OK, I just want to take some of your valuable time to tell you a little about one of the clients for whom I’m doing work – their business is quite possibly the coolest thing ever. Essentially, they provide a way for a fan to get tickets to things like the Rose Bowl or the Super Bowl at just a little over face value.
The client is The Ticket Reserve, Inc. (and it’s a private company, so no, you can’t buy their stock on any market). The website is http://www.theticketreserve.com Essentially, they sell contingent futures for sports tickets. If your future hits, then you get the right to purchase a ticket for the event at face value.
Allow me to give an example. Say you were a die-hard Redskins fan who had a lot of faith in your team at the beginning of the season. So you purchased 2 futures for “Redskins in Super Bowl” at $20 each, which is what they cost back then. If they were to go to the Super Bowl, you would get to purchase two Super Bowl tickets at face value - if they didn’t, you lose the $40.
And, as an added bonus, the futures are tradable on the Company’s site up until the point when they are either fulfilled or cannot be fulfilled - it functions like a market in the futures of sports teams.
I’m just really stoked about this client right now – this is an awesome idea, and they’re doing an excellent job growing their business. It’s so cool that I don’t even mind that I blew $100 on 4 now-worthless futures that the Raiders would go to the SuperBowl (what can I say – Randy Moss and Lamont Jordan were exciting free agent acquisitions).
I know there are some die-hard sports fans on here, so I thought I would share. Enjoy.
[quote]Essentially, they sell contingent futures for sports tickets. If your future hits, then you get the right to purchase a ticket for the event at face value.
And, as an added bonus, the futures are tradable on the Company’s site up until the point when they are either fulfilled or cannot be fulfilled - it functions like a market in the futures of sports teams.
[/quote]
No wonder this company is growing, the odds are stacked against you big time to say the least (read: insane profit margin, especially given the lower overhead associated with a strictly web-based operation).
The user agreement is written in an interesting, they avoid a lot of potential problems as they don’t run the futures market themselves, just provide the service. Sounds good until you take into account the case of Napster. Napster wasn’t violating copyright laws, just providing a service that allowed people to do so. My guess is that some regulatory agency will come down on them for providing a service that essentially functions as an unregulated futures market.
It will be interesting. They have a no-action letter from the SEC concerning the “fan forwards” being securities. The CFTC is technical, but I assure you it has been and is being considered. There are numerous other legal considerations – mostly matters of first impression, which is not unusual for a really new concept like this.
At any rate though, I just think it’s an awesome model. With the Rose Bowl, people were buying fan forwards for Texas at only $100 above face value when they first went on sale. As one would expect for an efficient market, the price went up when it was more likely that Texas would be in the game – and right before it closed, I’d guess the fan forwards were selling for a price that was very close to the premium charged for actual tickets by ticket brokers.
I like it because it’s a win/win proposition – from a fan’s perspective, they have a chance to lock in a price on big game tickets for their favorite team – if the team makes it, they get tickets for well below scalper prices (assuming they could even buy them). If the team doesn’t go, they lose the value of the fan forward only – essentially a hedge. From the team/league’s perspective, they get to capture some of the value of the secondary ticket market from scalpers and ticket resalers.
Its always so interesting to watch the agencies’ wheels turn as they try to figure out how they are going to approach these new concepts for which no precedent really exists. It does sound prety worthwhile so long as you are willing to accept the odds involved.