As prices on the secondary market soar, two new companies are hoping to change the way you buy sports tickets. GameHedge is guaranteeing you a good game and ShooWin offers options to ensure the most loyal fans aren't priced out when it comes playoff time.
To understand the need for this, one must look at the current state of the ticket market. The secondary market, which is based on a model of supply and demand, has created a market where tickets to the most sought-after games are sometimes double and even more than triple than the face value of the ticket. According to Northcoast Research, the ticket resale market has grown to $7 billion to $8 billion industry.
Fans are shelling out hundreds, even thousands to see top games. For example, the average ticket on the secondary market to see the Golden State Warriors vs. Cleveland Cavs in the NBA Finals are averaging $862 to more than $1,100, according to secondary sites TiqIQ and StubHub.
"The secondary market is pretty dynamic," said John Healy, a senior analyst at Northcoast. "It creates a situation where a single person isn't going to go to a lot of games."
The good game guarantee
To solve that, GameHedge has created a ticket marketplace to give something back to the fans. Each ticket purchased on the site comes with a "Good Game Guarantee," a 50 percent refund if the home team loses by five runs or more in baseball. Fans simply log back into the GameHedge site and 50 percent is returned to their credit card.
If your team didn't perform the way you hoped, they will stand behind you.
"I went to a Mets game a couple of weeks ago, by the top of the third, the Mets were losing 9-1," said Warren Friss, founder of GameHedge. "I spent $400 on a game and everyone leaves with their head down. This just doesn't make sense."
GameHedge launched this week starting with Major League Baseball tickets. It plans to offer NFL tickets by August, and NBA and NHL tickets by September.
If you're curious, the Colorado Rockies have lost the most games by five or more runs (62 percent of their losses) and the Los Angeles Dodgers have lost only one game by more than five. On average, 1 in 8 MLB games on every given night ends with a team losing by five or more runs.
Friss likes those odds and sees opportunity.
How does the site make money? Friss said all GameHedge tickets are bought through a ticket exchange or third parties.
"Our markup is very consistent with what StubHub's markup is," Friss added.
Keeping tickets affordable in the postseason
ShooWin is making sure fans don't get priced out of seeing their favorite teams once playoff time comes. It's the brainchild of CEO Brisa Trinchero, a Tony Award winning producer and early investor in "Hamilton." Trinchero acquired IP from Forward Market Media and is using it to build a consumer brand.
As a Broadway producer, Trinchero saw firsthand how tickets prices soared, as fans shelled out hundreds of dollars to see Broadway's hottest show.
"Hamilton is one of the many events that real fans aren't able to go to," she said.
"You look at who is sitting in the seats and it's expense accounts and corporate clients. It's the same thing with the Super Bowl. When was the last time you saw a family at the Super Bowl?"
ShooWin hopes to change that and make it affordable for fans to see their favorite teams in person for their biggest games.
The model works by allowing fans to reserve playoff tickets in advance, by purchasing an option, or what they are calling a "reservation," for prices starting at $20.
If your team makes the playoffs or championship, congratulations. You are now going to the game at face value or a fraction of what tickets are on the secondary market.
No postseason? You are out the nominal reservation fee. This is where ShooWin makes money.
If something comes up and you can no longer attend the game, you have the option to sell your "reservation" on ShooWin's marketplace and supply and demand will dictate the price.
So far, ShooWin has signed on for a pilot program with post-season college football that's rolling out in beta Friday.
Its ticket inventory is supplied by the tournaments. Trinchero said additional leagues and even professional sports will be included when the site formally launches this fall.
Trinchero said sports teams and leagues are behind this new revenue stream because the ShooWin plan would bring real fans to their games and addresses fan backlash on how expensive tickets have become.
Will these work?
"It's definitely disruptive," said Dan Mannix, LeadDog Marketing Group CEO. The big question is whether GameHedge and ShooWin can scale their businesses and get access to enough tickets, he said.
Mannix also believes there are opportunities to do creative things with these companies when it comes to sponsorship and the fan experience.
"If there is value for the fan? It's an interesting value proposition," he said.