Earlier this week, we looked at the debacle around Super Bowl tickets, in which thousands of tickets sold by brokers went undelivered to a crying mass of heartbroken fans.
In that article, we examined how the sky-rocketing demand and overeager ticket speculation pushed the price per ticket to $8,000-$10,000 or higher. But was it simply high demand that drove tickets through the roof? Or were there forces at play controlling how much supply was available on the market?
“A consolidation of supply this year has led to a handful of sellers being able to manipulate the market and make it nearly impossible for last-minute fans to go to the game,” StubHub spokesman Glenn Lehrman said to ESPN just days before the big game.
Which sellers were in a position to consolidate supply? One company that’s drawn some scrutiny in recent days has been PrimeSport, based in Atlanta. PrimeSport was co-founded by RazorGator CEO Doug Knittle as the premiere hospitality wing of the online marketplace, before it was sold to private equity firm Clearlake Capital in January 2014.
PrimeSport is the official hospitality partner of many teams in the NFL, including the Seattle Seahawks. As the team’s official travel partner, PrimeSport buys Super Bowl tickets directly from the Seahawks’ allotment (which totals about 12,600 tickets) and packages those tickets with travel, multi-night hotel stays and game day party packages.
PrimeSport also maintains an online ticket marketplace (similar to StubHub) — it’s not seen to be in competition with the NFL’s official secondary ticket partner, Ticketmaster’s TicketExchange, because PrimeSport combines tickets with travel packages (and pays the NFL lots of money for the right to do so).
On Wednesday before the Super Bowl, PrimeSport had hundreds of tickets listed on its website. By Thursday, it was only listing 150 tickets, and before long, it completely stopped showing inventory with a message telling users, “We are no longer selling Super Bowl tickets online.”
It wasn’t long before brokers noticed the supply of Super Bowl tickets had quickly diminished, with the price of a ticket spiking from $2,000 to $10,000, leaving many brokers to fill orders at big losses or simply walk away from their orders altogether.
So why did PrimeSport, which has a direct link to not only the Seattle Seahawks, but 18 other NFL teams with their own ticket allotments, suddenly pull back its inventory?
We tried to ask PrimeSport President John Walker, but 30 minutes before our scheduled interview this morning, he sent Amplify an email that said, “I’ve been advised by my lawyer not to talk to anyone in the media at this time given the sensitivity of things.”
With that door closed, we turned to StubHub, who was hit hard by the shortage and lost millions of dollars fulfilling ticket orders that had been placed the week before. “How did you acquire all those tickets at the last minute?” I asked one person at StubHub who was directly involved with filling some of the ticket orders.
“No interest in discussing this any further,” was the short response I received.
So what do we know? Well, we know that the NFL delayed the distribution of tickets to its own players, coaches, team execs and sponsors until a day or two before the game. In the past, they had released the tickets as early as Tuesday before the Sunday game. Those tickets were often sold to scalpers and used to fulfill orders that had already been promised. Not this time. By the time many players and fans received their tickets, there was little or no time to flip them to a scalper.
We also know that PrimeSport, which has a direct channel to tickets through its partnership with the Seattle Seahawks (unlike StubHub), suddenly yanked tickets off its own marketplace, causing the price of tickets to skyrocket.
And finally, we have the possibly unrelated news that PrimeSport was sold by owner Clearlake Capital in December to the Carlyle Group, a private equity firm based in DC (according to a Dec. 23 term sheet published in Forbes). What that means for PrimeSport President John Walker (who previously served as CEO of Major League Baseball’s Tickets.com) is unclear.
All we can really do at this point is ask questions. Like, is the NFL using the supply of Super Bowl tickets to hurt small brokers and damage institutional competitors of its TM-backed TicketExchange? Did the league benefit from sky-high ticket prices? And will brokers be more cautious next year during Super Bowl 50 in the Bay Area?
“Next year, you won’t see ticket prices so low in the days immediately following the conference championship,” said one high-level ticket broker. “What you’ll see is tickets priced very high up front and then slowly lowered as we get closer to the game.”