By Sally Fahey
Do sports ticket scalpers need a bailout?
Groups like the National Association of Ticket Brokers are floating the idea as a possible solution for the ticket resale business, hit hard by the coronavirus pandemic and the mass event cancellations it has caused. With sales virtually dead on resale sites like Stubhub and Gametime, brokers are being asked to refund customers for canceled events. Problem is, they can’t get their own money back on the tickets they bought directly from sports leagues and Ticketmaster.
That’s because teams and promoters are trying to reschedule games, postpone concerts and do everything they can to avoid paying back tens of millions of dollars worth of tickets. The reluctance to issue refunds is causing a liquidity crisis for brokers and resale sites like Stubhub, which has tightened payout rules and is trying to clawback millions already paid to brokers to help process refunds and exchanges.
Earlier this week Stubhub announced it was temporarily furloughing two-thirds of its employees — about 300 people — while sites like TicketNetwork have had to “enact adjustments and cost cutting measures” in response to the crisis.”I think some marketplaces are going to go under — it’s similar to what happened with the financial crash of 2008 without the prospect of a bailout,” says Barry Kahn, chief executive for ticketing and sales data firm Qcue.
Kahn says an ongoing liquidity crisis at Stubhub and other marketplaces may be compounded by how the National Basketball Association, the National Hockey League and others decide to treat their postponed seasons. “Once the first marketplace falls, it’s hard to imagine how brokers and the rest of the marketplaces don’t follow. This crisis is exposing real vulnerabilities in the entire industry.”
He added that Stubhub’s decision to cut their staff by two-thirds misses the larger existential risk the company faces. If fans en masse demand refunds from resale sites like Stubhub, including fees, Kahn says, “We could see an entire side of the business come crashing down in a way that the banks went down in 2008. The only difference is that the banks got a bail out, and [the ticket resale business] probably wont.”
Gary Adler isn’t so sure. As the executive director of the National Association of Ticket Brokers, he’s been floating a proposal for several ticketing companies to consider approaching Congress and the White House about being included in a bailout for the airlines and hotel industry.
“The number of canceled events due to COVID-19, including some of the biggest that exist, has made it extremely difficult for those in ticketing (and live events in general) to stay afloat,” he tells Billboard. “We would like to see ticketing and live events put in the same category as airlines, hotels and cruise lines when it comes to applying relief. Right now, the ticketing industry is essentially at a complete halt with no end in sight. Income for the people working in this sector and providing valuable services to consumers is essential and warranted.”