hult, & Johnson, 2008). No doubt, if the survey were to be redone this year, the percentage of fans that paid face value or below would be much higher than 40%.
And while we don't actively track face value on StubHub, we've seen quite a few cases where fans are finding opportunities that have never existed before. Despite the hoopla in February over fans having difficulty getting tickets to see Bruce Springsteen in New Jersey, StubHub customers were able to see him in Greensboro, NC for $1. Think about it -- The Boss for a buck. That's something that has never happened before.
And for sports fans, the opportunities have been even more plentiful, turning 2009 into the year of the sports bucket list. From NBA Finals tickets in Orlando selling for less than $50 to World Series tickets purchased for $100, almost every major sporting event boasted average ticket prices less than the previous year.
So how is this happening? It's a bit more complicated than just supply vs. demand. While demand has increased, prices have come down because what has also increased is supply. This year, more sports fans have opted to sell their season tickets instead of giving them away or, more commonly, letting them sit in a drawer unused. In concerts and theater, more fans have opted to sell tickets they cannot use. And StubHub has the largest supply of resold tickets on the Internet. The increased supply has made sellers compete with each other by lowering price. Thus proving the axiom about competitive markets: When sellers compete, buyers win.
And so, the next time you sit and find yourself worrying about the economy, consider taking advantage of a truly free market and buy a (cheap) ticket to see a great live event. If nothing else, sports and music can be a great way to forget about stagnant stocks or a rumored layoff, helping you invest energy in something that has survived far more ups and downs than the market ever will -- loyalty to your favorite team or band.