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Yesterday, StubHub and MLB Advanced Media announced a renewal of the deal that makes StubHub the official reseller market for baseball fans, but a StubHub spokesperson said that three teams had opted out of the deal – the Yankees, the Angels, and the Cubs.

Well, the Cubs say that isn’t exactly correct. At least not yet.

“We’re continuing to explore our options,” Cubs spokesman Julian Green told ESPNChicago’s Jon Greenberg. As I noted yesterday, even if the Cubs had opted out of the deal, that wasn’t necessarily the end of a Cubs/StubHub relationship – it could simply be the start of negotiations about fees, a price floor, etc.

A Cubs source tells Greenberg that the Cubs were surprised by yesterday’s announcement that they’d opted out of the deal. Apparently, the Cubs have been trying to delay this announcement for some time while they tried to figure out what the best secondary market approach would be for them (and/or, while they negotiated with StubHub, in which case, this announcement could be something of a negotiating tactic by StubHub).

Greenberg spoke to StubHub spokesperson Glenn Lehrman, who offered his side.

“From my understanding, they have officially opted out,” Lehrman told Greenberg. “This is a weird one. It wouldn’t surprise us if they ended up back in the deal. The Cubs were trying to delay making a decision. For our purposes, we’re considering them out. We have to communicate to our sellers what the story is. They have the option to opt back in. There’s no deadline.”

That could mean any number of things, but, because of the relationship with MLB at-large, of course StubHub isn’t going to exclude the Cubs if they wanted back into the deal (presumably on the same terms as the other teams). I have the feeling, though, that the Cubs are working out their own solution, or a particularized solution with StubHub.

For background purposes, it’s worth looking at the Yankees’ perspective on this issue, and digging into why they want out of the StubHub deal. From Bloomberg:

The trouble is that baseball teams have to worry about the feelings of season ticket holders. Paying $40 for a seat and then watching the one next to it sell for $2 can lead to some awkward questions when it comes time for buyers to renew. And according to ticket search engine SeatGeek, about two-thirds of Yankees tickets that sold on the secondary market last year went for below face value. “We believe there are serious issues with the StubHub relationship,” Randy Levine, Yankees team president, told the New York Post in June. “We are actively reviewing more fan-friendly alternatives for next year.” Translation: We want price floors.

That’s probably fairly similar to the Cubs’ concerns, together with the possibility that they will sell fewer face value tickets, because erstwhile buyers know they can just wait and buy tickets to weak match-ups on StubHub for dirt cheap.

The tricky part, as brought up in the Bloomberg piece, as well as the comments here yesterday, is that it’s very difficult to completely remove Cubs tickets from StubHub or other reseller markets online (Craigslist, for example). If Joe Cubs Fan has an $80 ticket to a game he can’t attend, he’s going to find a way to sell it. And Bill Cubs Fan isn’t going to pay more than he’s willing to pay for that tickets, regardless of the $80 face price. Restrictions, regulations, and relationships can be imposed in the reseller market, but, at bottom, it is a market. And market principles will play out – it is difficult to keep prices artificially inflated.

The Cubs are not fools, and they knows this. They have undoubtedly been studying this issue for months and months, and I doubt their plan is as simple – and faulty – as “we won’t work with StubHub anymore, we won’t accept their payments, and we’ll just somehow try to get tickets off of StubHub even though that might be impossible and all we will have accomplished is cutting ourselves out of the payment loop and made fewer people come to the games.” That, again, is why I suspect they’ve got a plan in the works.

Whatever manifestation it takes, I think you can probably expect, at a minimum, some kind of floor pricing scheme from any entity with which the Cubs have a formal relationship.

  • http://windycitysportswonk.blogspot.com/ Myles

    I hope this is true. I really, really hope this is true. If I can grab a ticket for 5 or 10 bucks on a day I have free, I’m definitely going to go (and spend money in the stadium on beer and a brat). If I have to pay 25 for that same ticket PLUS whatever fees the Cubs secondary market charges to see some bad baseball? I’m not going (and not spending that beer/brat money either).

    • http://windycitysportswonk.blogspot.com/ Myles

      Also, I don’t know if it’s a good thing or a bad thing that I always seem to be the first comment these days. I must need to get a life, huh.

      • Theocracy

        You’re totally right though. I live 3 miles from Wrigley and only went to games this year when I ended up being free and could buy on Stub Hub for cheap. Consider the ~4 beers each between my girlfriend and myself and the ~3 hotdogs. Those won’t happen if tickets have a face value floor.

  • Mike

    Stubhub is bad for baseball and all sports.

    • http://windycitysportswonk.blogspot.com/ Myles

      I don’t think that’s true. It’s a business that provides me a service (lower price tickets) and other people a service (selling tickets they don’t want to use). What’s so bad about that?

    • Internet Random

      Stubhub is bad for baseball and all sports.

      The designated-hitter rule is bad for baseball and all sports… and bad for America, civilization, and life as we know it.

  • Dustin S

    Price floor = me attending fewer games next year. I understand it from a business standpoint, but essentially significantly increasing prices after last season seems like odd timing. I’ll also be less inclined to buy direct too knowing I’ll have a lot more difficult time selling them if I need to.

  • Mike

    And according to ticket search engine SeatGeek, about two-thirds of Yankees tickets that sold on the secondary market last year went for below face value. “We believe there are serious issues with the StubHub relationship,” Randy Levine, Yankees team president, told the New York Post in June. “We are actively reviewing more fan-friendly alternatives for next year.”

    What a bunch of horse bleep nonsense. As Brett addresses above, the fact that season tickets are selling below face value on the secondary market has absolutely nothing to do with the secondary market intermediary.

  • Northside Matt

    The risk of continuing the current stubhub agreement is alienating STHs, the bread and butter of any organization’s ticket sales. As a STH, I would love to see price floors set. I’m realistic enough to know that the price floor isn’t going to be face value. I’m ok with that. It just sucks when my $28 or $37 bleacher ticket is on stubhub for $5.

    That being said, I understand the frustration of most non-STHs. Purchasing tickets for $5 helps justify going to see a mediocre baseball team. I generally use stubhub when I need tickets and I’ve already sold my season tickets for a particular game. Unfortunately, we can’t have it both ways. Most Cubs fans would love to see the team spend more money on payroll. The Cubs would generate more revenue with a resale model that includes price floors. It would also help drive ticket sales at the box office. I would like to think that the Rickettses, unlike TribCo, would spend this increased revenue on team payroll. ( No, I do not work for the Cubs.)

    Ultimately what Brett said is right – if Joe Cubs fan wants to sell his ticket for $5, he will find a way.

    • MichaelD

      I’m not sure I can understand the appeal of the price floor to season-ticket holders. Price floors help those who are able to sell their tickets at the inflated price but hurt those who cannot sell at that price, since quantity demanded falls. Given that the price floor will bring into play the Cubs’ reserve of tickets, I would think that not being able to sell would be a bigger problem.

      • Mike

        Correct. You cannot force a market to be something it is not. If you set price floors, season ticket holders will be able to sell less of their tickets.

  • WGNstatic

    Sure that Yankee season ticket holder may feel glum if the guy sitting next to him paid $2 for his ticket to a Yankees Royals game on a Thursday afternoon.. But… How does he feel two days later when the guy next to him paid $500 for a Friday night Yankees Red Sox game?

  • Hee Seop Chode

    Sounds to me like there’s a STH bubble if the open market isn’t supporting the face value of a ticket. By putting in a floor value (something not possible, but rather an inefficient neusance), MLB owners are attempting to have secondary market consumers supplement/subsidize STHs.

  • cRAaZYHORSE

    If your baseball teams tickets are selling on Stub for two dollars a seat Its the organization fault. I see no reason to regulate this market. People buy and sell tickets Anybody who sells tickets at two dollars is operating at a lost and The major league team already have been paid face value for those tickets.and should not complain.

  • Devin

    It will be interesting to see how this will all play out. Look at how many empty seats there were at Wrigley last year. I’m sure a fair number of the fans that were there into July, August, and September were there because of the far-bellow-face-value tickets. I’ve heard it suggested on the boards that the Cubs are probably doing this to help their season ticket holders and ticket brokers. Maybe creating a price floor will actually allow season ticket holders and brokers get a better price for their tickets, albeit still well below face value. I just wonder if this, plus another year of bad Cubs baseball is going to hurt attendance. Fewer butts in the seats, fewer concessions and souvenirs sold, less cash into the organization. I hope the Cubs have a really good plan laid out, because unlike the other Stubhub holdouts, we are no where ready to be a competitive.

    • cubfanincardinalland

      A 101 loss team drew 2.9 million fans, and you think that is a negative? By far the most loyal fan base in sports. Selling tickets will never be a problem for this franchise.

      • Devin

        Are you sure they “drew” that many? 2.9m in ticket sales maybe, but just looking at the stadium shows you how small attendance was. I agree they have one of the most loyal fan bases in sports, but people for the first time in quite a while were just not going to games.

  • 5412

    Hi,

    I don’t know any season ticket holders that have made a profit on their tickets over the last few years. In round numbers, I have lost around $1000 each year on the tickets I could not use.

    From the team perspective, they are competiting with season ticket holders when they do not sell out. Why should you buy a full price ticket at the box office when you can buy one for a discount at Stub Hub? The Yankee remark is BS, they don’t care if a fan finds out someone bought a cheaper tickets. Their real concern is the guy who bought the tickets on Stub Hub did not buy it from the Yankees.

    The solution to the problem is not to screw your season ticket holders, they are the most loyal of the loyal; but rather to put a great product on the field. In 2004 none of these problems existed and when the team starts winning they will go away.

    I just hope the team does not so some short term thinking and drive away a lot of their season ticket base who are already struggling to come up with money for the tickets.

    regards,
    5412

    • http://www.bleachernation.com Brett

      Pretty fair thoughts.

    • Northside Matt

      Idealistically, 5412 is right. Putting a better product on the field solves this problem. Unfortunately that’s not going to happen for another year or two.

      I am also losing about $1000/year on season tickets. The reduced bleacher ticket pricing helped a little last year. The problem is that reduced ticket pricing reduces the pricing on the secondary market.

      I understand the points that a pricing floor may not work. It’s definitely possible I may end up eating tickets because they demand at increased price levels isn’t there. But I am curious to see how it work – which fans would compromise and spend an extra $5-10/ticket on a game.

      My problem with stubhub is that they have eaten up the entire secondary market. I can list my tickets on craigslist for less than stubhub and have no takers. Fans would rather gamble on stubhub prices dropping or pay for the added security that stubhub brings. If a pricing floor is set on the main secondary market, would that open up ticket sales on other secondary markets(craigslist, ebay, Brett’s message board, etc…)?

  • Jason

    Between the Dempster/Marmol and now StubHub misinformations, I don’t believe a word of what the Cubs say/do until I see it with my own eyes.

  • Mike

    Setting a price floor is meaningless unless you sell out the park every day. You must have people competing for the tickets. And when your park is 20% empty like you-know-where late this season you have rely on opportunistic fans who decide that yes, 5 bucks a ticket does beat 50″ screen, multiple angles and replays, Len&Bob, and a 6-pack of beer, not swill, you picked for $8.

  • Ryan

    A few years back, Crane Kenney justified raising ticket prices despite a bad Cubs season by claiming that “all the season ticket holders are scalping their tickets for above face value.” Now that STHs have lost money in every year in the secondary market since that change because of higher ST prices and worse Cubs teams, they want to prevent STHs from getting back even a few bucks off the games they can’t attend? Even though they’ve already made their inflated “face value”? Supply and demand, except when it isn’t in your favor, huh Crane? This ownership continues to alienate it STHs and non-STHs with its focus on business over baseball. Build a winner and the money will come. Keep pinching every penny and I hope it come back to bite you in the High Plains bison dog. I dumped my overpriced and valueless tickets and I’m having a tough time hanging on to what fandom I have left. I thought that was impossible and used to laugh at fans that abandoned teams because of ownership, but I’m starting to see it.

  • jayrig5

    I’m sure Crane Kenney is taking time from squeezing next to players to watch movies on the couch in the clubhouse to get this deal done. The best and the brightest, for sure.

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