Sports Ticket Brokers To Feel "Heat" Of Investment Bank Crisis?
Last week, I asked if Wall Street's decline would force the New York teams moving into new stadiums to lower their ticket prices.
More than half of the nearly 500 voters in article’s poll said that the situation with the market would keep the New York Jets from getting their target of $25,000 for each of the 2,000 premium PSL’s the team is auctioning off on StubHub next month.
Something I didn’t mention was the hit that high-end ticket brokers could take since they received big business from investment bankers who bought last-minute seats at big prices.
Obviously Bear Stearns and Lehman don’t exist anymore and Merrill Lynch has been folded into Bank of America. Now Goldman Sachs and Morgan Stanleyare abandoning their investment bank status for the safety of being regulated by the Federal Reserve.
It’s information that’s hard to confirm, but one ticket broker with knowledge of spending by investment banks on sports tickets told me that Lehman Brothers most likely purchased the most seats to games out of all the investment banks. One of the reasons for this, the broker said, is because Lehman didn't have the sports sponsorships that some of the other firms had, so they often had to buy tickets on an ala carte basis. A broker known to fill much of Lehman's business did not immediately return a call seeking comment.
Leor Zahavi, founder and CEO of Admit One, a New York-based buyer and seller of tickets, said he's sold tickets to all the banks.
"We didn't notice more business coming in from Lehman than any of the others," Zahavi said. "We have noticed though that, over the last few years, Wall Street has not spent as much as they used to likely because of more internal monitoring of their spending.
Zahavi says he doesn't know what will happen, but he's assuming that the banks will pull back even more given the current market environment.
Complicating matters for the ticket brokers is not only the fact that banks will likely tighten their purse strings, but that it’s believed that the companies that still do exist will encourage their employees entertaining clients at sporting events to use the house seats more than ever before.
For example, Citigroup’snaming rights deal with the New York Mets obviously includes ticket perks as does Barclaysnaming rights deal with the New Jersey Nets (though it’s not clear when the Nets will ever get to Brooklyn). And Bank of America is reportedly on the cusp of signing a sponsorship deal with the New York Yankees that will include hospitality.
Questions? Comments? SportsBiz@cnbc.com