• Colleges Jump On Secondary Bandwagon

Oct
24

By Michael Smith, Staff Writer
Published October 24, 2011, Page 23 in Sports Business Journal

Last season, StubHub processed more than 3,500 transactions for tickets to home football games at Clemson University. For the most part, the school had no idea where those tickets were going.

Since then, the Tigers have made StubHub their official fan-to-fan marketplace, and while it’s still hard to distinguish whether they are ticket-selling partners or competitors, Clemson officials are confident they are better off embracing the secondary ticket giant.

Every time a Clemson ticket moves on StubHub, the school collects data about the buyer and a transaction fee from StubHub, which also pays an annual sponsorship fee. Sponsorships range from $75,000 at smaller schools to the $300,000 to $400,000 range at larger schools.

“Sure, there are some concerns, but we think it’s doing the job of putting people in the seats,” said Travis Furbee, Clemson’s assistant athletic director and manager of IPTAY, the school’s booster group. “Before, those tickets might have been sitting in a desk drawer, going unused.”

Clemson is one of a growing number of schools that have signed partnerships with StubHub. North Carolina, Florida State, Purdue, Tennessee, Texas, Stanford, Texas Tech and Michigan are among the others.

Other schools, such as Oklahoma, have created their own ticket exchange on their official websites and, for now, are resisting StubHub.

“We’ve looked at it and we’ve decided not to do it,” said Joe Castiglione, Oklahoma’s athletic director. “We’re constantly trying to measure our own effectiveness versus other secondary businesses, and this is what we’re sticking with. But we have to be always mindful of how the market is changing.”

StubHub had a handful of deals with universities before, but its presence within the college space has grown significantly in the last year thanks to a partnership with Paciolan, a ticketing software company that already had a 30-year foothold with hundreds of college relationships.

The deal between StubHub and Paciolan allows ticket holders to resell their tickets by logging in to StubHub’s online site and entering a bar code number, which StubHub verifies as a legitimate ticket. The ticket is then resold, a new bar code is issued for the ticket, and it’s digitally delivered to the buyer, making a Friday night or Saturday morning transaction conceivable.

That buyer’s contact information is then shared with the school’s athletic department, which typically adds the buyer to mailing lists for its booster club marketing.

“I tell presidents and ADs all the time that the secondary market is going to happen with you or without you,” said Paciolan CEO Dave Butler. “The universities that are participating are getting revenue from sponsorships and fees, and the season-ticket holders like it. They’re also growing a database of buyers that could bring in new donations in the future. Some schools with a more limited demand don’t view this as such a big issue. We let the schools make the choice.”

The relationship between Paciolan and StubHub, which created a safer, more seamless method of transferring tickets, has hastened StubHub’s ability to find new college deals.

“It’s not about revenue,” said Clint Gwaltney, North Carolina’s associate athletic director for ticketing. “It’s about customer service. We knew tickets were already going to StubHub and now we can track it. It prevents a lot of issues on game day.”

What this will do to the ticket market in the next five to 10 years remains to be seen. Donations to athletic departments are typically attached to season-ticket purchases. The higher the donation, the better the location of the ticket.

Clemson’s season-ticket holders on the 40-yard line are required to make a $700 donation to have access to those tickets, and many contribute more, Furbee said.

But if a season-ticket holder instead can go to StubHub and buy a similar ticket without having to make the donation to the athletic department, that could threaten a school’s ability to raise funds.

School administrators say the strong affinity between college fans and their team has prevented defections from the base of booster club members.

“Does it chip away at annual fundraising?” Clemson’s Furbee said. “That’s something that’s in the back of your mind, it’s something you need to be cognizant of.”

But Gwaltney also knows of cases where season-ticket holders use the secondary market to resell tickets at a higher price than face value. Do that enough times and those fans cover the cost of their donation.

Often, fans follow a pattern of behavior that they’ve developed over years.

“When we have inventory and the secondary market is flooded with tickets under face value, some people will go to StubHub and get them, but we still have a group buy them for face value from our office,” Gwaltney said. “We’ve also seen people go to StubHub and buy tickets for twice the face value when he could have bought through us for face value.”

While schools might continue to wonder if they’re letting the fox into the henhouse by driving business to StubHub, many come back to the same conclusion.

“StubHub is not going away,” Gwaltney said.

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