For some Denver Broncos and Seattle Seahawks fans, the clock started ticking as time expired in the NFL conference championship games last weekend. Finding Super Bowl tickets on short notice is stressful, expensive work.
But instead of scrambling, Forward Market Media chairman Rick Harmon would rather see fans savor the run-up to the big game.
“The fact of the matter is that we and all the rest of the people on the this good Earth of ours spend hugely greater amounts of time anticipating things than actually doing things,” Harmon said.Optimism For Options
Forward Market Media was in development for several years before it made its debut in 2010. The business boils down to this: from the preseason until a team is eliminated from the playoffs, fans can pay ticket reservation fees – also called TeamTix – that are tied to a team’s success. If your team falls short of the Super Bowl, you’re out the original fee.
“If their team does make it then they’re acquiring that ticket at face value, not the secondary market, scalp value,” Harmon said. “So, it’s an economic driver for the individual fan, but there’s also a pretty big emotional component to eliminate the uncertainty well in advance of a big game and a bit of bragging rights, if you will, kind of getting out in front of the pack.”
Fans don’t deal directly with Forward Market Media. The company licenses its platform to events like the Orange and Rose bowls. For Super Bowl XLVIII, they partnered with Ludus Tours, a travel company holding hundreds of tickets. For a round number, let’s say Ludus has 200 tickets. Before the season, they set aside 100 for the AFC champions and 100 for the NFC. In the best-case scenario for the company, they can sell 3200 options, collecting fees from up to 100 fans of each of the NFL’s 32 teams. Of course, that’s assuming there are 100 fans in Cleveland and Jacksonville who believe in miracles.
A Rooting Interest
In 2012, Buffalo, N.Y. resident Mark Mahoney bought an option that guaranteed him a ticket to college football’s national championship game if Notre Dame got in, which they did. Mahoney says having a ticket on the line made rooting for the Fighting Irish especially exciting.
“I thought, ‘Well gee, Notre Dame’s going to lose one of these games, and I’m not going to be going to the [title] game. And as they kicked a last-minute field goal or got a turnover toward the end of the game, everything just seemed to fall in the right place,” Mahoney said. “It’s fun watching it and talking about it and thinking that your chances are good [or] bad because they change game to game.”
So last fall, Mahoney tried for Super Bowl tickets. Opening prices for options were $20 to $50 per team. During the season, fans can sell options, so prices rise and fall when teams get hot or go cold. When Mahoney bought four Broncos options in mid-September, they were already up to $200 apiece. When Denver advanced to the Super Bowl, he landed tickets with a face value of $800 each. Final price per ticket: $1000. On Wednesday, the secondary market website StubHub reported sales ranging from just under $1900 to over $10,000.
Mahoney says securing the ducats is great, but he also lost $800 on 49ers options when Seattle beat San Francisco.
“I think the downside is obviously if your team loses and [you’re] not able to purchase the ticket. But as long as you understand how it works, you know that going in,” he said.
Matt Marolda is the founder of StratBridge, a company that analyzes data to help pro sports franchises adjust ticket prices on a game-by-game basis. He says the options model is great for a single-date, fixed-location game, but is less appealing for a game in a best-of-seven, home-and-away series.
The downside is … if your team loses and [you’re] not able to purchase the ticket. But as long as you understand how it works, you know that going in.
Marolda says Forward Market Media isn’t the first to use a hedge system for ticket reservations, and the company needs to avoid mistakes the others made.
“The biggest stumble I remember seeing was one where the [ticket] inventory wasn’t secured prior to the event. And it wasn’t balanced across teams, which is to say, ‘Anyone can make any bid on anything. And then we’ll go figure out about how to get the tickets later.’ And that just blew up,” Marolda said. “So, [Forward Market] seem to have come at it from a different angle, which is, ‘OK, we’ve now got this inventory. How do we maximize the value that we get for that inventory?’”
And that’s why Forward Market Media offered companion options: Want to be sure you have a hotel room in New York for the Super Bowl? Buy an option. Want to see a hot Broadway show the night before the game? Buy an option. All of the choices were tied to your team’s success.
As for the option guaranteeing good weather in February in New Jersey … you’ll just have to risk it.