NCAA Tournament Drives Ticket Resale March Madness

NEW ORLEANS -- ( MainStreet) -- For college basketball fans, there's only one thing bigger than their team going to the Big Dance: the big demand for tickets once they've made it.

The NCAA Division I Men's Basketball Tournament is unique in the sports world not only for its 68-team format, play-in games and seeding, but also its approach to doling out tickets. Only 30% of all tournament tickets are available to the general public, with the remaining 70% divided among the Final Four schools and their discounted, ID-only student sections (25%), the Division I Institutions and Coaches Associations (15%), the host cities (10%), NCAA committees (10%), broadcast and corporate partners such as CBS ( CBS), Coca-Cola ( KO), AT&T ( T) and Capital One ( COF) (5%) and the NCAA's luxury hospitality packages (5%). Even when tickets sneak onto the secondary market, their prices and availability can fluctuate far more wildly than those of other major sports.
Brandon Davies of the Brigham Young Cougars drives to the basket Tuesday in Dayton, Ohio, in the first round of the NCAA men's basketball tournament.

"When you put it into perspective with the Super Bowl or with the NFL playoffs or the NBA or NHL playoffs, it's a much slower and different dynamic," says Joellen Ferrer, spokeswoman for eBay ( EBAY)-owned ticket resale site StubHub. "With the Super Bowl, you've got a week to do things, with the others you have a series to deal with, so there's less of a day-to-day, hour-by-hour changing marketplace."

That makes the random, errant March Madness ticket yet another treasure for an event that's basically a treasure chest. CBS and Turner Sports' deal to broadcast the NCAA tournament cost the broadcasters $10 billion and runs through 2024. The tournament has raked in more than $5.2 billion in ad revenue from 275 sponsors since 2002, according to Kantar Media, and saw revenue jump more than 20%, to $738 million, for last year's event. That's No. 2 among postseason sports properties, just behind the $900 million in ad revenue produced by the NFL postseason last year but well ahead of the roughly $450 million apiece in revenue produced by the Major League Baseball and NBA playoffs.

The tickets don't exactly fetch chump change, either. This year's matchups in the tournament's South bracket, where top-seeded Kentucky plays what's basically an opening-round home game in Louisville, are pulling in an average of $254 and have sold out 31% of their stock on ticket resale site TicketsNow, according to spokeswoman Jennifer Swanson. It's even costlier in the East, where first-seed Syracuse and second-seed Ohio State's opening performances in Pittsburgh helped drive ticket prices to an average of $441 and diminished supply by 19%.

"We see prices fluctuate for the tournament and they tend to skew higher in anticipation of some of the bigger teams like Duke, North Carolina and Kentucky," Ferrer says. "We're seeing that demand is quite a bit higher than what we saw last year and much of that is being driven by ticket sales for the games in Louisville and Pittsburgh because Kentucky is in its hometown and West Virginia's playing in Pittsburgh, which is in close proximity."

It's a bit more of a seller's market in the West, where the average ticket price has already hit $335, overall sales are up 38% and 35% of tickets are gone. Meanwhile, tickets are still a relative bargain at $189 in the South despite No. 1 seed North Carolina opening the bracket in Greensboro, N.C. Less than 15% of available tickets there have been sold.

Even with ticket prices ranging from $2 more than the 2011 average to $3 less, NCAA ticket resale is lucrative enough for the NCAA to want a cut of the action for itself. The NCAA partnered with ticket and hospitality provider PrimeSport to sell ticket packages and pregame amenities and oversee its NCAA Ticket Exchange for fan ticket resale. The NCAA doesn't put a cap on the resale price of the tickets and lets prices go to whatever the market will bear, while PrimeSport has seen a more than 60% rise in site traffic since 2007 as basketball fans seek its services.

Sam Soni, president of PrimeSport, says this year should be no different. He points to Kentucky's opening game in Louisville and the NCAA's fortuitous seeding that put Duke and North Carolina in Greensboro as evidence March Madness resale may only increase this year.

"There are two windows of sales here: When sites get announced and people locally or geographically close to the stadium buy tickets or packages regardless of the participants; and another wave once Selection Sunday happens and all the teams are routed to the different sites," Soni says. "We have seen a slight double-digit increase percentagewise in total sales volume from last year, though, and it's because we're seeing a lot of schools with rich basketball traditions whose fans travel well and the NCAA doing a good job of spreading the venues out geographically."

That geography could work out pretty well in the latter rounds, too, especially with the second-seeded University of Kansas poised to play in St. Louis if it escapes the early rounds and Kentucky playing in Atlanta in the Sweet 16 and Elite 8 if it escapes Louisville unscathed. It'll also work out for ticket resellers, which say they haven't been hurt by PrimeSport's NCAA partnership and will still see plenty of action once teams get knocked off.

"Obviously there are a number of options for fans but, by the same token, there are a lot of loyal people who have used StubHub throughout the season," Ferrer says. "Because of the dynamic of the tournament, a lot of people tend to buy strips of tickets under the assumption that their team will make it through the third session and advance to the next round. But when you see those upsets, prices drop and it turns into a fire sale with sellers trying to move tickets and fans of the other teams finding tickets at a pretty good value."

Of course, it doesn't exactly hurt prices when tournament venues are in places with rabid existing basketball fan bases -- Louisville and Portland, Ore., for example -- or are where fans would want to party anyway. Final Four tickets are already fetching an average of $942 apiece on TicketsNow, with StubHub finding that 10% of the Final Four ticket supply has been bought by fans in Louisiana, just beating out the 9% bought by New Yorkers and 8% bought by Texas and Kentucky fans.

"Collegiate sports used to be really participant-driven, but now there's so much participation and subscription from fans that want to see high-quality basketball and are in cities like Portland, Albequerque and Pittsburgh," Soni says. "New Orleans is always a city that consumers and corporations both covet visiting."

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Jason Notte is a reporter for TheStreet. His writing has appeared in The New York Times, The Huffington Post, Esquire.com, Time Out New York, the Boston Herald, the Boston Phoenix, the Metro newspaper and the Colorado Springs Independent. He previously served as the political and global affairs editor for Metro U.S., layout editor for Boston Now, assistant news editor for the Herald News of West Paterson, N.J., editor of Go Out! Magazine in Hoboken, N.J., and copy editor and lifestyle editor at the Jersey Journal in Jersey City, N.J.

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