I am not much of a soccer fan. Hence, I don’t really care that tickets for next year’s World Cup tournament go on sale today — except, as MarketPlace reports, the sales process is crazy complicated and kinda interesting (A confusing path to get World Cup tickets, Aug 20).[audio http://download.publicradio.org/podcast/marketplace/segments/2013/08/20/marketplace_segment05_20130820_64.mp3]
At a high level, the processes is broken into phases that reflect when the schedule is known. If you buy now, you don’t know where or when your preferred team is playing. If you wait until Phase 2, you will know just when and where your team is playing. By the third phase, the tournament is starting. For more, you can peruse the official FIFA brochure on how the process works.
What’s really interesting here is that both Phase 1 and Phase 2 include lotteries. So it’s not completely accurate to say that tickets go on sale today. Rather you can enter the lottery today but you will have the same chance of winning if you enter in early October. Why go through so much trouble?
The argument that FIFA gives is that this is all about fairness. To quote the official brochure “By providing a sales phase structure, FIFA aims to put in place a ticket purchase platform where all customers have a fair and equitable chance of securing tickets.” A true lottery would be fair in the sense that each entry would have the same chance of winning. Of course, one could stuff the lottery by submitting multiple entries. (We have made a similar observation in the past about Apple’s use of lotteries for allocation iPad minis.) That will be a little hard to do here since FIFA is asking for official ID information (e.g., a passport number) with each entry.
The downside of a lottery is that is potentially inefficient. I might enter as a lark (or just to see what I can get away with charging to my research budget), but there is no way on earth that I would count as someone who truly valued these tickets. However, I would have as good a chance as winning as my European colleagues who don’t understand that sports are more interesting when players use their hands.
So what is this really about? From what I can tell, this is much about controlling the secondary market as anything else. This convoluted system would make it very, very hard for an “investor” to acquire a large set of tickets for speculative purposes. Or to put it more bluntly, scalpers are screwed.
Would this work for other events? It might for one-off spectacles like the NCAA basketball tournament or the Superbowl. I don’t think it would work for regular season games. The Cubs have had a documented fight with the secondary market (see, for example, here) but that is partly about limiting what season ticket holders can do. Season ticket holders, however, have legitimate reasons to want tickets to be easy to reassign between users. For example, to the extent that a good number of season tickets are bought by firms to reward employees and schmooze clients, they need to be able to dole those out quickly. FIFA’s excessive restrictions likely would cause some season ticket holders to balk.
A final point. There is another approach to limiting the resale market. Call it the Kid Rock mechanism. Kid Rock got a lot of attention a few months ago by altering how prices for his shows were set. Effectively, prices were cut for most seats but jacked way up for the best seats. (See, for example, here.) The goal was to make sure that there were many, many average seats available for cheap so scalpers couldn’t compete on those while the prices on good seats were high enough that scalpers could not jack up those prices and be sure of selling them. Of course, there is no guarantee such a mechanism would work for the World Cup. There is a big difference in managing demand for a concert in a 18,000 seat arena and a wold event in a 50,000 seat stadium.