How Short-Sellers Became Losers in the Super Bowl Ticket Game

Jesse Lawrence
·5 min read

This guest column is from Jesse Lawrence, the founder of TicketIQ, a leading ticket search engine.

Thanks to GameStop and a handful of other publicly traded meme stocks, the mechanics of the short squeeze have been getting a lot of attention of late. What’s less known is that short selling has at times been a common, and disruptive, force in the market for Super Bowl tickets. While shorting commodities using inside information was made illegal in 2010, for Super Bowl tickets, the practice remained commonplace until 2015. After two decades of making money on the bet that Super Bowl prices would drop, in 2015, ticket brokers suffered their own short squeeze that ended an era of “cheap” last-minute tickets to the big game. It’s been a less-volatile market ever since, which means fans and brokers who once could expect a big price drop in the final 48 hours before kickoff are now likely out of luck.

TicketIQ began tracking Super Bowl tickets in 2010, and for the first five years, prices for the cheapest ticket dropped an average of 22% in the week leading up to the game. From 2016 until last year, the cheapest or “get-in” price has increased by 28% in the pre-Super Bowl week. The turning point was the 2015 Seattle-New England game. That year, prices increased by a whopping 187% in the final week, thanks to higher-than-expected demand from Seahawks fans and an abundance of short sellers who had been betting prices would fall. Like Melvin Capital and other GME short sellers, these brokers were forced to cover their positions, sending prices above $10,000 for the first time ever. While a lot of brokers lost big, others simply walked away from their losing bets, stranding fans in Arizona without a ticket.

While 2015 was a wake-up call for the NFL, it was hardly a surprise. Between 2010 and 2016, the peak quantity for Super Bowl tickets available averaged 8,450. This year, the high-water mark on the secondary market was 2,589. If we assume another 1,000 tickets are available through On Location Experiences, the NFL-approved ticket vendor, that means there are no more than 4,000 actual tickets available at any given moment. In 2014, quantity peaked at 13,000 tickets, which means that short-interest in some years was over 200%. According to highshortinterest.com, the only stock with short-interest above 100% is GameStop, at 121%.

Prior to 2015, the downward price trend between conference championships and Super Bowl Sunday was consistent not only because it was how consumers expected the market to behave, but more important, it was how brokers made the most money.

Here’s how it worked for the 2012 game in Indianapolis. The lowest face price for the Giants-Patriots clash was $800, which meant that a broker would get a ticket for around $1,500 from a player or coach. The broker would then post a ticket listing, often with no specific seat number, for $2,500—well above the price they expected a fan to pay on game day.

That year, ticket prices peaked eight days out from the game, at around $2,400, and then dropped by 40%, with the cheapest ticket available on game day for $1,354. For last-minute sales, on a $1,500 cost, a broker would generate a loss of $146, or negative 9%. For a ticket sold at the peak price, however, a broker would generate a profit of $900, or 60%. On a blended basis, brokers hoped to make 30%—not bad for two weeks of work.

While Super Bowl tickets had been a solid business before the internet, the always-on, everywhere-at-once nature of online marketplaces like Stubhub, TicketsNow and eBay made it a bonanza. Even brokers who didn’t have deals with a player or a coach could get into the action. Knowing that a ticket would be available on game day for a lower price, speculators who sold a ticket the day after the conference championship game for peak prices would net a quick profit of $500 ,or $1,000, with zero risk. Marketplaces like Stubhub were happy to facilitate it all and collect 30% fees on transactions that could get into the six figures.

The 2015 squeeze changed all that. It was a low point for the ticket industry and accelerated the transition to a more closely managed market, led by On Location, the private-equity backed company which the NFL has ownership in. Since On Location took over managing the Super Bowl ticket market, ticket prices have gone up between the conference championships and Super Bowl Sunday every year except one. (The 2018 game in Minnesota between the Patriots and the Eagles is the exception, as last-minute demand was literally frozen out by -4 degree weather.)

With pandemic-restricted supply and the Buccaneers becoming the first-ever host team in the game, the 2021 Super Bowl ticket market has been like no other in history. Steady prices, however, are likely to be the norm, which means it’s a good bet that anyone waiting for a last-minute, GameStop-like price drop will be disappointed.

In addition to TicketIQ, Lawrence founded FanIQ, a data-driven ticket marketing platform for sports teams, venues, festivals, and other live event promoters.

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