StubHub and Major League Baseball Fight the Free Market

Though most of Major League Baseball (MLB) will retain its relationship with online ticket site StubHub, the New York Yankees, the Chicago Cubs and the Los Angeles Angles of Anaheim are pursuing alternative platforms for fans to resell extra tickets. On the surface, the StubHub arrangement sounds like a great deal for all involved. After all, if everyone profits from the sale of a single ticket, what could be better than selling that same ticket a second time? Every time a ticketholder sells a ticket on StubHub, the company takes 23 percent of the transaction and gives MLB more than half of the windfall. That adds up to the tune of $60 million a year for MLB--and StubHub can promote its services on the hallowed real estate of MLB teams’ official websites. The arrangement appears bulletproof. Except for one thing: The fans, especially season ticket holders who are dedicated, passionate and loyal to their teams—both emotionally and financially. They’re getting screwed. On StubHub ticketholders can sell their tickets for whatever price they want, and this fact is messing not the finances of MLB, and disrupting a culture that divides people into different classes with more efficiency than the Titanic (and perhaps with the same results). You have to have disposable money in the bank to be a season ticketholder--and we're very happy for the people who do. However, thanks to StubHub those very ticketholders who spend so much (and who probably enjoy discussing sailboats or motorcycles between innings) might just find themselves sitting next to someone from a different town who supports the opposing team and hasn’t been on the water since he crashed his jet ski in his homemade swimming pool. That’s right, the same capitalism that many blame for stratifying Americans into disparate classes is actually bringing them together in stadiums. Weird, right? Welcome to the power of the $1 ticket on StubHub. In an ideal world, what other people do wouldn’t bother the public--but in reality it does. No one wants to play the fool, particularly when sitting next to a fool who paid 1/10th of the price for the same ticket. MLB, of course, wants to put a price floor on tickets as a guarantee of their value. The public wants to use unfettered capitalism to determine the actual value. StubHub is caught in the middle, and it’ll be interesting to see how this plays out. More interesting, in fact, than many of the games we pay to attend.

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StubHub and Major League Baseball Fight the Free Market

James F. Thompson

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James F. Thompson