Boxing writers tend to be a predictable lot. After the initial outrage that the Floyd Mayweather versus Conor McGregor fight was taking place at all, it was inevitable that some writers would direct their ire towards the financial aspect of the fight. Something I covered in a piece back in June. The laughable argument being that unless the MayGregor fight makes more money than MayPac, it can only be viewed as a failure.
Tim Dahlberg of the Associated Press argued that not only were tickets still available for sale showing a lack of demand, but that there weren’t enough tickets on the secondary market.
“There’s fairly little sales going on in general,” said Chris Leyden, a content analyst for SeatGeek.com. “I think a lot of it has to do with where prices are now. I think people are a little uncomfortable paying this much or maybe even more.”
The situation is much the same at StubHub, where demand for tickets is lower than it was at the same time before Mayweather’s fight with Manny Pacquiao two years ago.
“We’re not necessarily seeing demand levels for the fight yet,” said Johnna Hoff, a StubHub spokeswoman. “The encouraging part is people are buying some tickets.”
Then, Andreas Hale wrote a piece for Yahoo Sports talking about how there were now too many tickets on the secondary market and that also showed there were problems with the MayGregor sales. It also contained this rather baffling statement.
The secondary market is just as, if not more, important than the initial ticket sales as it gauges public interest as the fight date approaches.
Sorry, Andreas. The secondary market is a result of promoters under-pricing their tickets relative to true demand, and scalpers make their profit on exploiting the difference. The secondary exchanges make their money by charging transaction fees in return for being trusted intermediaries. It’s a practice that has grown so large that Ticketmaster itself started running a secondary service.
Promoters have been hesitant to raise their prices because they want to avoid being called “greedy” and thus continue to offer entry-level tickets that just end up on these scalping marketplaces at inflated prices. Under-pricing can result in events like the Golovkin versus Brook fight where almost the entire inventory of public tickets landed on the secondary market minutes after they went on sale. How does this benefit the fighters or the fans?
For Mayweather Promotions, the promoter of the MayGregor fight, they weren’t going to let the secondary market profit off pricing mistakes. They priced the tickets to match the level of demand for the event. And much to the dismay of boxing writers, tickets have been selling just fine. As evidenced before Floyd Mayweather’s media workout when Mayweather Promotions CEO Leonard Ellerbe ethered the pundits by declaring that ticket sales had already surpassed $60 million.
And for those that think that Mr. Ellerbe was just engaging in promoter bluster to disguise poor ticket sales, you can now look for yourself. When it went live the morning of August the 14th, there was just a slight change where the very last row of the 100 level seating was changed to $2500. In the morning there were around fifteen hundred tickets available for sale which is less than ten percent of the available amount that can be sold to the public.
Pricing tickets to fit demand is a bold action because of the previously mentioned reasons. This pricing model may also mean a promoter doesn’t get a sell-out, a spurious concept in itself given promoters can declare a sell-out at any figure they choose. But what will happen is that the promoter can extract full market value from the buying public.
Pricing to demand is also an action the secondary ticket brokerage sites live in fear of; for if the promoters cast aside the under-pricing that has allowed scalpers to profit then the Stubhubs of the world will disappear. Which might explain why they’re so readily available for quotes warning of the hazards of promoters pricing tickets “too high”.