Editor's Note: This journal entry is from guest contributor Troy Kirby, the creator of The Tao of Sports. It also appears in the 2016 summer issue of SEAT Magazine.
Every July, Las Vegas hosts two different ticket broker conventions at separate hotels at the same time, which tells you everything you need to know about ticket brokers.
Brokers are the most individualistic people that you will ever meet. At their conventions, you’ll notice that there is a buffet with every type of food option sitting side-by-side, meaning spaghetti and meatballs, next to salmon, next to sliders, next to sushi, next to wraps, next to a selection of kosher meals.
Because no broker has ever settled on just one thing, even when it comes to lunch or dinner.
Both conventions this year held record attendance numbers, and for good reason. The secondary market is changing drastically, and in not-so-favorable ways for some of the long-time brokers attending.
A Tale of Two Conferences
Kicking off the week was Ticket Summit at the Venetian, which boasted almost 1,000 attendees thanks to DTI Management’s consolidated shareholders joining TicketNetwork’s group for the occasion.
The more traditional, older group, the National Association of Ticket Brokers (NATB), ended the week with its own conference at Bally’s Las Vegas. The attendee roster was about half the size of Ticket Summit’s, but it is still growing. NATB is the legacy conference of the group, before TicketNetwork broke away to start Ticket Summit over a decade ago.
Ticket Summit has the glitz of mega keynote speakers like Marcus Lemonis, high-end stages, and wild after-hours parties in exclusive nightclubs. NATB focuses on membership loyalty oaths, speeches from its mentoring board on ethics, and an end-of-show poolside party at Paris Las Vegas.
These groups have a myriad of the same issues line up continually, yet because of old wounds and fear of negative interests, their conferences cannot be the same conference at the same hotel, despite some of the members buying into both shows throughout the week.
Industry Changes Ahead
But consolidation may force the hands of both sides. The older brokers, who have had their businesses for decades, are feeling forced out by the specter of what is to come. Part of it comes down to a broker bubble that existed during the 2000s, when brokers achieved 35-percent to 50-percent margins on ticket inventory posted through Google’s SEO.
That bubble started to crater as online buyers became more savvy, and reselling exchanges, such as StubHub, Vivid Seats, and TicketNetwork, now find themselves competing against listing search engines, such as SeatGeek. This competition has created a race-to-the-bottom scenario in terms of marketing for the discount buyer, thinning out margins overall, as pricing intelligence has allowed professional teams and promoted acts to see exactly what a resold ticket has been worth over the last few years.
SeatGeek’s announcement in July that the search engine would be selling league-wide primary tickets for Major League Soccer was mulled about two weeks prior during the Ticket Summit and NATB conferences, as was the recent StubHub deal with the Philadelphia 76ers. Brokers were unsure whether Ticketmaster was still the enemy anymore, despite being a constant target of how the company dealt with brokers. Perhaps StubHub and SeatGeek were now getting their turns at the table.
Is Broker Consolidation Already Here?
Consolidation in terms of ticket brokers means that a team only contracts out with one company to resell its tickets, rather than with multiple entities. Within that scenario, there are various factors and models, including the DTI Management model which makes subsidiary brokers fit in as shareholders under a consolidated deal. The fear brokers hold is a lack of autonomy. But what they don’t want is being left out in the cold entirely.
What DTI Management offers are some of the very things that many brokers across both conferences refuse to do for themselves. DTI Management creates consistency, as well as standards and practices, with the professional team or organization that the resellers are dealing with. Loyalty and consistency go both ways, and unfortunately, teams haven’t been the best friends to brokers in high times, as much as they have been in low times.
It takes only a survey of the attendee roster to see which teams are attending Ticket Summit or NATB, loudly proclaiming that they are “broker friendly.” Those teams and organizations are consistently at the bottom of their standings in league performance, thus requiring the financial aid from brokers to offload seats in order to create enough demand to not look entirely empty for the upcoming year.
When any of these “broker friendly” teams cause a surprise or shock in the standings, suddenly the brokers get booted, decried in the media, which is why there has been a consolidation discussion taking place over the last few years with brokers. Would a uniform team deal actually prevent brokers with a vested interest from turning on each other inside that deal?
Over 1,000 brokers filled the hall during the 2016 Ticket Summit consolidation session, listening to four consolidators of varying degrees (Patrick Ryan, Eventellect; Curtis Cheng, DTI Management; Scot Tobias, Worldwide Tickets; Barry Rudin, Barry’s Tickets) offer up their thoughts on the matter. The trouble was that if a dollar had been thrown up for grabs to the audience, half of the members should harm the other half. Not to gain the dollar for themselves, but to prevent those within their own membership from obtaining it.
These were all local farmers being told by the larger farming corporation heads that they would likely be out of business in a couple of years and need to join the conglomerate to survive. The idea of “getting along” is not a new issue, especially since Ticket Summit was formed a decade ago as an alternative broker conference. Professional teams, arenas, and promoted acts exploit this truth to their advantage because everybody knows if you burn one broker by pulling their seats when you get good, two more brokers are willing to buy those same seats when you stink in the standings.
It is the difficulty of dealing with rebels who are all so independent minded. Will they be friends in one arena, and enemies in the next? This lack of trust has caused each group to wonder if unification could ever happen.
Is It Too Late for Unification?
But unification may be too late to save either conference. More than a few brokers have quietly suggested that a conference of 1,000 brokers might be cut down to 100 in less than five years. There is a high likelihood of the secondary market gobbling up brokers, as well as young professionals entering the sports field, making inside sales calls for franchises. Because the margins are so thin, neither component of the industry will be viable.
All of this comes back to the brokers themselves, who seem to be unable or unwilling to work together. It is a common trait of their rabid individualism that they will not join forces, even when their economic interests align.
How will broker consolidation change your organization?
Write to Troy at email@example.com.
- Broker Consolidation
- National Association of Ticket Brokers
- Major League Soccer