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JockStocks: Could sports ticket options be the next big investment?

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It appears that the options market is now making its way into sports, thanks to a company called OptionIt. As we head into the National Hockey League (NHL) season, San Jose Sharks fans can reserve an option to buy postseason tickets.

The Sharks will serve as one of the company's key test markets, along with the Buffalo Bills, Baltimore Ravens, and St. Louis Rams (at least it appears this way according to the company's website) and it hopes to have 10 teams in the fold by the end of the year. With San Jose (a perennial preseason playoff favorite) as a test market, I envision success for OptionIt.

OptionIt usually will split both option prices and supplemental charges for the buyers equally with the teams. According to the article, the company uses a combination of Las Vegas odds and technology to calculate the option prices. I'm guessing that the option prices for the Baltimore Ravens will be higher than the St. Louis Rams, as the Rams have won all of five games in the past two years while the Ravens were in the AFC Championship Game. I'm guessing that (if this model is successful) I could reserve an option for Cincinnati Bengals' playoff tickets for roughly $10, which is an investment I would make. I mean, if the Bengals buck their 19-year trend and have a good season, I could sell the option to another fan for a higher price, then pocket my profit.

The company is not doing this to make money, at least in the first year. The company's business model should help keep scalpers from buying the options, as OptionIt is trying to keep the option prices 30% below the going rate on the secondary market. Furthermore, this business model could eliminate Ticketmaster (NASDAQ: TKTM) from the equation.

Earlier this year, a college study indicated that selling options for postseason tickets rather than using a lottery process could increase fan participation -- and I agree. When the Bengals made the playoffs a few years back, season-ticket holders had the first chance to purchase playoff tickets (to see a cheap shot from the Steelers end the Bengals' playoff run). The problem with the lottery system is that it makes the rich richer. Those who can afford season tickets are the ones that get to see the playoff game in person (which some don't want to do, I am more of a television watcher myself).

OptionIt makes sense, which means that the NFL will step in and stop this before it can gain legs. I envision OptionIt will find its niche in the NHL, as the arenas are smaller and playoff tickets may be in higher demand. Of course, I was able to attend a Columbus BlueJacket playoff game last year by purchasing the ticket through Ticketmaster. My question is, will the option price be less than the surcharges I received for going through Ticketmaster? If not, then it may not make sense for me to plunk down $25 for the option to purchase BlueJacket playoff tickets.

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Last updated: November 26, 2009: 12:21 AM

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