A soft secondary ticketing market indicates that struggles may lie ahead for the NBA. Season ticket holders across the league count on selling seats to the most desired games (see: LeBron, Warriors) at a profit, to offset their costs for the remainder of the season. If fans don’t believe they’ll be able to recoup that investment, they won’t buy/renew season tickets. Secondary market sales have started to trend in the right direction over the last few weeks, but as of January 1st more than 20 NBA teams had experienced YoY resale profit declines of at least -50%.
Howie Long-Short: Warriors “fatigue” looks to be the primary cause of the league’s secondary ticketing market decline over the season’s first 2.5 months. Lower level tickets that would command $200+ last season, could be had for $100+ in many cities this year. On a single ticket (or single game) basis, $100 might not sound like a lot, but follow this math.
Fan Marino spends $8,000 on 4 lower level season tickets. Fan’s favorite team plays in the Western Conference and Fan opts to sell all 4 of his seats, all 4x the Warriors and Lakers visit (2x/each). Those 16 tickets sold for $3,200 ($200/seat) last season, accounting for 40% of his costs, but a soft secondary market means those seats are only returning $1,600 to Fan this season. The net cost of Fan’s season tickets just rose +33% (from $4,800 to $6,400), which explains his tempered enthusiasm to renew/upgrade/buy more seats for next year.
The value of Lakers tickets has declined by more than -50% since LeBron went down with an injury. I checked in with Patrick Ryan, the co-founder of Eventellect (has multi-year contracts for ticket inventory management solutions with 12+ NBA teams), to find out if James is the single biggest secondary ticketing “market mover” (athlete, not team) in sports?
Patrick: Yes, and it is not close. LeBron is so relevant to the NBA that we’ve loosely explored insurance options that would protect our book of business if he were to be injured for an extended period.
If the secondary market is so heavily dependent on a single star or team, then what can NBA teams do to ensure fans continue to buy season tickets post-LeBron/Warriors?
Patrick: Sophisticated teams will leverage experiential assets and perks to keep season ticket holders engaged. The Orlando Magic have instituted an interesting program that enables fans to trade in tickets for a general credit (think: in arena purchases, not just tickets), rather than having to resell them. Getting your core fan less focused on resale is an important aspect of stabilizing the season ticket holder base and the Magic are making great progress; other teams will take notice.
Fan Marino: The NBA’s best hopes for a secondary market correction (save LeBron’s return) is for Giannis Antetokounmpo and Luka Doncic to continue to pick up mainstream attention and for the 76ers to continue winning (7-3 in last 10). Patrick added “Dwayne Wade’s retirement tour is (also) beginning to gain some steam on the road and the Mavs road market could become interesting if/when Dirk were to make an announcement.”
Interested in Sports Business? Sign-up for our free daily email newsletter list, here!
