Ticketmaster's Hail Mary Pass

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Bigger Game

Those existing deals mean the NFL cannot immediately deliver the ticket reselling rights for all 32 of its teams. In fact, Ticketmaster already controls secondary ticketing for 17 NFL teams, including the New York Giants, the Dallas Cowboys, and the Pittsburgh Steelers. A new deal could potentially give Ticketmaster control over ticketing for the other 15 teams over the next five years.

To help solve this problem, the NFL has promised Ticketmaster that it will lobby team owners, who call the shots in the league. Already, the NFL has approached team owners and gotten them to agree in principle to support a mandate requiring all teams to shift their business to the auction winner after their existing ticket contracts expire over the next few years, sources say. But it remains to be seen if the NFL passes that resolution, or if teams buy in.

Restrictions that the NFL has imposed on ticket reselling also depress the economic value of the deal. Under the terms of the agreement, each NFL team will be allowed to maintain its own ticketing policies as part of any secondary ticketing deal. The problem is some teams, including the New England Patriots and Denver Broncos, forbid fans from reselling tickets for above face value. In December, 2006, the Patriots sued StubHub for allegedly inciting fans to resell their tickets for above face value, and the team has revoked the season tickets held by a number of fans caught reselling their seats. "Ticketmaster is so desperate they are willing to live within those constraints," says one source close to the deal. "It will buy them time to gloss this thing up."

Ticketmaster's huddle with the NFL is part of a bigger game. On Nov. 5, Barry Diller, the chief executive of IAC/Interactive, which owns Ticketmaster, announced he was breaking up the struggling conglomerate. To complete the breakup, Diller may be forced to sell one of its chief assets to Liberty Media (LCAPA), which owns a controlling stake of IAC.

More Action in Sports Ticketing

Initially, Liberty Media Chairman John Malone expressed interest in snapping up IAC's Home Shopping Network. But after Diller set a high price for the retailer, Liberty Media CEO Greg Maffei said on Dec. 3 that the company may also be interested in Ticketmaster (BusinessWeek.com, 12/4/07). Striking a deal with the NFL could increase the value of Ticketmaster, no matter who ends up buying it, though the value of such a deal is unclear.

While Ticketmaster has signed up hundreds of entertainment venues to use its secondary ticketing platform, called Ticket Exchange, it has had less success convincing sports ticket owners and consumers to use its ticketing market. A search of the Denver Broncos section on Ticketmaster's Web site showed zero tickets for sale for the Dec. 30 game against the Minnesota Vikings and only 131 tickets for sale for the Dec. 9 game against the Kansas City Chiefs. By contrast, StubHub listed 237 tickets for sale for the Chiefs' game and 500 tickets for sale for the Vikings game.

Ante is the computers department editor for BusinessWeek.