Economics 101: Bengals Secondary Ticket Market

Jake in the comments asks:

I have a question and this might sound stupid. If you buy a ticket from someone (its already been purchased from the bengals) and don't spend money at the game how does it help the management?

Actually it's a good question, not stupid at all.  It does help management and here's how.

Say that ticket holder you purchase the ticket from is a season ticket holder who purchased their ticket directly from the Bengals.  That person has to buy a full season ticket package each year at a pretty high cost or they will lose their COA.  If that person believes they can sell off the tickets for the games they can't go to (or make money selling them above face) then they are more likely to keep buying season tickets each year since they don't have to keep taking a loss on tickets they don't use (or even make money).

Same for a scalper.  Scalpers are more likely to buy tickets if they think they can sell them easily.  Anyone selling or buying tickets from anyone who is not the Bengals is dealing in what is called a secondary market.  The primary market  would of course be buying tickets directly from the Bengals.

Anyway, secondary markets reduce the risk that someone will take a total loss on an investment since they can resell to others in a secondary market.  In this way secondary markets can drive demand in the primary market.  It's not a direct transfer of money to the Bengals but it indirectly helps them in a very meaningful way by keeping demand for tickets high.  You just have to go beyond the first level of analysis. (Incidentally, for nerds or gambling addicts, here's a cool article that discusses a market for ticket options and futures - derivatives - on the secondary markets for tickets)

Anyway, don't help the secondary market, Jake, tempting as it may be.  Boycott.

Comments

[Randy]

Not to mention that when you go to a game, you will be buying beer, hot dogs or whatever.

That helps Mikey as well, doesn't it?

Randy

[Whodini]

Well yes Randy, but see Project Mayhem task #3.

[BMN]

Absolutely true. It's not hard to watch in any city with a struggling sports team.

I live in Atlanta and sports teams don't do very well there (the Falcons do the best and they had a half-empty building at the beginning of the year). When I went to playoff hockey and basketball games in Boston, you really didn't hear the scalpers. You saw them, but you had to go to them. They knew it was a seller's market and they weren't desperate to unload, even if it was an hour before the game.

In Atlanta, before a NHL game, I see a) less scalpers and b) they are usually a little less obscure because they're desperately calling attention to themselves so they can unload their tickets. I think b) is related to a) and a) reflects that there aren't a lot of tickets being sold. Scalpers aren't about to go into a losing proposition with tickets.

It's up to the football fans of Cincinnati-- if they sincerely want change-- to not just boycott buying directly from the Bengals, but to make buying Bengals' tickets a losing proposition. If it isn't, expect the misery to continue.

[colbert]

As a broke college aged kid, I've wondered the same. The only time I ever get to go to Bungals games is if I'm literally given a ticket for free. This past year, my ten-year-old cousin played in the flag football game at halftime of the Browns-Bengals(and scored a TD!). PBS game us free tickets. If all I'm doin is walkin in for a few hours to see my cousin win (and us lose), is that going against what WDR and myself stand for?

[Sleeping With Bieniemy]

colbert - obviously that situation is a little different since the ticket is being given away. so you going to that game isn't really a violation of the boycott (especially to see family play on the field).

but yeah, we'd still even encourage broke college aged kids to not seek out tickets at a discount anyway. once you're inside, it's tempting to buy food and drink too...