The State Of The Secondary Market For Student Football Tickets
We are living in the post-student ticket exchange era. If you were unfortunate enough not to secure student season football tickets, then you know all about the headaches of trying to get a ticket on the secondary market.
Gone are the days of entering the Exchange, seeing a ticket listed at a given price no greater than $60, and buying it on the spot. Now, students must navigate the perilous waters that are class Facebook pages in search of a “selling my ticket, message me if interested” post.
Yet the process does not stop once you find a seller, no. You must name your starting price, then wait an indefinite amount of time for them to either accept or, more likely, find an offer that bests yours. After which you can either raise and repeat the cycle again, or you can find another seller — and repeat the cycle again.
This may sound eerily familiar to anyone who has tried to purchase a Michigan or Ohio State ticket in the past when any big ticket would go straight to “Facebook auction” to avoid the arbitrary $60 limit on the student ticket exchange, but now it is the norm. Even for games like Idaho.
In its current state, the secondary market for student tickets is a system designed to curate higher prices — especially for the lower-tier games. Because buyers get locked into private message auctions, no one can see what prices tickets are selling for, which puts the buyer at a significant disadvantage in price negotiations according to Penn State economics professor Jadrian Wooten.
“You never really knew how much things were worth under the old system. People who didn’t want to sell their tickets illegitimately only got $60…but a White Out game would go for $150-200,” he said. “Ideally, bringing [the market] in front of people is supposed to lower prices, but you never know about the information portion. You could actually have higher-priced tickets as an outcome if people were selling them outside the market, but [buyers] didn’t know how much other people were selling them for.”
And with no formal time restriction on bidding, it’s easy for sellers to eventually find a higher bid and drive up prices. Just ask my roommate who agreed in principle to buy a ticket to the Idaho game from someone for $45 — until that person replied a few days later, claiming that he/she had someone willing to pay $65 for the ticket.
Another part of the problem is that there is no way to validate a seller’s claim of a high bidder let alone that the seller even has a ticket at all. The latter may be a more dubious hypothetical, but there certainly is a large incentive for a seller to lie in these exchanges without an official resale market.
So what’s the solution?
For one, there needs to be an official platform for student resale. It was obvious that the old student ticket exchange wasn’t working considering the fact that 77% of secondary ticket exchanges in 2018 were transfers, not resale offers through the exchange. Yet it would be naive for Penn State to think that those tickets are changing hands without reimbursement, which is where an official resale platform is essential.
Even if it took the form of an auction, it would at the very least reduce the current problems of asymmetric information. However, Wooten believes that Penn State could learn something from another Big Ten school when it comes to student ticket resale.
Northwestern might have the closest thing to a perfect secondary market for student tickets. In a system seemingly designed by the economics department to find the equilibrium ticket price for each game, students offer up their tickets for a given week into a large pool.
Then, the athletic department begins selling the tickets, starting at a high price and progressively decreasing until all the tickets are sold. Whatever the final price that clears the market is, that’s the price that everyone pays, and anyone who paid a higher price initially is reimbursed the difference in price.
This may be worse for sellers who prefer to gouge fellow students for a higher price, but it works out much better for buyers and universities who want to fill their stadiums.
“The flaw in selling tickets is that people want to go to great games and not many people want to go to bad games,” Wooten explained. “For Northwestern, the big thing is that all the tickets get sold and you have a sellout crowd. That’s what Penn State wants.”
In a perfect world, there would be no need for a resale market. Students who want to go to every game would be able to buy season tickets at the discounted rate of $32 a game, and they would be in attendance every week. Yet, as Wooten pointed out, the ability to sell one ticket to essentially cover the entire cost of the season is a powerful incentive to sell.
The secondary ticket market, in its current state, may just be a necessary evil, but it also raises questions about the allocation of student tickets in the first place.
One way to incentivize students to keep their tickets and actually show up might be to raise prices.
“If you sell out in minutes, the tickets are too cheap. It is very unpopular to say that your season tickets should be more expensive,” Wooten admitted, in true economist fashion. “But from Penn State’s standpoint, it’s a fairness thing. They set the prices low so that any student can go.”
However, the high prices students can fetch for individual tickets in the resale market make a strong case for the ability to raise prices no matter how unlikely it may be.
A possible alternative to raising prices would be a lottery driven system for student season tickets.
“They do priority tickets for season tickets, and they could do it for student tickets,” Wooten explained. “If a student their freshman year sold half of their tickets, why do they get the same opportunity to buy tickets as someone who went all of the games just because they have faster internet and happened to get on first?”
In theory, shifting the allocation so that everyone who wants to go to every single game, either by demonstrating that through attendance or paying a higher price tag, gets a ticket would eliminate some of the need for a resale market. Thereby, eliminating some of the underlying problems that drive up resale prices.
Nevertheless, it is impractical to imagine a world without a secondary market for student tickets, so the fact remains that the current system needs to be better. For the market to work for everyone, transactions must be official and prices must be visible. Penn State students deserve better than secret “Facebook auctions” and under-the-table Venmo payments, so do better, Penn State Athletics.
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About the Author
As part of the midnight clear, parking will be prohibited between midnight and 7 a.m. tonight, Saturday night, and Sunday night at all faculty/staff surface parking lots on campus.
Chieng also joked about a variety of topics like caning, finance, Brazilian jujitsu, and the morning-after pill.
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