SeatGeek Wins $100 Million Deal To Resell MLB Tickets

Major League Baseball has a new secondary ticket marketplace.

Mobile platform SeatGeek will replace StubHub, effective immediately, as the league’s official reseller. Financial terms weren’t disclosed, but industry sources told Forbes the deal is a revenue-sharing agreement that promises MLB roughly $100 million over five years.

MLB clubs will have access to SeatGeek’s data to help expand their customer bases. MLB chief revenue officer Noah Garden told Forbes that discussions with SeatGeek intensified last year, and that MLB thoroughly examined SeatGeek’s technology to ensure the platform could handle the extra volume of users.

“We dug in and were happy with what we found,” Garden said.

MLB revenue was a record-high $10.8 billion for the 2022 regular season, with attendance accounting for about 40%. The number of fans coming through the turnstiles has fluctuated because of the coronavirus. MLB attracted about 64.6 million fans last season, up from 45.3 million fans in Covid-affected 2021 but down from 68.5 million fans in pre-pandemic 2019. The record of 79.4 million came in 2007.

MLB tickets remain the lowest-priced among the four major leagues, averaging over $35, according to research firm IBISWorld. By comparison, NFL fans pay the most, at an average of more than $100.

MLB is trying to lure younger fans that use SeatGeek’s platform while enhancing its “open distribution strategy” around ticketing, the way it does sports betting. For example, though competitor StubHub will not have the title of official reseller, MLB expects to negotiate a smaller deal with the platform to operate in its ticket ecosystem. StubHub held MLB’s official resale rights since 2007.

“It’s like distributing content,” Garden said. “You used to distribute on your website. Now, you distribute on YouTube, Facebook and Twitter. Why? Because they have different audiences. And even though you’re distributing in all those places, you’re doing it slightly differently. No different from ticketing.”

SeatGeek was founded in 2009 and is valued at $1.2 billion, according to PitchBook. In August 2022, the company raised a $238 million Series E from investors, including Utah Jazz billionaire owner Ryan Smith. In June, SeatGeek and blank-check firm RedBall Acquisition Corp. terminated a $1.35 billion agreement to go public amid a tumultuous financial market.

SeatGeek makes its money from transaction fees. The agreement with MLB adds to the company’s sports portfolio. It includes the NFL’s Arizona Cardinals, Baltimore Ravens, Dallas Cowboys, New Orleans Saints and Washington Commanders. Forbes reported that SeatGeek is paying the Commanders $10 million to $12 million a year for four years. Also, SeatGeek landed a significant partner in collegiate sports ticketing giant Paciolan for its secondary rights. That deal starts in July. The company has NASCAR, MLS and the NBA’s Cleveland Cavaliers, New Orleans Pelicans and Jazz.

Team agreements with SeatGeek usually last five to seven years. The exception is the Brooklyn Nets. The parties terminated their contract in January after initially agreeing to terms in July 2021. The reason, SeatGeek cofounder Russ D’Souza told Forbes: the Barclays Center wanted to amend the agreement and requested SeatGeek sell only Nets games and no third-party events.

“We felt that was not the best decision for SeatGeek,” D’Souza said. “So, we decided to go in different directions.”

Revenue at U.S. sports franchises is projected to be $44.2 billion in 2023. Of that figure, ticket sales will account for about 37%, said IBISWorld. With that in mind, D’Souza said the decision to bid for MLB was primarily about amplifying SeatGeek’s brand. In addition to StubHub, its competitors include industry giant Ticketmaster and AEG Worldwide.

“There’s a visceral difference that we believe exists when you open up the SeatGeek app and look to buy a ticket that doesn’t exist anywhere else in the industry,” D’Souza said. “We’re not in a position where we have to show a bunch of flashy slides anymore.”

SeatGeek declined to reveal financials, but during its flirtation with public markets, it revealed net revenue of $186.3 million for 2021. That was up from $33.2 million in 2020, when the pandemic paused live events. SeatGeek said its revenue was $142.2 million in 2019. D’Souza said the MLB deal is “massive” for future income due to the 81 home games per club.

“Better resale product helps generate more season-ticket holder sales,” D’Souza said. “We think this is the ultimate win-win.”