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Arizona State study: Ticket scalping might not be as bad as you think

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A recent Arizona State University case study found that you might be able to save money buying tickets from scalpers, but does that mean scalping isn't a bad thing?

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So a little over a week ago I was sitting in my apartment watching whatever Key & Peele re-run Comedy Central was airing when I got an email from Arizona State University. From time to time I’ll get emails from readers telling me things that I can improve on or things that I might have done well—more the former than the latter. However this one stuck out, and not just because it was from Arizona State. With a tagline like "Scalping may be beneficial to your wallet", I was interested in what it had to say.

When I think of ticket scalpers, I have a negative image of aggression and pushiness. While there are some ticket scalpers who look and fit that exact mold, I could not have been farther from the truth about the majority of them.

What the email offered was a hat-tip into a case study done by a team of researchers from Arizona State on the topic of ticket scalping (which you can read here). The study, which was headed by Dr. Barry Bozeman and senior research assistant Gabel Taggart, focused primarily on ticket scalpers and the habits they exhibited.

Now before we go any farther into this subject, I do need to mention something:

I am not saying that you should stop buying tickets directly from a Major League Baseball box office of your choice because scalpers will have the cheaper option. It is illegal in some states. I am not saying that scalpers are always the most reliable option. You will occasionally encounter a lone-wolf scalper who is looking to make a quick buck by selling counterfeit tickets—an act that helps further our negative view of people looking to re-sell tickets. Just like nearly everything in this world, there are people whose actions as an individual don’t reflect the overall group.

With that being said, the study's finding was interesting. In fact, what Bozeman et al. found was that scalpers outside of Arizona Diamondbacks’ games in Phoenix weren’t the type of people you might assume them to be:

"The research found that competing scalpers in Phoenix have developed working relationships that help them move product and assist the people buying tickets by providing a professional environment and prices that are in line with market standards.

(…)The practice is called co-opetition, and Bozeman, along with CORD senior research assistant Gabel Taggart, studied it outside Chase Field as competing scalpers would argue with each other one minute, then work together to get a customer the seat he or she wanted."

That means that ticket scalpers in Arizona are working together, but how are they able to do so? Well, as Bozeman outlined for me in a phone interview, it works like this. There are two types of scalpers: vendors and hawkers. In Arizona, if you are going to sell tickets on the public streets, you have to be a licensed vendor. Because of this, hawkers can buy tickets but must rely on vendors to sell tickets. Hawkers, like it might sound, were the people you would typically think to be ticket scalpers—younger, lower income, not well dressed, on bicycles, and lacking a license. They are the people who drum up business and clientele.

As for vendors, they are the people with licenses who actually sell the tickets and run the operation. Because they are licensed—which requires finger-printing, photographs, and a background check—vendors are less likely to be criminals. The interaction between these two groups also leads to a wider area of ticket scalping but a relatively small area where the actual transactions take place.

Most of the groups of ticket re-sellers have one or two vendors that authorize the actual sale of tickets, therefore informally creating an operation that might act more responsibly when re-selling tickets—discouraging the sale of counterfeit tickets.

It certainly wasn’t something these groups of scalpers set out to do, but it is as if they inadvertently created a socially responsible way of re-selling tickets in person. This is because, as Bozeman reasons, "You don’t want to give yourself as a scalper a bad rep. You don’t want people ripped off, you don’t want counterfeit tickets, and you don’t want to be selling way under the market."

But don’t assume that Major League Baseball will be cutting a deal anytime soon with an outside entity to sell their extra, unused tickets.

/Wait, they already have?

/That is basically StubHub’s business plan?

/Major League Baseball cut a deal with them?

/Oh.

Speaking of StubHub and the online secondary ticket buying market, scalpers are also doing another surprising thing. The online secondary ticket buying market, the very thing that was thought to rid the world of those wily ticket scalpers, is now something that ticket re-sellers are embracing and using to create their own markets. Often using the StubHub app, scalpers will gauge how much a ticket should cost by what it is currently going for online. This is revolutionizing the way scalpers sell because they now can offer an accurate price for tickets while still making money.

Not only are they able to gauge a fair price from StubHub, but they are also able to buy tickets to increase their supply from the online ticket seller. Like playing the stock market, ticket re-sellers are able to buy low and sell high from the fluctuating ticket prices StubHub offers each week. All this while still attempting to cost less than the same ticket might at a box office. The team of Arizona State researchers also used the StubHub phone app to find out if the ticket(s) they had just purchased were below or above market value.

The way the study worked was Bozeman and his team made the price they paid for a ticket—in this case 20 dollars—their independent variable, while allowing the ticket they received to be their dependent variable. "Sometimes we got tickets for 20 bucks," Bozeman described, "and sometimes we would get two tickets for 20 bucks—everything was in that range." But here’s the kicker: "Every time [they bought a ticket] the face value was more than $20." That means that every time this research team dealt with a scalper, they were actually able to save money.

It'll Cost Ya
Team Cost of an average ticket Cost of an average premium ticket
Boston Red Sox 52.34 180.37
New York Yankees 51.55 305.39
Chicago Cubs 44.81 113.48
Philadelphia Phillies 37.42 83.08
Washington Nationals 36.02 111.95
St. Louis Cardinals 34.20 83.55
San Francisco Giants 33.78 95.07
Minnesota Twins 32.59 74.18
Houston Astros 31.82 99.80
Seattle Mariners 31.00 206.00
Kansas City Royals 29.76 105.08
Detroit Tigers 29.01 73.72
Miami Marlins 28.96 167.14
Los Angeles Dodgers 28.61 222.13
Los Angeles Angels 27.54 76.74
Milwaukee Brewers 26.32 46.16
Chicago White Sox 26.05 88.15
New York Mets 25.30 83.78
Toronto Blue Jays 25.14 58.18
Baltimore Orioles 24.97 44.93
Oakland Athletics 24.00 52.00
Colorado Rockies 23.65 47.39
Texas Rangers 23.64 62.77
Cleveland Indians 22.38 59.50
Cincinnati Reds 22.03 66.43
Tampa Bay Rays 21.90 88.79
Pittsburgh Pirates 19.99 61.84
Atlanta Braves 19.14 51.33
Arizona Diamondbacks 17.98 52.14
San Diego Padres 16.37 41.18
MLB League Average 28.94 96.94

While tickets do cost a significant amount, teams typically make a decent hunk of change through purchases of food and drinks at hiked up prices within the stadium walls. It’s no surprise that fans are looking to find the cheapest option when buying tickets, which is the main reason why the secondary ticket buying market is thriving. Think of it this way - there has to be a reason that nearly every baseball park in America (and Canada) will have some form of ticket scalper outside its gates who offers real tickets at a lower price than the team does. It is a form of market correction, legal or illegal as it might be, which should be something of which teams are aware and working to fix.

Fine Dining on an Average Budget
Team Beer Soft Drink Hot Dog Parking Non-ticket cost
Boston Red Sox 7.75 5.00 5.25 35.00 53.00
New York Yankees 6.00 3.00 3.00 35.00 47.00
Chicago Cubs 7.75 4.50 5.75 25.00 43.00
Philadelphia Phillies 7.75 4.00 3.75 16.00 31.50
Washington Nationals 6.50 5.00 5.25 10.00 26.75
St. Louis Cardinals 5.00 5.25 4.25 20.00 34.50
San Francisco Giants 7.00 4.75 5.50 21.00 38.25
Minnesota Twins 7.50 5.00 4.50 6.00 23.00
Houston Astros 5.00 4.50 4.75 15.00 29.25
Seattle Mariners 6.00 4.50 4.50 20.00 35.00
Kansas City Royals 6.50 5.00 5.00 10.00 26.50
Detroit Tigers 5.00 4.25 4.50 20.00 33.75
Miami Marlins 6.00 4.50 6.00 15.00 31.50
Los Angeles Dodgers 6.25 6.00 5.50 10.00 27.75
Los Angeles Angels 4.50 2.75 4.50 10.00 21.75
Milwaukee Brewers 6.00 2.50 3.50 11.00 23.00
Chicago White Sox 6.50 4.75 4.00 20.00 35.25
New York Mets 5.75 5.00 6.25 22.00 39.00
Toronto Blue Jays 6.79 4.75 4.98 22.64 39.16
Baltimore Orioles 6.75 1.50 1.50 8.00 17.75
Oakland Athletics 5.00 4.50 5.25 20.00 34.75
Colorado Rockies 6.00 3.50 4.75 13.00 27.25
Texas Rangers 5.00 4.50 5.00 12.00 26.50
Cleveland Indians 4.00 3.00 3.00 12.00 22.00
Cincinnati Reds 5.25 1.00 1.00 20.00 27.25
Tampa Bay Rays 5.00 5.00 5.00 0.00 15.00
Pittsburgh Pirates 5.50 3.25 3.25 15.00 27.00
Atlanta Braves 7.25 4.75 4.75 15.00 31.75
Arizona Diamondbacks 4.00 1.50 2.75 10.00 18.25
San Diego Padres 5.00 4.00 4.00 8.00 21.00
MLB League Average 5.98 4.07 4.39 15.89 30.33

From the standpoint of responsibly re-selling tickets, Phoenix seems to have the right idea. However, Bozeman isn’t entirely positive that the same practice going on outside Chase Field translates from park to park.

"I don’t doubt," Bozeman explained, "there are local variations on scalping. But the basic idea of organizing in groups and cooperating and competing with other groups at the same time, I’ve seen that every place I’ve seen significant scalping activity—that’s just commonplace. It’s in their mutual self-interest that if they can’t strain together the right tickets to make sure that they don’t just let the customer walk. What they do is they have an agreement, kind of like a subcontractor, ‘you give me this ticket, you will get part of the money; and then next time you need a ticket, I will get part of the money."

It is a relationship that the scalpers have learned to use for the betterment of all. Bozeman expressed that the bountiful supply of unsold tickets the Diamondbacks typically have was a reason for scalpers to be generally more responsible and to break the normal negative view we have of them. "If you’ve got tickets with the [Chicago] Cubs or the [Boston] Red Sox," Bozeman reasoned, "where people just sell out routinely, I’ve got to believe the behaviors are very different." So if the demand for tickets is higher, it’s logical to think that the behavior of the ticket re-sellers might be much different. Also, to his surprise, Bozeman found that team performance did not play much of a factor into the demand for scalped tickets.

So is ticket scalping a good thing? "I’m agnostic about scalping," Bozeman discussed, "I think that the way things developed in Phoenix, with the Diamondbacks scalping at least, there is some unintended social benefit from scalping because of the social control from the scalping groups. I think it can be a good thing. I don’t believe that it is this sort of bad, awful, evil thing."

Bozeman, who even found a scalping group comprised solely of school teachers, saw inherently more value in the social change that has overtaken ticket scalpers. No longer are we able to look at them as these shady characters out to rip us off; instead (at least in Phoenix) they should be on the same level as a business entrepreneur looking to make money while giving the customer a fairly-priced ticket.

Again, I’m not saying that you should go to the All-Star game in Cincinnati, or any game for that matter, without a ticket and hope that you’ll find a scalper who will sell you one for cheap. I am saying that they are becoming more reliable options for consumers who might want to buy a ticket at the box office but also want a lower price. After all, consumers have the right to test out the ticket buying market, too.

--Thanks to Logan Clark for the hat-tip

--MLB averages taken from the Team Marketing Report

--Thanks to Dr. Bozeman for taking the time for a phone interview

. . .

Shawn Brody is a contributor for Beyond the Box Score as well as a sophomore pitcher at Howard Payne University majoring in Business Management. He has the current misfortune of being Red Sox fan. If you would like to get a hold of him, please feel free to email him at Shawnbrody9@gmail.com or follow him on Twitter @ShawnBrody.