Press Box Article

 
 
Business gains traction in secondary market for PSLs

 

Don Muret

Sports Business Journal

 

March 24, 2008

 

Kyle Burks knew there had to be a better way to buy PSLs through the secondary market.

 

Two years ago Burks, a Houston accountant, wanted four Houston Texans seat licenses, which would give him the rights to buy season tickets at Reliant Stadium each year. “It was such a hard process,” Burks said. “I had to buy an ad in the paper, and after a couple weeks and some scary phone calls, I made a $20,000 transfer. I met the guy in a mall and gave him a cashier’s check.”Burks parlayed the trying experience into an full-time business called SeasonTicketRights.com catering to the secondary market for seat licenses. He has deals with three MLB and two NFL teams, with whom he shares the fees buyers and sellers pay when transferring PSLs.

 

“It’s similar to the StubHub model, where we deal directly with the buyer and the seller but the third party has to go to the team to verify the information,” Burks said.

The idea is paying off for Burks — he projects revenue this year will more than triple to $20 million — and for teams that were struggling with the issue of PSL resales.

 

“What he created was what we wanted to do, develop an in-house brokering process,” said Baker Koppelman, vice president of ticket sales and operations for the Baltimore Ravens. “It’s found money for us, and it’s a way for us to participate and not do any heavy lifting besides marketing the program on our site.

 

“It’s one of the best things we’ve done.”

 

The Ravens, Chicago Bears, St. Louis Cardinals, San Francisco Giants and San Diego Padres have deals with SeasonTicketRights.com. The teams’ sites link to a page on Burks’ Web site where the actual buying and selling take place. For all those teams but the Padres, the secondary market is the only way for buyers to acquire seat licenses.

 

The clubs and Burks share the 10 percent fees charged for each PSL transfer, but they would not disclose the exact splits. The minimum fee is $500. (Burks’ site also handles transfers involving the 12 other teams and three NASCAR tracks that he doesn’t have deals with, and on those deals he keeps all the fees.)

 

“It’s not a ton of money for us,” said Russ Stanley, the Giants’ managing vice president of ticket services. “The Giants won’t build an extra wing in my name, and it won’t buy a reliever.”

 

The baseball and football teams also share revenue with MLB and the NFL from their deals with Burks.

 

The Giants were Burks’ first client, signing up in December 2006 after the entrepreneur sent letters to 17 teams that use PSLs. Stanley was getting calls from some of the Giants’ 16,000 charter seat license holders wondering how to resell their licenses and, like the Ravens, tried unsuccessfully to develop a similar model for shepherding sales.

 

“I couldn’t get what we wanted … with all the paperwork involved, it’s not as simple as selling two tickets to a game,” Stanley said. “Then Kyle called out of the blue and it’s obvious he’s got it down right away. He’s a smart guy.”

 

Stanley estimates the seat-license marketplace site results in 300 to 400 charter seat licenses resold annually, half of which he said may not have been transferred if the Giants did not link to what fans perceive as a safe site for transactions.

 

The Bears launched Burks’ program in August, and in the last six months the team has seen $1,047,102 change hands from individuals reselling 132 licenses through the club’s PSL Marketplace. If the Bears collected 50 percent of the commission tacked on to the PSL sale price, the team has generated $52,355 in income since August.

 

“We are not to six figures yet, but we expect to get there by the end of the year,” said Adam Kellner, Bears director of stadium sales and services.

 

For the five teams partnering with Burks, each marketplace transaction is listed on an Excel spreadsheet on their Web sites, providing free and valuable information for PSL holders wondering how much their licenses are worth and what the market will bear, the clubs said.

 

Burks says his service also helps boost seat license values, another plus for clubs. In Chicago, his data shows the average price for 18 transfers has been $30,000 on the PSL Marketplace, as opposed to an average of $5,000 for 59 transactions completed on eBay before the Bears did their deal with Burks.

 

The same data shows the average PSL price per seat has grown from $2,200 to $11,000, a 400 percent increase. “The buyer feels so much safer [that] they are willing to pay more,” Burks said.

 

The NFL clubs support Burks’ program because it has eliminated complaints from fans falling prey to scams when buying and selling PSLs through classifieds on eBay, Craigslist and elsewhere.

 

“We originally encouraged people to go on the [Bears’] message boards, but they never turned into a safe and secure place to do business,” Kellner said. “There was no way to verify legitimate buyers and sellers.”

 

Burks’ site, unlike other secondary market sites, has greater control over transferring licenses because the buyer pays Burks and he holds the money in escrow until the team completes the transfer. SeasonTicketRights.com then pays the seller.

 

Because they are partners, the teams have no problem sharing season-ticket holder information when Burks calls them to verify data.

 

When Burks or other PSL sites are not partners with teams, the clubs are not always comfortable sharing private information about PSL transfers.

 

 

 “The great thing for teams is it’s huge for them to know what’s going on in the secondary market,” Burks said. “All this analysis on the spreadsheets informs them what the trends are.”