National Events Market Theory 2005
This year has been very different from the past several years in terms of pricing for tickets to national events. We have been through several years in a row where almost all of the national events were average or weak tickets. They may have been weak because the economy was weak, or due to the cities the events took place in, or the fear of terrorism. This year they have all been hot.
The Super Bowl was one of the biggest Super Bowl tickets ever in the history of the Super Bowl. At the peak of the market, fans were paying as much as $3500 per ticket just to get in the door. The year before in Houston we had a wild market where on Friday the bottom was falling out and you could land get-ins for $700-$900 per ticket, but by Sunday afternoon you could fetch around $2000 per ticket on a get-in. Two years ago in San Diego tickets traded steadily around $1750 to get in all the way through. Three years ago in New Orleans, the 9/11 game as we call it, you could buy the tickets at face value $400 and less.
The Final Four in St. Louis was completely insane. Prices for distant view get-ins were $700-$800 even on the day of the game, and for the Monday game were $300-$400. Last year in San Antonio you could get face on Saturday and you were lucky to get face on Monday. Two years ago in New Orleans you were lucky to get face value on the get-ins either Saturday or Monday.
The Masters was much hotter this year than years past. The Masters badge was a steady $2500-$2750 all the way until the last week of March when we saw it completely blow up and brokers were asking as much as $7500 per badge. I believe that some badges did trade hands at $7500 and maybe more but it did cool off and ended up closer to the $3000-$3500 range over the weekend before the practice rounds. The Wednesday practice round tickets was much hotter also with prices peaking the week before the event around $450-$500 per ticket. The Monday and Tuesday tickets were about the same as ever. In 2004, Easter Sunday fell on Masters Weekend and held prices way below normal. In 2004 we were buying the badges at $1500-$1700 and selling them at $1800-$2100.
The Kentucky Derby was super hot this year. One of our Louisville contacts told us that of all the derby tickets he had witnessed that this was the biggest. Prices to get in peaked around $500, but the better seats were getting quite a bit more than usual. In 2004 it was a rainy week and tickets were easy to come by.
The US Open this year started off weak but is now finishing strong. In a week long event we see spots of weakness and strength. The Wednesday ticket is by far the tightest of all days. We have received as much as $95 per ticket for the Wednesday Putterboy ticket where in years past I am not sure we have ever received more than $45. The Wednesday grounds tickets are worth about $55 per ticket right now and they are usually a $10 ticket. The Weekend tickets are all holding up anywhere from 10%-30% higher than we have seen over the last several years and there has been no change in face value.
A lot of brokers both big and small have been getting crushed this year because of all of this price increase. Now some of you are saying, "How can this be?" A lot of people think that if prices are high the brokers must be killing it, but that is not the way it works. Yes some brokers have done quite well, but a lot of brokers have been hurt badly. This is a two-sided market just like the stock or options markets but there are actually three kinds of players in a two-sided market. You have brokers that do not take inventory, and do not short sell so they have no position or risk associated with a particular event and they simply flip tickets or "broker" them and make a small percentage each time. You have brokers that will take a short position meaning that they sell tickets they do not have for delivery later betting that prices will drop or ease and they can cover at a profit. Then there are brokers that go long buying in the tickets at good prices hoping to be able to quickly sell them to brokers or to the public for more than they paid making their profit. With all of the national events "blowing up" the short sellers have taken a beating all year.
Why is all of this happening? Of course, I do not really know, or pretend to know but as always I have an opinion. It could be the opposite of what I mentioned above, that the economy is doing well, that the election uncertainty is over and W is safely in the White House, that the fear of terrorism here on our soil is dissipating, the teams and the site locations are better, and or some of the arenas are smaller in size so there is less supply. I am quite sure that some of the reasons I just listed played some role small or large in these events, but they do not make up my theory. My theory is that because we had several years of average price to weak price events and the short sellers were doing well the number of short sellers in the market increased. With more and more short sellers entering the market each year the amount of short orders for national events has gone up big time. More short orders means more short covering. If you take a look at Barrons Business weekly in the back in the tables section you will find a table called "Short Interest." Short Interest is the number of shares currently short by speculators and traders in any particular stock at that given time. Obviously we do not have a Short Interest table for national events but the concept is the same. Short Interest is like a rubber band being stretched out that eventually has to pop. At some point the speculators have to cover and when they start covering sometimes a panic ensues and everyone starts covering as fast as possible and at whatever price. I think that some of this is what has been driving the prices in these markets, too many brokers with too many short orders that had to cover or they were through and their reputations ruined. At the Super Bowl this year there was some broker in the lobby of the Adams Mark that I had never heard of that was letting it be known that he was still short two hundred seats and was paying $3000 per for anything which is just the sort of insanity that makes the guys that have tickets say, "hmmm. I think we can get more, let's jack it up a few hundy and see if they still buy."
The follow on of this theory is that because so many brokers have lost so much money this year on national events a lot of them will go out of business, or quit taking short orders, or at the least continue to take short order but price themselves out of the market leaving only the big guys willing to take a shot on the orders at reasonable prices. Less short orders, less short interest, less panic buying .
Think about it.
Until tomorrow - Adios
The Super Bowl was one of the biggest Super Bowl tickets ever in the history of the Super Bowl. At the peak of the market, fans were paying as much as $3500 per ticket just to get in the door. The year before in Houston we had a wild market where on Friday the bottom was falling out and you could land get-ins for $700-$900 per ticket, but by Sunday afternoon you could fetch around $2000 per ticket on a get-in. Two years ago in San Diego tickets traded steadily around $1750 to get in all the way through. Three years ago in New Orleans, the 9/11 game as we call it, you could buy the tickets at face value $400 and less.
The Final Four in St. Louis was completely insane. Prices for distant view get-ins were $700-$800 even on the day of the game, and for the Monday game were $300-$400. Last year in San Antonio you could get face on Saturday and you were lucky to get face on Monday. Two years ago in New Orleans you were lucky to get face value on the get-ins either Saturday or Monday.
The Masters was much hotter this year than years past. The Masters badge was a steady $2500-$2750 all the way until the last week of March when we saw it completely blow up and brokers were asking as much as $7500 per badge. I believe that some badges did trade hands at $7500 and maybe more but it did cool off and ended up closer to the $3000-$3500 range over the weekend before the practice rounds. The Wednesday practice round tickets was much hotter also with prices peaking the week before the event around $450-$500 per ticket. The Monday and Tuesday tickets were about the same as ever. In 2004, Easter Sunday fell on Masters Weekend and held prices way below normal. In 2004 we were buying the badges at $1500-$1700 and selling them at $1800-$2100.
The Kentucky Derby was super hot this year. One of our Louisville contacts told us that of all the derby tickets he had witnessed that this was the biggest. Prices to get in peaked around $500, but the better seats were getting quite a bit more than usual. In 2004 it was a rainy week and tickets were easy to come by.
The US Open this year started off weak but is now finishing strong. In a week long event we see spots of weakness and strength. The Wednesday ticket is by far the tightest of all days. We have received as much as $95 per ticket for the Wednesday Putterboy ticket where in years past I am not sure we have ever received more than $45. The Wednesday grounds tickets are worth about $55 per ticket right now and they are usually a $10 ticket. The Weekend tickets are all holding up anywhere from 10%-30% higher than we have seen over the last several years and there has been no change in face value.
A lot of brokers both big and small have been getting crushed this year because of all of this price increase. Now some of you are saying, "How can this be?" A lot of people think that if prices are high the brokers must be killing it, but that is not the way it works. Yes some brokers have done quite well, but a lot of brokers have been hurt badly. This is a two-sided market just like the stock or options markets but there are actually three kinds of players in a two-sided market. You have brokers that do not take inventory, and do not short sell so they have no position or risk associated with a particular event and they simply flip tickets or "broker" them and make a small percentage each time. You have brokers that will take a short position meaning that they sell tickets they do not have for delivery later betting that prices will drop or ease and they can cover at a profit. Then there are brokers that go long buying in the tickets at good prices hoping to be able to quickly sell them to brokers or to the public for more than they paid making their profit. With all of the national events "blowing up" the short sellers have taken a beating all year.
Why is all of this happening? Of course, I do not really know, or pretend to know but as always I have an opinion. It could be the opposite of what I mentioned above, that the economy is doing well, that the election uncertainty is over and W is safely in the White House, that the fear of terrorism here on our soil is dissipating, the teams and the site locations are better, and or some of the arenas are smaller in size so there is less supply. I am quite sure that some of the reasons I just listed played some role small or large in these events, but they do not make up my theory. My theory is that because we had several years of average price to weak price events and the short sellers were doing well the number of short sellers in the market increased. With more and more short sellers entering the market each year the amount of short orders for national events has gone up big time. More short orders means more short covering. If you take a look at Barrons Business weekly in the back in the tables section you will find a table called "Short Interest." Short Interest is the number of shares currently short by speculators and traders in any particular stock at that given time. Obviously we do not have a Short Interest table for national events but the concept is the same. Short Interest is like a rubber band being stretched out that eventually has to pop. At some point the speculators have to cover and when they start covering sometimes a panic ensues and everyone starts covering as fast as possible and at whatever price. I think that some of this is what has been driving the prices in these markets, too many brokers with too many short orders that had to cover or they were through and their reputations ruined. At the Super Bowl this year there was some broker in the lobby of the Adams Mark that I had never heard of that was letting it be known that he was still short two hundred seats and was paying $3000 per for anything which is just the sort of insanity that makes the guys that have tickets say, "hmmm. I think we can get more, let's jack it up a few hundy and see if they still buy."
The follow on of this theory is that because so many brokers have lost so much money this year on national events a lot of them will go out of business, or quit taking short orders, or at the least continue to take short order but price themselves out of the market leaving only the big guys willing to take a shot on the orders at reasonable prices. Less short orders, less short interest, less panic buying .
Think about it.
Until tomorrow - Adios
posted by www.alphatickets.com at 9:35 AM
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