Tickets Optional

There are fans, and then there are fans.

While a fan might pay hundreds of dollars beyond face value on the secondary market for a ticket to their favorite team’s playoff game or their favorite artist’s latest world tour, a fan might be willing to pony up cash months or even years before an event just to ensure the opportunity to score a ticket.

A newly launched company in the options business is betting on the fans to do just that.

OptionIt, which was launched roughly six weeks ago, has partnered with the National Hockey League’s San Jose Sharks and a few National Football League teams to provide ticket options to high-demand events.

Company CEO Mark Mastalir explained to Pollstar the idea behind options and how he thinks it’ll translate to the concert industry.

“An option is a contract giving someone the right, but not the obligation, to buy a ticket in the future at face value,” Mastalir said.
OptionIt partners set aside inventory that might otherwise end up on the secondary market for fans who don’t mind paying a little up front to reserve the right to score tickets later.

Mastalir cited the relative scarcity of Sharks tickets as one example.

“Unless you’re a season ticketholder of the Sharks, it’s very difficult to ever get a ticket to a game at face value,” he said. “Fans are forced to go to the secondary market – that could be anything from a ticket broker to StubHub to whomever – and buy tickets at multiple times over face value.”

Partners provide information on going rates for tickets on the secondary market and options are priced accordingly.

For example, a ticket with a $100 face value that sells for $200 on the secondary market might feature an option price of $50.

“That means if you bought the option for $50 and decided to exercise it … you would be paying $150 all-in for a ticket, which is $50 less than you’d be paying on the secondary market,” Mastalir said. “Plus, you know the ticket is guaranteed by the rights holder.

“Most of the time, you know exactly what seat location you’re buying your ticket in and you’re not having to pay that full price up front. Fans like the flexibility and convenience and they’re always paying less than what they’d pay in the secondary market.”

And when the time comes to “exercise” that option to purchase a ticket at face value, a fan puts up the rest of the cash. But if plans change, they’re not stuck with a ticket. Options can also be resold through the company’s Web site.

Revenues from options and option resale fees are split between OptionIt and the rights holder, capturing some of the profit that often goes to brokers and secondary marketeers.

While the company is focusing on sports to launch and prove the business model, Mastalir said options also make a lot of sense for those concerts where it’s nearly impossible to get tickets.

“I’m a huge fan of Springsteen,” he said. “I’ve seen him many times. And I would be willing, from a consumer standpoint, to say, ‘You know what – I want to put down $25 to have the ability to buy a ticket for face value anytime Bruce Springsteen comes to the Rose Garden in Portland, Ore.’

“That’s something, from a fan perspective, I would definitely be willing to do. We don’t know if it’s going to happen this year, next year, or maybe never. … People that are true fans would be willing to put down the money for something like that hoping that it happens.”

The company also offers “experiential” options that could easily translate to VIP packages.

Mastalir understands the concert industry is a different beast than the world of sports, but believes options could catch on once the right artist embraces the idea.

“I think it’s really going to take a very prestigious band or group to say, ‘Hey. This is kind of cool, flexible and unique for our fans. Let’s try something different.’”