The New York Yankees have signed a historic deal with StubHub, selecting the reseller to be the “official fan-to-fan ticket resale marketplace” of the team. The deal was a stunning reversal for the Yankees, who had been battling StubHub for years and recently created its own gated ticket exchange, even banning print-at-home tickets as a way to keep tickets off of StubHub.
The deal comes just months after Yankees COO Lon Trost caused a mini-PR crisis after he criticized StubHub for allowing fans to buy premium tickets at cheap prices, forcing wealthy fans who paid full price to mingle with “someone who has never sat in a premium location.” The comments were immediately condemned by the press and lampooned by comedian John Oliver, forcing Trost to walk back his words and later agreeing to sit down with StubHub for talks about improving their relationship.
Those talks led to a $100-million, six-year deal with StubHub to integrate its technology with the Yankees and make tickets available for resale in time for the team’s July 15 game against their longtime rivals, the Boston Red Sox. The deal will replace the Ticketmaster team exchange created for the company, which it rolled out earlier this year as part of a comprehensive plan to take control over the resale market. That plan called for the elimination of paper tickets, replacing them with mobile digital tickets that were difficult to transfer or sell on StubHub. The new deal means that StubHub will now be able to sell the digital tickets on its platform and verify each ticket’s barcode to protect against fraud.
Ticketmaster will continue to provide primary ticketing sales for the Yankees, although the company will have to integrate some of its technology with its long-time rival to make the integration work. While the deal with StubHub is a small hit for Ticketmaster, a source close to the team told Amplify that StubHub was offering so much money to the team that it didn’t make sense for TM to try to match the offer. StubHub, after all, can use the deal with the Yankees to drive other traffic to its site in North America’s largest entertainment market. It also makes StubHub more attractive if eBay does decide to spin off the resaler, showing that the company is still poised for growth in a mostly mature industry. Ticketmaster was only making about $250,000 a year running the team’s exchange, so there was very little incentive for TM to pay big bucks to keep the secondary account when they already had a deal for the primary.
A source close to StubHub said that the secondary site does a much higher volume of transactions than the Ticketmaster Exchange because the company is a more recognized brand used my many more ticket brokers, arguing that it’s likely that StubHub would be able to pay the Yankees $100 million over the term of the deal if they paid the team 50-75% of the transactions fees it generated from selling tickets.
“New York is a huge market for StubHub and the Yankees are a good business for StubHub because the team has badly mispriced their tickets, creating plenty of transactional opportunities,” our source said. “Not only does StubHub have the volume, but it also is pretty good about hitting the right price.”
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