Cheap Seats Daily: Who Says Ted Leonsis = Dan Snyder?
The cost of jumping on the bandwagon, or just hanging on for the ride, went up this week. Ted Leonsis has hiked Washington Capitals ticket prices for next season.
"Ouch," says Mike Rucki from onfrozenblog.com.
Rucki writes that the tab for his seats went up "approximately 32%." The Great Dan Steinberg, in summarizing the inflation, says season ticketholders will notice their fees rising anywhere from 13 percent to 50 percent, depending on where the seats are and how late they decide to pony up to Leonsis.
Unless Leonsis needs some extra quick cash to finalize his purchase of the Wizards, the timing of the increase announcement seems odd. By issuing the raise decree now, Leonsis is, in effect, gambling that the Caps won't do as well in the postseason as every newbie fan around these parts is sure they will. Because if the organization held out until late spring before setting the price scale, and then Ovechkin actually leads the Caps to a Stanley Cup, the sky's the limit on how high Leonsis could shoot up the costs. The flip side: If the Caps bow in the first round after a season of unparalleled excellence and unbounded hype, of course, any price increase would be sketchy.
(AFTER THE JUMP: How much do options cost? Does Leonsis' involvement with OptionIt make him a man of the people or just another scalper? The end is near for UDC's Final Five? How come Five Guys burgers never stepped in? McKinley Tech once had four guys on the same All-Met team?)
In any case, the price increase comes at a time when the first fissures in what has been an iceberg-solid fan base have appeared. The dark side of owning a hot team has come through loud and clear lately. One commenter to Steinberg's post directed readers to a tale that appeared in the Daily Times, a Delmarva publication, claiming that Leonsis not only refused to give refunds to a fan who was snowed out of the Feb. 7 Pittsburgh/Washington game and unable to use her tickets, but mocked that fan via email.
"Blah blah blah — all was well — 16k people showed up and saw a great game — off your soapbox please," is how Leonsis is alleged to have responded to a refund request from snowbound fan identified as "Erin McKenzie Dean" of Salisbury, Md.
For the first time since he brawled with a young fan in the concourse of his home arena, Teddy Baby is getting some heat. In fact, he's having fans describe him with some variation of "Snyderesque," which in this market counts as the biggest insult any sports owner or administrator or family pet could ever be hit with.
But while the price increase and one sorry anecdote is hardly enough evidence to compare Leonsis to the Redskins boss, what with his decade of decadence, another recent addition to the Caps ticket inventory seems right out of Dan Snyder's How to Gouge playbook. This season, Leonsis teamed up with OptionIt, a fascinating and young company described on the team's web site as "a leader in the next generation of ticket buying for sports events."
The Caps say the partnership was forged to offer fans "a new way to secure access to a limited number of face-value tickets for the regular season as well as ALL potential playoff games." But the service itself actually guarantees that anybody who uses it will be paying more than face value for a ticket. In lay terms, OptionIt is a sort of state-of-the-art scalping service that hits up ticketbuyers earlier and, theoretically, with less oomph than a street scalper or professional ticket broker would.
Technically, OptionIt, which was founded by ex-traders on the Chicago commodities market, sells options on tickets to future Caps games, or, in the case of the playoffs, potential future Caps games, the way a trader on the floor of a commodities market might sell pork futures.
So, for example, for the regular season game against Dallas at Verizon Center on March 8, you can buy options from OptionIt for two $45 tickets for a total of $10, or four $90 seats for $35. Purchasers can then decide whether to exercise their option until the day of the game. If they decide to buy the tickets, they will pay face value. If they opt to not purchase the tickets, they lose their $10 or $35.
The playoffs are a trickier and a bigger gamble for purchasers. Options on Game 7 of the Eastern Conference Finals run from $42 to $123. Game 1 of the Stanley Cup Finals options are now going for $67 to $188. Game 7 options are sold out.
Unlike the Dallas regular season game, which barring a natural disaster or a plane crash will come off on schedule, there's hardly a guarantee that those particular playoff games will even be held. The Caps could sweep a series or, heaven forbid, choke in an earlier round of the postseason tournament. The Caps, in their nearly four decades of existence, have never played a Game 5, Game 6, or Game 7 in the Finals, and, having been swept in 1998, the team's only appearance in the championship round, only once each for Games 1-4.
And if a game doesn't happen, for whatever reason, the options purchaser loses every penny.
Options services have been tried before, but failed because the options sellers couldn't deliver coveted tickets come crunch time. But unlike its predecessors, OptionIt has negotiated deals directly with the management of the teams it's selling ticket options for. So, Leonsis has made a certain number of tickets in all price ranges unavailable for sale in the general ticket pool, and earmarked those tickets to OptionIt customers.
In exchange, Leonsis and OptionIt split the profits derived from the options sales.
OptionIt vice president Michael Proman, one of the company's two full-time employees, argues with passion and effectiveness that his services are friendly to the common fan. Professional scalpers are the ones who are priced out by the options offering, Proman says.
"Yes, we do have some scalpers [buying options]," Proman told me by phone from the NBA All-Star game, where he said OptionIt's product was very well received. "But the way we price our options actually deters scalpers. They want 50 to 100 percent profit on their inventory, but our pricing [the cost of the options plus face value tickets] is 25 to 30 percent below what the scalper market is. We think it's enough to give the fan a great deal, but it's not cost effective for the scalper [to buy options]. The whole notion of this is that people are priced out of the market when these high-profile games happen. And if people want to assure themselves affordable access, anybody can go buy an option, if the team makes it to the Stanley Cup finals, that's going to price itself out of 90 pecent of the people's budgets."
Proman's role is above-board, smart and maybe even visionary. But why would a team owner get involved in adding costs to fans? Does Leonsis' partnership with OptionIt make him a gouger or a guy looking out for the common fan? Or both? Does it make him, um, Snyderesque?
In any case, you can't deny it's novel.
More to come.
Jeff Ruland and UDC's Final Five lost last night at home to the University of the Sciences Devils, 72-57.
But here's some great news: Just one game left on the Firebirds schedule!
A recap of the awesomeness of this year's UDC team for those who A)have been trapped in a wi-fi-less snow drift for eons, or B)aren't either of Cheap Seats Daily's regular readers, and somehow missed the bombshell delivered in this space last month: Because of injuries and quitters, Ruland's team has been playing the second half of the season with a roster of only five players.
Opposing coaches haven't had problems figuring the unique Box-and-None defense Ruland's had to employ when one of his Final Five needs a breather. The Firebirds haven't won since the roster was pared. The team's record now stands at 1-17). But all the misery will end for now as UDC hosts Central State at 3 p.m. on Saturday. Admission is free, and worth every penny.
Biggest tragedy of UDCs 2009-2010 season: For all its shorthandedness, the school never landed a sponsorship deal with Five Guys hamburgers...
Funeral services are scheduled for Saturday at St. Anthony's on 12th Street NE for McKinley Armstrong, the longtime basketball coach at McKinley Tech high school in the District. In 1969, Armstrong fielded one of the strongest teams the city ever saw: Legend holds that four players from the same squad were named First Team All-Met.
Chew on that.
Story tips? Wanna Play the Feud? Tube amps for sale? Send to: email@example.com