Thursday, June 07, 2012

Thuuuuh Yankees Lose (some money)!

The Yankees are unhappy.
There are empty seats at the cavernous hippodrome of New Yankee Stadium, and someone's got to be to blame. It's not the economy. It's not the fact that a single game ticket in many sections costs more than a monthly car payment. It's not that the Yankees haven't been terribly interesting to watch this year.
No, the villain is StubHub.
StubHub, you see, is MLB's official ticket resale partner. The deal MLB made with StubHub was a simple one: You get to be our official reseller, and we get a chunk of the action. And because it's an official partnership, the teams are locked into it. Even those who thought they'd be selling out every game and getting a slice of the resales, too. Even the Yankees.
The Yankees are not selling out every game. Tickets for Yankee games can, in fact, be found on StubHub for less than face value. This is not a surprise; you buy a season ticket package and then life surprises you,  such that the day you thought you were going to the Stadium to watch Yankees-Rangers is instead the day your in-laws suddenly need to get picked up at Newark International right around first pitch. So, you put the tickets up on StubHub - they're yours, after all. You bought 'em - and mark them down, and hope to get some of the cost back because God knows the Yankees aren't going to be understanding about that sort of thing.
But Yankee President Randy Levine is furious that StubHub (which, incidentally, does not set prices), is selling tickets for Yankee games for below face value. It is an outrage. It is an affront. It is something that he cannot let stand, and he has promised a "fan-friendly alternative" from the depths of his high dudgeon.
Now, color me crazy, but I think "cheap tickets" is about as fan-friendly as it gets. Also, there's that whole "contract with MLB" thing going on there, not that the Yankees have ever let that sort of thing stop them. What Levine is really saying is that he's tired of his business partner undercutting him, and he's going to get that money back by hook or by crook. "Fan Friendly" is just the barest cynical nod to PR.
But why is this happening, and what is Levine so upset about? It's simple.
Let's say you're Joe Fan, who wants to take Junior to a ballgame. You go to the official Yankee website and you see two good seats available for $500. Sure, that's a couple of car payments, but it's going to be a special day with Junior, and they're really good seats.
Then, Joe checks StubHub and finds that there are seats in that same section going for $300. Why are they going for $300? Because Bob Seasonticketholder can't make the game that night, say, on account of his kid's dance recital, and he wants to get rid of the tickets. Joe sees the tickets, sees the location, and buys them from Bob through StubHub.
So far, so good. Joe wins, because he got great seats for 40% less than he thought he'd have to pay. Bob wins, because he gets something back on those tickets, which he was ready to take the full $500 loss on. The only loser here is Randy Levine, whose desired outcome was that A) Bob ate his tickets and B) Joe bought from the ticket window, ensuring that the Yankees sell 2 sets of seats, not just one.
Needless to say, in every instance where Joe is not actively deranged, he's going to buy from StubHub. It's the sensible thing to do. The model Levine was counting on was one where Yankee Stadium sold out every game, pushing the prices in the secondary market higher due to scarcity. But that's not happening. For whatever reason - the Yankees' insane ticket prices, the economy, the general blah nature of the team, fear of having John Sterling bleat "THUUUUHUHUHUUHUH YANKEES WIN!" in your ear, the games aren't selling out. And when you can't sell your stock of a luxury good (like a baseball ticket), then the secondary market for that same good is going to come in lower than the primary.
It's basic economics. It is, in fact, the free market at work in all the ways it's supposed to, finding an equilibrium between buyers and sellers. It's just not the one the Yankees want.
But let us not forget, we are dealing with the Yankees here. We are dealing with the team that took $800M in public money and perks to build its stadium, that sputtered about "socialism" and UnAmerican badness when discussing the luxury tax, screaming to high heaven when the oracle of the free market suddenly turns against them. Here's a news flash, bunky: You don't get to get it both ways. Or maybe you do, but hey, I'm at least going to make fun of you for it.
And in the meantime, it's enough to make a man root for the Red Sox. Or StubHub.
Post a Comment
There was an error in this gadget