As the Golden State Warriors prolong their season-long dominance into the NBA postseason, the battle between StubHub and Ticketmaster brews under the surface–one in which presents potential, drastic effects going forward in the sports ticket marketplace.
The reseller versus the original seller. The former company confines a scalper’s ability to drive up the retail prices of tickets. The latter company has been known to charge excess fees to ticket buyers without a clear reason as to why. While both parties share a fair amount of resentment from fans to varying degrees, it can be argued that fans would be better off if the resellers, indeed, come out on top.
In this lawsuit, StubHub claims that the Warriors have been coercing its season-ticket holders to only sell their tickets via Ticketmaster. Such action, in effect, corners the market for where fans can sell, find, and buy these tickets, particularly since Ticketmaster is the team’s preferred vendor for primary and secondary ticket purchases. The Warriors would “directly threatened” these fans by cancelling their season-tickets in the event that they do place their tickets to be sold at an external service.
The Warriors, however, have countered these allegations by issuing a statement that they wanted to ensure that tickets went to those whom, in fact, plan on using them and to prevent fans from buying counterfeit tickets. Ticketmaster added in their own statement that the suit is “baseless,” while drawing a line to not confirm or deny the alleged disapproval against fans’ season-ticket selling elsewhere.
With the NBA, on the league level, coming to terms with Ticketmaster back in 2012, they managed the primary and secondary ticket sales, which cut into StubHub’s business. The NBA and Warriors have been behooved to Ticketmaster because it grants rights holders the access to clean data about these sales as well as enabled to place price floors on the secondary market. Neither instance is currently feasible with StubHub–much less for rights holders to profiteer a cut from StubHub’s transactions.
However, there should be a clear distinction made in light of this ecosystem: season-ticket holders oftentimes resell some of their inventory in order to help finance the tickets that they elect to keep; fraud can be regulated in concert with all the parties involved.
The open market–everything being equal–provides more authenticity in the value of tickets for both sellers and buyers than a closed circuit run by the rights holders.
Amidst the looming ramifications of this lawsuit, though, lies a segment within the vast sports ticket marketplace that hasn’t been properly addressed: luxury suites.
Luxury suite sales can be said to have been marred by a surplus of middlemen exchanges, convoluted processes to complete a purchase, and non-overt accessibility to the public at large. A recent study conducted by Ohio University expounds on the scope of this sector, where bank companies and legal enterprises composed the top two industries owning sports suites, over $50 million represented the largest sales volume and asset size category, and average annual revenue from the Association of Luxury Suite Directors marked close to $10 million back in 2006. While some leagues now necessitate for some of this revenue to be shared, it’s a highly coveted space that warrants further exploration for untapped prospecting.
SuiteHop, a Denver-based startup, offers a streamlined platform–much in the same vein as OpenSponsorhip–that’s accessible and flexible to fans and businesses searching for luxury suites. As its own open marketplace for sellers and buyers, it makes available items that have exclusively been sold on a year or multi-year pacts. There’s a potential gold-mine to book full or single suites that would normally go half-used or not at all in some cases.
This startup derives from a pivot to expand further from a company called Sports Shares, a private club membership program with access to suites in Denver, Atlanta, and Dallas. But in its ten-plus years of existence, demand grew insofar as members wanting the same service in other cities. Todd Lindenbaum, Founder and Chief Executive Officer of SuiteHop, has developed personal relationships with various teams and suite owners over his 15 years in the business. Even though some of the suites have been originally contractually signed, that doesn’t deter the inventory to become listed on SuiteHop. Quite like StubHub, pricing and options function in real-time and the secondary market, itself, dictates the terms.
A first time user of SuiteHop would start their request by searching for the event they would like to attend. Upon choosing an event, they will be provided with the details about the location of their selection, catering (if provided), and a description of the suite’s amenities. After completing the request form, a member of SuiteHop’s team will follow-up to confirm their budget and finalize the transaction.
Events range from top sporting events spanning the NFL, NHL, and NBA games, to concerts of the most popular acts around. Users can expect to pay anywhere from $2,000 to north of $30,000 for a private suite, varying on the venue and event. For individual-based tickets, buying within a shared suite can go as little as $25 to $1,500. At the moment, they have 917 suites available on its medium.
During The Masters that just took place, for instance, SuiteHop accommodated fans with its service. They offered general passes for access to the course and practice rounds starting at $600, while tournament rounds went for $1,600. Hospitality passes were also available for an additional cost, which granted admittance to the luxury amenities of Club Magnolia, a private resort adjacent to Augusta National’s main entrance. Although The Masters included similar offerings, the structure of the suite experience was unique on its own right, given that stationary suites are not a part of the typical gold tournament.
Accordingly, the degree of customization is at a premium in order for SuiteHop to deliver optimally to this specific customer base, including Fortune 50 brands.
“Using luxury suites to entertain at sports, concerts, and special events is really the best way to host a group,” Lindenbaum tells SportTechie.
“The amenities available within suites varies widely from venue to venue, but with SuiteHop we can add a personal touch to any event with our host of services, like managing your invitations and RSVPs, coordinating delivery of tickets, and helping plan the perfect catering spread. We’ve even helped clients lineup former players to join them in their suite for games. We’ve planned thousands of events in suites, so we know how to make events as personalized as possible,” continued Lindenbaum.
Of course, access to luxury tickets is highly subjectable to availability, with prices set accordingly. For users that want to secure a suite for a certain event, the earlier the purchase is recommended, then the better opportunity to receive the best pricing.
Over the past 25 years, through, a lot of the new sporting venues have been financed with long-term suite contracts in mind, making it possible for SuiteHop to scale going forward. Lindenbaum asserts that renewal rates of luxury suites have not been sufficed the inventory. Teams are now selling suites to ticket brokers because it’s an asset that should command its own market, needing extra help along the way for them to be sold.
Upwards of 500 suites transactions have transpired on SuiteHop since its inception in July of last year. They have privately raised $1 million, while being profitable throughout this time and taking a ten to 25 percent fee from all purchases to date.
SuiteHop has positioned itself to be the preferred vendor of luxury suites across the sports industry for a lot of teams and properties. They don’t necessarily have to be the exclusive partner of the rights holders for the business to be viable. The relationships and experience earned through the years should navigate these channels appropriately to gain traction.
Sports ticketing entities await for the ripple effects from StubHub’s legal action against Ticketmaster to take form. SuiteHop, for its part, is penetrating a strong, overlooked segment in the space that the secondary–or even the primary, for that matter–market competitors haven’t yielded a defined, efficient experience for sellers and buyers of luxury suites.