Toronto Blue Jays: No surprise with StubHub partnership benefits

An investigative report from the Toronto Star and CBC shows the Toronto Blue Jays receive a cut from the secondary ticket market, which should not come as a big surprise.

It should come as no surprise that an organization will do whatever they can to ensure they receive the larger slice of the revenue pie and pro sports is no different. That is why teams like the Toronto Blue Jays see the popularity of the secondary ticket market and want to make sure they are not missing out on the action.

It was reported in a joint investigation by the Toronto Star and the CBC that the team and StubHub have an agreement where the Blue Jays receive a share of the profit from tickets sold.

The issue fans seem to have is that unsold tickets are put on the website by the team for above face value and in doing so they receive the revenue from the ticket they sell, as well as their cut from the deal with StubHub.

Out of all the regular season games, the home opener is the only one fans will go out of their way to get on the secondary market. The report actually suggests there were a high number of tickets available, but they were well over the face value.

"At least 20,519 tickets to the opening day game — 45 per cent of all stadium seats — were posted for sale on online ticket reselling platforms StubHub, VividSeats, TicketsNow and SeatGeek, a detailed analysis of online ticket listings over the past two months shows.The average price for those online seats was 205 per cent of face value — a large markup that will soon be illegal in Ontario."

This is not only an issue with the Blue Jays, but almost every Toronto sports team and concerts that scalpers can make a big profit off of. So why are the Blue Jays being singled out in all of this?

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Well, they are the only team that has an official partnership with StubHub. When the agreement was made exactly a year ago, it was to provide fans with a reliable place to sell tickets or find tickets not available on Ticketmaster.

The problem is that not only does the team make money from the original sale, but they draw a profit on top of that from the ticket being sold on StubHub. Unfortunately, the amount is not disclosed, but considering how much money tickets go for (in US dollars) it is probably significant enough for the team to make the deal.

It is no secret that the relationship between Blue Jays fans and ownership always comes to blows when discussing how much the team puts towards payroll. It does not help that ticket prices have increased the past couple of seasons.

Now if that revenue is going to help pay for upgrades to the stadium which is something the team has discussed. The issue is that the funds will have to come from ownership because no public money would be involved. However, it the team wants to get the most bang for their buck, it needs to put in the investment.

While the report from the Star and the CBC did not include a comment from the team, in an interview with Sportsnet‘s Shi Davidi president Mark Shapiro gave his thoughts on how the secondary market impacts the team’s revenue:

"“As we progressed in our business model, we didn’t think it was advantageous to have 50 per cent of our tickets controlled by the secondary market.The main reason for that is a lot of tickets just get dumped and the integrity of pricing for season-ticket holders and the average fan goes way down and the most desirable tickets get sold at a maximum premium.We wanted to create pricing and packages that benefit our fans and provide them with alternatives and values that meet their individual needs.  Our changes are meant to benefit them instead of the secondary market.”"

It appears that while they cannot stop scalpers from making an easy profit, the Blue Jays decided that as long as they can earn a slice of the revenue pie, it is not as big of an issue.

How have other teams tried to address the problem?

Last year, the Toronto Maple Leafs announced they were increasing ticket prices not only as a way to make money, but to save fans money. So how exactly did they think that would happen?

In an interview with Morgan Campbell of the Toronto Star, MLSE chief commercial officer David Hopkinson believed the best way to combat against scalpers was to take a chunk out of their profit.

"“If we don’t price the tickets appropriately versus what the market is going to pay for them, guess what happens,” Hopkinson told Campbell. “The tickets don’t get cheaper. Just other guys make the money . . . and that doesn’t help your hockey team. That doesn’t help us get better.”"

An interesting point Campbell notes is that the biggest markup on the secondary market for Leafs tickets are the upper-bowl seats.

"“Where upper-bowl seats average $80 per game as part of season packages, they average $108 as single-game seats and $141 on the secondary market. Lower-bowl seats, meanwhile, average $195 under a season-ticket package, $234 at the box office and $250 resale.” Campbell writes."

Unfortunately, that decision hasn’t really seen the impact fans were probably looking for. The reason? Demand for Leafs tickets are higher than ever with the team having one of its best seasons to date.

Despite playoff tickets not being on sale yet, StubHub has them listed, starting from $247 and increasing up to $2,000 if the team reaches the finals.

So if raising the base price for scalpers to pay for tickets isn’t the solution, then what is? How about a system that regulates how much secondary tickets can be sold for.

StubHub might not be interested in that because it takes away from the profit they make, but if it provides a more affordable option for fans then what’s the harm? According to another report by the CBC, it could be the relationship StubHub has with scalpers.

One team appears to have found a solution to reward fans for their loyalty; the Vegas Golden Knights. The one team that would benefit the most from trying to squeeze as much profit given the $500-million expansion fee. Instead, they have decided to do away with that.

This takes care of people who try to flip their season seats in order to profit off of them, but how do they regulate it. Sinbin Vegas provided a great explanation:

"“Golden Knights tickets are only available using an app called Flash Seats. To list a ticket on StubHub to a Golden Knights game, you must log in to Flash Seats and upload the ticket, before you sell it.”“So, if the Golden Knights restrict the resale of a ticket on Flash Seats, it’s ineligible to be sold on StubHub. Fans can sell them on other marketplaces such as Craigslist or other third party ticket sites, but taking out StubHub will dramatically reduce the number of resold tickets.”"

Why would a team like the Leafs allow another company to list tickets on their website for whatever price? The problem is they have no control over how much they can be sold for and who gets tickets.

Somewhere along the line, the system will have to change but it might be up to fans to say or do something about it. Otherwise, teams will get exposed for worrying about profits rather than ensuring an affordable product like the Blue Jays were accused of.

It is a constant battle, but one that is not going away anytime soon.

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What do you make of the Toronto Blue Jays’ agreement with StubHub? What is your idea to avoid scalpers making big money? Let us know in the comments below.