Cubs on Opting Out of StubHub Deal: Um, No We Didn’t

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.