Are the Red Sox unhappy with the role of MLB Advanced Media (MLBAM)? Have they come to regard BAM as a competitor and not a partner? Recent actions and words indicate that the two have fundamental disagreements on the matters of secondary ticketing and media rights. Are these differences about who is best positioned to maximize on these revenues or how these revenues should be divided?
Earlier this month the Red Sox announced that Boston-based Ace Ticket is their “authorized hub for fans to resell tickets.” The Red Sox will be the sole MLB club not partnering with BAM on secondary ticketing. Will the Ace / Red Sox partnership have a negative impact on the the secondary ticketing agreement that BAM reached with StubHub (eBay) last August? (StubHub will continue to resell plenty of Red Sox tickets.) Certainly when StubHub agreed to be the official online reseller of tickets for all 30 MLB franchises the anticipated relationship with the Red Sox would have been an important component. Ian Donnis quoted StubHub spokesman Sean Pate.
We’re disappointed the Red Sox have elected not to participate in the StubHub/MLB ticketing partnership. The team will always have the option to integrate our two systems. Regardless of any official designation, Red Sox fans will continue to see the best selection of seats and prices on StubHub, as they have for many seasons. Ticket prices at StubHub are driven by hundreds of different sellers competing with one another, where conversely, at brokerages like Ace only one party dictates the pricing.
In a separate piece Mr. Donnis reports that the Red Sox are not ruling out “sanctioning” those who resell their tickets at StubHub. “...when asked whether the Sox might sanction those who sell their tickets on StubHub, Goodenow (Sox spokeswoman Susan Goodenow) would only repeat that the team is “exploring all options.”
In a glaring example of the unresolved struggle between clubs and leagues (all leagues) for control of digital rights, BAM might still place a StubHub banner ad on the official Boston Red Sox website. From Jenn Ableson at Boston.com.
Red Sox' snub of StubHub means that season ticket holders no longer have an "official" way to resell tickets online. MLB Advanced Media, which oversees the league's interactive enterprise, will decide within 30 days whether to place StubHub banner ads on the Red Sox' website, according to spokesman Matthew Gould. MLB runs all the team websites through a centralized operation
The Red Sox have explained that their decision to opt for Ace Ticket over BAM / Stub Hub is a result of their commitment to provide a safe forum for their fan base to sell and buy Red Sox tickets. According to Sam Kennedy, the Sox’ senior VP for sales/marketing, “Our biggest concern, frankly, is fraud,” and the potential distribution of counterfeit tickets through Internet sales. “We felt it was incumbent on us to direct people to an offline location endorsed by the team,” Ace operates seven Boston area locations. (Read Maury Brown's interview with Sam Kennedy )
Select Read More to see more details on the Red Sox Ace Ticket deal, and how it conflicts with MLBAM. Add your comments, as well.
In the aforementioned Boston.com (part of the Boston Globe) article, Ace founder Jim Holzman promotes the same message as the Red Sox.
We know exactly where tickets come from and make sure we do all we can to offer customers legitimate tickets," Holzman said. "The secondary market is rampant with websites of anonymous people, and you really don't know who you're buying from."
The Red Sox’ and Ace’s stated concerns regarding the integrity of online secondary ticketing run counter to Bob Bowman’s (President & CEO MLBAM). Mr. Bowman was quoted in this Chris Isidore piece on the success of StubHub.“ Without question, the increasing knowledge that there is a vibrant, safe, legal liquid market for the tickets encourages our fans to buy season ticket packages, since they know they can recoup some of those costs."
Ian Donnis questions if the Red Sox snub of BAM / StubHub is partly a reaction to a perceived backlash amongst some Red Sox fans over online secondary ticketing.
The simmering discontent in Sox Nation could be seen during the team’s January 26 online sale, when some of those attempting to buy tickets used a discussion thread at the Sox-obsessive site Sons of Sam Horn (sonsofsamhorn.net) to blame the difficulty of obtaining tickets at face value on a relationship struck this past year between StubHub and Major League Baseball.
Mr. Donnis questions if MLB’s deal with StubHub is inflating ticket prices.
David M. Carter, executive director of the Sports Business Institute at the University of Southern California, doesn’t think StubHub is creating upward pressure on the price of Sox tickets. “I think they’re providing a mechanism to buy and sell tickets,” he says, “and the market is determining the price.”
The Red Sox have stated that they will not profit from the reselling of tickets at Ace. Instead the Red Sox have reached a sponsorship agreement with Ace, providing them with signage inside Fenway Park. Ace already had a sponsorship agreement in place with Red Sox owned RSN NESN.
According to Chris Isidore, MLB receives “...a cut of the 25 percent combined commission that StubHub gets from the buyer and seller when a ticket is sold.” This revenue is redistributed (shared) via BAM. In the aforementioned Boston.com article, Don Hinchey, a spokesman for Bonham Group, a Denver sports- and entertainment-marketing firm, is quoted on the Red Sox possible financial motives for striking a deal with Ace. "My sense is the Red Sox looked at how much money they could generate from linking up with StubHub and the umbrella agreement with MLB and compared that with revenue figures from the deal they made with Ace,"
Recent comments by Red Sox Chairman Tom Werner indicate that secondary ticketing is not the only matter on which they differ with BAM. Mr. Werner acknowledged there is “ some tension “ between clubs and BAM concerning control of local digital media rights. Werner told Sports Business Daily.
“BAM and its success is a remarkable business story….At the same time, when we acquired the rights to the Red Sox, we believed that we were acquiring the video and radio rights for games in our own territory. So there is some tension.
"As everybody knows, there is a stalemate right now … in terms of in-market streaming," Werner said. "In-market streaming is good for the customer. But from our point of view, it has to be done in conjunction with our RSN and our affiliates, such as Comcast and Time Warner, in such a way that the product being offered to the consumer is complementary rather than competitive with the games that are on satellite and cable."
Asked how MLB would resolve the issue, Werner quipped, "Well, we are going to have an arm-wrestling match with Bob Bowman," MLBAM’s president and CEO.
Noting that in the future, fans increasingly will be watching games on the Internet and on cell phones and other digital devices, Werner said, "There is going to have to be some economic solution that works for all the parties."
Bob Bowman acknowledged in this interview with Maury Brown that much concerning this issue remains unresolved.
There are far bigger issues there in terms of territories: local rights, national rights, satellite rights, the outer market satellite package and cable package, national TV rights.... Whatever Bob (DuPuy) and the Commissioner ultimately decide should or should not be done, you know BAM is the recipient. We are not at that table. We get told what’s going to happen. It is more important in terms of managing the local rights and the national rights than what BAM’s rights are.
As Mr. Werner questions the role of BAM as a competing broadcaster, BAM is announcing an extensive series of content additions and enhancements on MLB.com . January 1 MLB will expand it’s broadcasting interests when the MLB Network launches in an anticipated 50 million plus homes. SBJ reports that MLB has begun the search for a CEO to lead the network. “The search prospectus, interestingly, only makes a cursory mention of MLB Advanced Media and does not name its chief executive, Bob Bowman.” Club owners will comprise five of the nine network board members. One of the those owners is Tom Werner.
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