Wednesday, April 3, 2013
Final Four biggest-ever test of digital tickets
By Darren Rovell
As a contentious national battle rages on between ticket sellers and resellers over who owns the rights to a ticket, the digital ticket will get its biggest test this week at the Final Four in Atlanta.
That's because about 30,000 seats in the Georgia Dome, roughly 40 percent of the total inventory, will be digital tickets, often referred to in the business as paperless.
Many teams have adopted paperless ticketing as an option, including the Cleveland Cavaliers -- whose owner Dan Gilbert owns Flash Seats, the program that the NCAA is using. But never have so many seats been digital for a sporting event as large as this.
The idea, at least for the NCAA and other stakeholders who sell digital seats, is to control the flow of who sells what to whom by requiring anyone who resells and transfers that ticket to use a particular platform.
For the past couple of years, the NCAA used digital tickets only for the 2,800 student tickets it gave out (700 per team) to ensure that the seats given to students were assigned to a particular person. Once the students were given the tickets, they were non-transferable.
This year, the NCAA has drastically increased the population of digital tickets at the Final Four. The students are once again included in this group, but are now joined by anyone who won the tickets through the NCAA's lottery, as well as college coaches who are allowed to purchase tickets through the allotment given to them by the National Association of Basketball Coaches. NCAA officials, sponsors and PrimeSport, which is running the organization's hospitality program, have paper tickets.
The controversy over digital ticketing is over transferring and selling the seats. Organizations that use this type of ticketing say they do so to make sure that the people who are buying tickets are, for the most part, the people who are showing up. They also maintain that although they are selling the ticket, they are merely selling the license for the ticket and that they, not the seller, determine how the ticket can be sold. To bolster their case, they say it's also to cut down on fraud, even though other secondary ticketing sites guarantee that the tickets are real or offer an immediate replacement.
Fans who won tickets through the lottery can sell or transfer their seats to anyone, but must do so on the Flash Seats platform. In order to change ownership, the person they are giving the tickets to must log on to the website and enter their credit card number so that the ticket is identified with them. Upon entering the arena, the credit card is swiped and if it matches up, a paper receipt will be printed out.
A decade ago, college coaches could make a great business out of Final Four tickets. They'd buy two or four great seats, depending on seniority, with face values kept artificially low by the NCAA, and they could sell them for 10 times as much. Seats that cost $200 would go for $2,000. But that has gradually changed. First, the NCAA stated that any coaches who were caught scalping their tickets would lose the privilege for five years. A few years ago, that policy was revised and coaches could sell them as long as they sold them through the NCAA's partner website. This year, coaches can transfer tickets, but the NCAA could look into the names of the people to which the tickets were transferred.
One inside source says that the NCAA studied, over a three-year period, how tickets were distributed and who ultimately received them. Irregularities were discovered including blocks of tickets that wound up in the hands of brokers.
With digital tickets, the NCAA can price tickets in a way where those who have a rooting interest can get them at what is clearly a price below market value, but also make it more difficult for a person to capitalize on a resale.
Critics say that there's no debate that the fan owns the ticket and that a fan should have the right to sell it anywhere for any price. Groups like Fan Freedom, a lobbyist organization funded by secondary reselling site StubHub, maintain that a ticket can be a license and still be transferable at will, much like a copy of Microsoft Word. They claim that paperless is a marketing term that is meant to be deceptive because people think of an airline paperless ticket, which comes with the same benefits of one that is printed out.
Big money is being spent by both primary ticket sellers (like Ticketmaster and the teams) and resellers, (like StubHub and brokers) on either side of the paperless ticket debate. On Tuesday, in the Texas State Legislature, the two sides faced off in a hearing about the issue.