Major League Baseball taps StubHub as ticket reseller

By Eric Auchard

STANFORD, California (Reuters) - StubHub Inc. has agreed to a breakthrough deal to act as the official online ticket reseller for Major League Baseball and the 30 team sites it runs with local franchises, the organizations said on Wednesday.

The company said it has struck a five-year deal with MLB Advanced Media LP, the interactive media unit of Major League Baseball, to be the online ticket reseller for MLB.com, the central Internet clearinghouse for pro baseball.

StubHub, a unit of online auctioneer eBay Inc., has emerged as the online leader in the resale of sports tickets, once a gray market business controlled by scalpers outside ballparks.

Terms of the agreement were not disclosed.

Major League Baseball, the biggest single sports market for StubHub, represents the first professional sports league to strike an exclusive online resale deal with StubHub.

Each year, 75 million tickets are sold to Major League Baseball games, one third of which are bought online. An estimated $10 billion worth of baseball tickets are resold online and offline each year.

"This is the final vindication for the secondary ticketing market," StubHub spokesman Sean Pate said. "That really puts the final stamp of approval on StubHub," he said.

By contrast, two pro football teams -- the New England Patriots and Denver Broncos -- have banned ticket reselling by fans and revoked privileges for some season ticket holders.

The contract poses a setback to ticketing giant TicketMaster, a unit of IAC/InterActiveCorp which dominates the market for first-round ticket sales. It stands to lose ticket resale deals with individual teams to StubHub.

TicketMaster or its subsidiaries continue to have individual deals with roughly half of the league's 30 times for season tickets or other first-round ticket purchases.

A PIECE OF THE ACTION

StubHub connects buyers and sellers of sports or concert tickets and charges a fraction of the closing price of the transaction to each party. Tickets may be sold either for a fixed price or via auction mode. StubHub acts as an intermediary to deliver tickets to buyers ahead of the game.

To date, the company has built its business as an independent marketplace for second-hand tickets by connecting individual fans through its site at www.stubhub.com.

For example, ahead of any local San Francisco Giants game, several thousand tickets typically change hands through buyers and sellers on StubHub. A similar number of tickets are resold on the Giants official site via its existing secondary market.

Roughly 25 of pro baseball's 30 teams offer some form of ticket reselling through their Web sites. Other unofficial resale avenues include Craigslist, eBay auctions and local newspapers, along with primary ticketers like Ticketmaster.

"Having a robust secondary market will also help our primary ticket market and get more fans into the park," Kenny Gersh, senior vice president of business development for MLB Advanced Media said in a phone interview.

The deal is effective immediately, with links to StubHub's site and joint, co-branded promotions on MLB.com.

Full integration of StubHub into MLB.com and each of the official team sites will occur for the 2008 baseball season.

Individual franchises have the option not to participate with StubHub, but the deal between professional baseball and StubHub is exclusive and teams cannot resell tickets online through alternative means, Gersh said.

Pate underscored that both StubHub and MLB.com are committed to allowing fans to resell their unused tickets freely through other forums. "Both parties believe in an open and free and fan-friendly market," the StubHub spokesman said.