Michael Giberson
The 65 teams for the NCAA men?s basketball tournament have been selected. Maybe your team has been seeded well and suddenly you think there is a chance they will make it through to the Regional finals (aka the ?Sweet 16?). Can you still get tickets?
Sure, from some casual searching, I found online ticket vendors offering tickets at prices for as low as $150 for the Minneapolis Region to no lower than $370 for the Washington, D.C. Region. (Prices for the regional three-game weekend.)
Of course, had you known that your team had a good chance to make the regionals, you might have bought tickets earlier, perhaps finding tickets at the face value of $130 for upper deck seating. Except that until the seedings are announced, you have no idea which of the four regions you team has a chance to play in.
TicketReserve.Com offers a way around this logistical problem. In the continuation I explain what TicketReserve offers, why I think it is cool, why I think their ?game-within-the-game? is not ready for prime time, and how much it will cost you to bypass the ticket brokers using TicketReserve.
On the TicketReserve.Com website you can buy options called ?Fan Forwards? to purchase regional tournament tickets contingent on your team making it to the Sweet 16. (More precisely, you buy a contingent obligation to purchase the game tickets at face value. If your selected team gets into the regional event, you must purchase the tickets. They also offer Final Four deals as well as options on numerous other sporting events.) Using their service, you can purchase your fan forward contract well in advance, and rest secured that if your team gets in, you will have a ticket. Market-design geek that I am, I think that this contingent contract offering is cool.
Not only can you buy fan forwards, but you can post offers to sell fan forwards that you own and post bids to buy fan forwards at a price below the current best offer, so they are facilitating a secondary market for their fan forwards. Cool.
Game-within-the-game
TicketReserve also wants to encourage participation in the ?game-within-the-game.? As they explain in their FAQ, the prices of the fan forwards tend to vary with the performance of the team. Explained elsewhere on the site is their fee structure. For NCAA fan forwards, they charge both buyer and seller 5% ($5 minimum) for each transaction. So every time you buy low and sell high — or if you buy high and sell low — you generate at least $20 in fees for them, and $10 of that will come out of your proceeds. Since they limit buyers to no more than 4 NCAA fan forwards per team, it takes at least a $3 move up in price to generate a net profit. That is if you can find a buyer. Judging by the bid-ask spread, these markets are not very liquid.
For example, this morning $175 was the best available offer a Duke fan forward for the Regional and $100 was the best available bid. (All prices as of about 9 AM EST, today.) If you buy in at $175 and hope to resell in the ?game-within-the-game?, you are hoping that someone will be willing to pay at least $178. Notice, by the way, that at $175 for the fan forward + $130 face value, the Duke fan forward will get you to the Atlanta Region game (if Duke wins its first two tournament games) for $305 plus fees. At ticket broker online is offering similar tickets for $225, and you get a sure ticket rather than just a contingent obligation to purchase a ticket if Duke wins.
Another example, at the other end of the market, is my graduate school George Mason. Mason is the #11 seed in the Washington, D.C. region. This morning you can purchase a Mason fan forward for best offer of $6, but there is no standing bid. If Mason makes to the regional games, then holders of the forwards will get into the Verizon Center for a mere $136 plus fees. Similar tickets cost $370 from ticket brokers, so it would be a great deal for holders of Mason fan forward, should they make it that far in the tournament. Just a simple matter of Mason beating Michigan State, and then, gulp, North Carolina (or, just possibly, Murray State. Go Racers!).
I don?t think the game-within-the-game will take off for TicketReserve, at least not for NCAA basketball tourney fan forwards. The markets are too thin and the fees are too high. TicketReserve could encourage participation in the game-within-the-game if they provided better historical data on prices and volumes. It is easy to get current prices, and they provide some information on transaction prices, but it is impossible to find past prices or other data that would support the sports-market junkie seeking to successfully buy and sell fan forwards. (I haven?t followed the professional sports fan forwards markets, but suspect they are more active and therefore more supportive of the game-within-the-game.)
Bypassing the ticket broker, at a cost
Now that the teams have been announced, a certain amount of additional structure is available to analyze the fan forward market for the NCAA regional games.
It is necessarily the case one team from among the #1, #8, #9, and #16 seeds will be in the regional final. Similarly for the groupings (#2, #7, #10, and #15); (#3, #6, #11, and #14); and (#4, #5, #12, and #13) ? exactly one team for each grouping will be in the regional finals. So, buy buying a grouping of four fan forwards, you can guarantee that one of them will pay off with the right to buy a ticket at face value. Given that ticket brokers are willing to sell you a guaranteed ticket for above face value, the question is whether you can save any money by buying your way into a guaranteed ticket though TicketReserve?
If you are interested in tickets to the Atlanta, Oakland and Minneapolis games, the answer is no. If you want a sure thing, the online broker is the way to go. In Atlanta, for example, an online broker is offering tickets at $225. Fan forwards for the least expensive group will cost $95 (#3 Iowa, #6 West Virginia, #11 Southern Illinois, and #14 Northwestern St. are $30, $45, $15, and $5 each, respectively), add the $130 ticket face value and your total is exactly $225. Considering all fees, however, and you are better off with the online broker.
You can save money by taking a small risk. Historically, either the #3 seed or the #6 seed earns their way to the Sweet 16 about 85 percent of the time. You can save $20 plus some fees by buying only Iowa and West Virginia contracts, but then you are taking on some risk, not building a guarantee.
Washington, D.C., is a different matter. The best price I found from an online broker was $370. The cheapest group purchase in the Washington, D.C. region was $149 (#2 Tennessee, #7 Wichita State, #10 Seton Hall, and #15 Winthrop at $119, $18, $7, and $5), which added to the $130 ticket face value would still save you $91 over the broker?s price – enough to cover your TicketReserve fees and have money left over for a hot dog at the games.