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Season Ticket Buyer Value and Secondary Market Options

Author

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  • Michael Lewis

    (Goizueta School of Business, Emory University, Atlanta, Georgia 30322)

  • Yanwen Wang

    (UBC Sauder School of Business, University of British Columbia, Vancouver, British Columbia V6T 1Z2, Canada)

  • Chunhua Wu

    (UBC Sauder School of Business, University of British Columbia, Vancouver, British Columbia V6T 1Z2, Canada)

Abstract

Sports franchises derive significant portions of their revenues from season ticket holders. A development that may affect season ticket management is the growth of legal secondary markets. We develop a structural model that integrates both the supply and demand sides of the secondary market into season ticket buyers’ ticket purchase and usage choices. We use a panel data set that combines season and single ticket purchase records with ticket usage data to investigate the value of secondary markets. We estimate that the secondary market increases the team’s season ticket revenues by about $1 million per season. At the level of the individual season ticket customer, we estimate an increase in customer lifetime value ranging from $1,327 in the lowest quality seat tier to $2,553 in the highest. In terms of value to the customer, the average dollar value of having a secondary market is $138 per season ticket. Across segments, the secondary market provides the equivalent of a 4% discount in the premium seat tier versus an 11% discount in the economy seat tier. Whereas the secondary market creates more value in the premium-ticket tier segments, the secondary market has the most impact on behavior in the low price oriented segment.

Suggested Citation

  • Michael Lewis & Yanwen Wang & Chunhua Wu, 2019. "Season Ticket Buyer Value and Secondary Market Options," Marketing Science, INFORMS, vol. 38(6), pages 973-993, November.
    • Handle: RePEc:inm:ormksc:v:38:y:2019:i:6:p:973-993
    DOI: 10.1287/mksc.2019.1183
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    References listed on IDEAS

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    1. Hayri A. Arslan & Necati Tereyağoğlu & Övünç Yılmaz, 2023. "Scoring a Touchdown with Variable Pricing: Evidence from a Quasi-Experiment in the NFL Ticket Markets," Management Science, INFORMS, vol. 69(8), pages 4435-4456, August.
    2. Dmitri Kuksov & Chenxi Liao, 2023. "Restricting Speculative Reselling: When “How Much” Is the Question," Marketing Science, INFORMS, vol. 42(2), pages 377-400, March.
    3. Övünç Yılmaz & Rob F. Easley & Mark E. Ferguson, 2023. "The future of sports ticketing: Technologies, data, and new strategies," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 22(3), pages 219-230, June.

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