First Version: Jun 2014

Updated: Oct 2018

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Season Ticket Buyer Behavior and Secondary Market Options

Abstract

Sports franchises derive significant portions of their revenues from season ticket holders who pre-purchase tickets with large price discounts but significant uncertainty of game quality. A recent trend that may have meaningful consequences for season ticket management is the development of legitimate secondary markets. This research investigates the value of secondary markets to season ticket holders. We find that, on one hand, secondary markets provide an option value to list tickets to resell in addition to attendance and forgoing. On the other hand, the secondary markets may attract listing, push down resale prices, and make the resale option unattractive. We assemble a unique panel data that combines season and single ticket purchase records with ticket usage records on attend, forgo, list, and resale. We build a structural model of ticket purchase and usage. Our policy experiments suggest that overall secondary markets increase season ticket purchase rates by 5.97%, equivalent to $2,633,394 revenue increase over 6 years. The impacts of secondary markets are most pronounced for lower quality seat tickets.

Keywords: Sports Marketing, Season Ticket Holders, Ticket Resale, CRM