UP388 The Ticket Market Doesn't Work - Will Labour Regulation Make It Better?

Everyone agrees the current sports ticketing market doesn't work. It rips off fans, is vulnerable to touts and is an inefficient way to manage supply and demand.
But is regulation the answer?
Labour will cap the resale prices of tickets and regulate resale platforms if the party wins the next general election, Sir Keir Starmer said recently. The plans will clamp down on ticket touts who rip off music and sports fans going to live events, Sir Keir said.
 The party says it will address ticket touting – buying up tickets to sell on at inflated profits – by capping resale prices and giving the Competition and Markets Authority (CMA) powers to regulate resale platforms. 
A strong pre-election soundbite, after all who doesn't want cheaper tickets.
This podcast discusses the second level implications of regulation and uses it as a way in to assess the problem with the ticket market, one of the key pillars of sports revenue generation and asset value. 
Our guests are Simon Bazalgette and Matt Drew.
Simon was chief executive of The Jockey Club during a long career across sport and music industries, and now chairs investment and advisory business called Global Venue Services.
Matt leads on overseas development for Viagogo/Stubhub, the secondary ticket marketplace, having held senior roles at Perform, DAZN, OPTA and WWE. 

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Transcript

0:00

Hello, and welcome to Unofficial part of the sports business podcast. I'm Richard Gillis today. We're talking about tickets. One of the most emotive and controversial areas in the sports business. So vital for rights holders in terms of revenue generation, the labor party is going to cap the resale prices of tickets and regulate resale platforms. If the party wins the next general election secure Starmer. Mama said recently. The plans will clamp down on ticket touts who rip off music and sports fans go into live events. He said, And the party says it will address ticket touting by capping resale prices and giving the competition and markets or authority powers to regulate the resale platforms. So, so strong pre-election soundbite and who doesn't like cheaper tickets, but let's talk about the second level implications of regulation. And see if there's any unforeseen consequences.

Matt Drew viagogo: 0:47

the most significant thing that would happen is that the 300 million pound unregulated underground existing market for Premier League tickets. Would be revenue that flowed back to the clubs, in a way that it, that it frankly should there's evidence, very clearly is that, on social media in particular, there is a thriving trade in Premier League tickets. And it's a big problem

1:10

Our guests are Simon basil jet and Matt drew. Simon was chief executive of the jockey club. During a long career across sport and music industries and our chairs, investment and advisory business, global venue services. And Matt leads on overseas development for via Gogo StubHub, as it's known in the U S. The secondary ticketing marketplace having held senior roles at performed a zone Opta and WW II.

UP: 1:35

Unofficial Partner is the leading podcast for the business of sport, a mix of entertaining and thought provoking conversations. With the who's who of the global industry? To join our community of tens of thousands of people. Sign up to the weekly Unofficial Partner newsletter and follow us on Twitter and Tik TOK. At Unofficial Partner. I'm going to just ask both of you just to introduce yourselves. Okay, so we'll start with Simon. Hello.

Simon Bazalgette: 2:10

Hello. My name is Simon Bazalgette. I chair a specialist investment, sports and advisory business called GVS. But previously I've worked in horse racing, football, world athletics, and, and the music business.

UP: 2:24

Okay, and Matt, same question really.

Matt Drew viagogo: 2:27

Hi folks. I'm Matt Drew. I oversee business development for Viagogo. That's part of the StubHub group. Viagogo is the international brand. That's a regulated ticket marketplace in 195 countries with 125 million users. And we get people access to live events that they wish to go to. Before that I was at WWE and DAZN and PERFORM and OPTA.

UP: 2:47

So you've both been around the houses, it's fair to say. And we're going to talk about tickets. And I quite often say this, that I think tickets is one of the bits of the sports business conversation, which is quite revealing. And I think it's for lots of different reasons of the sports organizations themselves, their relationship with their own audiences. And Periodically, we have rows about, obviously everyone wants cheaper tickets, rather than more expensive tickets. That's, you know, fairly obvious. Government occasionally gets involved and where we look like we're at one of those moments and we're going to use that as a hook into the I'm just going to start by reading a recent report and it's on BBC. Keir Starmer vows to cap resale music and sport ticket prices. So Keir Starmer is a lot of people's bet for the next prime minister of Great Britain as leader of the Labour Party. an Arsenal fan. won't hold that against him at this point. So this is the story. Labour will cap resale price of tickets and regulate resale platforms if the party wins the next general election, Sir Keir Starmer has said. The plans will clamp down on ticket touts who rip off music and fans going to live events, Keir said. He also set out ambitions to boost the arts, adding that Tories thought working people don't need culture. So there's a we'll, we'll Pass on that last bit because that's sort of going off the point, but it looks like, regulation of the sports ticket marketplace in some form. I'm just going to ask both of you your first response to that story before we go any further. So Matt, let's start with you. what's your general position in relation to this? I can see that here's a politician coming into an election and I'm hearing this. I'm thinking. Oh, this sounds good. What's your view?

Matt Drew viagogo: 4:41

Yeah, well, I think the, the point is it's, it's well intentioned as you described before, you know, ticketing is an interesting subject. It's about balancing fan access And, you know, the, the revenue return for people who are putting on the events as, as rights holders. So the idea and the intention behind, you know, making that a fruitful environment is of course, you know, positive. But the, issue here around the cat, which, you know, as you said, is I guess the, the headline grabbing part of that announcement. It is the bit that I think there's ample evidence is, is problematic. know, you've got to remember this is already a very highly regulated space. And as part of the kind of build of that regulation in the space, there's been a number of reviews that have directly addressed price caps, you know, the competition and markets authority. There's a report called the Waterson report, which looked at the space and is really the kind of governing document for, for legislators on the space. Both of those reports have said the price caps don't work. What they do is create a significant unregulated underground market, which is something that as sports fans we're probably sadly all too familiar with. And the evidence for that being a real thing is all around us. I think just last week, or even this week, in fact, you know, there was a report from Lloyds Bank around Taylor Swift tickets and a million pounds worth of fraud from people who have been pushed to try and buy those on social media platforms, you know, and that's caused significant problems. And, you know, you can almost follow this story as Taylor Swift has moved around the world because there was a very similar problem in Australia. So I think there's, there's ample evidence that price caps are very problematic. And I think even from a common sense point of view, to be honest, I mean, you ask yourself what is most likely to provide the best consumer experience and reduce fraud. Yeah, is it a kind of artificial cat that pushes people to an unregulated market? Or is it a tech solution that has built in consumer protection is already regulated and is really trying to build something that over a period of time will balance that kind of consumer need and rights holder benefit.

UP: 6:48

There's a few things in there, which I'll come back to. Simon, again, your just initial response to the story. You can see where this is heading, this conversation, but just give us your two pence to kick us off.

Simon Bazalgette: 7:00

I think it's always an easy headline to say you're going to Make sure that people pay less for things, whatever that might be. And I suspect that that's where, where this came from originally. Because as Matt says, the evidence for what a price cap would actually achieve is not there, in fact, it would be counterproductive, but really I'm coming from the point of view, particularly having run the Jockey Club, which runs three of the most attended sports events, top 10 sports events in the country and the Grand National, the Derby and Cheltenham Festival is As soon as you try and restrict resale in any way you, you cause all kinds of problems for, not least for consumers. And I was often getting approached by people who'd bought tickets, you know, nine months, a year ahead and couldn't use them. And what could they do with them? And the more you restrict their ability to, to move them on and get, so that they get to recover something for that, the worst experience you get, what you really need is is fair. Equitable marketplace and system, which is more joined up with the primary market, secondary and primary which gives the consumers the ability to either sell if they need to or, or buy if they weren't able to buy at the right time. And if, if they pay a higher price and they're willing to do so, that shouldn't be a problem. And we shouldn't also forget that if you try and cap The secondary prices, you've got a potential issue in the primary market because you know, I know as selling tickets for those events, we would try and maximize the amount that we would sell those to. We would, we would certainly allow members and big fans, key fans get a better price. The primary market wants to maximize its return on these projects as well. And so, so a price cap in one part of the market is undoubtedly going to have an effect in other parts of the market as well. So it would make much more sense to have a joined up approach to make sure that you have a properly regulated market, the consumers are protected and that you have, a good supply of both buyers and sellers because in the end that's going to produce the most economically valued price.

UP: 9:05

So that line between the primary and the secondary Marketplace, I think is, is interesting because, there's a bit in here about economics does the market work effectively is the question at the moment. So Matt, do you think when you're looking at this dispassionately, if you can, from where you are, what's wrong just from a purely marketplace perspective? perspective. What's wrong with the market as it stands?

Matt Drew viagogo: 9:28

Well, I think you go back and you think about what rights holders are trying to achieve. And this is across kind of all sectors, but it is very evident in sport as well. You know, they're trying to fill their stadia, create the best possible atmosphere be fair and reasonable to what, you know, I guess, unfortunately, we have to call legacy fans or something of that nature. But at the same time, really kind of grow and develop their business, build out an important revenue line, which I would argue is becoming even more and more important. And yeah, some of those components are slightly contradictory and then in addition to that, I think quite honestly, this has been a space that has been very underdeveloped for a period of time, while the focus has been on sports media rights and sponsorship revenues and things like this ticketing has kind of been left well alone, quite frankly. And it hasn't been a priority. I mean, don't get me wrong. There's people working smartly and diligently in the space, but what is clear is that it's increasingly important to them as they think about how they're going to operate successfully, grow revenues. You know, over the next generation and I think as, you know, for example, football has evolved, you know, you look at what the Premier League is now as a global sporting spectacle, you look at international fans travelling in, Spurs, your team is a good example of that. It's finding that balance in what is a very evolving world that has become a challenge. And I think that sometimes the response to that has been somewhat narrow in scope and it's perhaps the wrong problem that people have been trying to tackle. Yeah, there's been a degree to which people are sort of trying to ring fence the environment. And kind of, control everything themselves directly and manage everything internally and in house. And I think that hasn't necessarily solved the problem. The thing that we as a business are very interested in doing and quite frankly supporting by way of sort of beginning to participate much more in the rights holder economy is to answer the question, how do you balance the requirements of the kind of modern sporting economy? And in a world where stadium development event revenue managing a global fan base, all of these things are inherently tied together and really It's one of the biggest challenges for major rights holders over the next generation. We want to be in a position to help that. And we believe we have the assets, tools and technology to do that.

UP: 11:45

That secondary marketplace. So if I'm Spurs, for argument's sake, and I'm selling tickets. it's probably a bad example because actually probably most Premier League games are going to be at capacity or whatever. But I'm just trying to get to where you sit. So Virgogo quite often gets the blame for this, which I find interesting. And I don't know where, whether that's valid or not. if I'm Bruce Springsteen or Taylor Swift, or if I am Daniel Levy, which is a, you know, you don't often hear those three names in the same sentence. So well done us. I want to appear popular with my local audience. I want, with my audience, I want to be the good guy, whoever I am, but I also want to take as much money from your pocket as I can per ticket. That's the business reality of both of those. So, reputation wise, you're an easy hit. Okay, this is, this is the markets, the via go go stub hub of this world. They're the bad guys here. That's a comms challenge for you, isn't it? I guess.

Matt Drew viagogo: 12:43

Yeah, it is. I mean, first of all, that's one heck of a dinner party you just described. Second, yeah, it's a comms challenge. And, and, and then third, you know, I think I mean, you've had Chris on this podcast before, I think he said on that one, you know, there are, There are things the business has done historically that they wouldn't necessarily do again. So, yeah there is a natural evolution of our business. Yeah, there was a, there was a, a merge of our the Viegogo business and the StubHub business in, in 2020. And I think that, yeah, where the overall enterprise now is a very interesting spot and really is allowing us to begin to tackle some of those challenges that we talked about before and you just described that rights holders have. What clearly no one is saying is you want a ticket marketplace where kind of all the tickets go to the highest bidder and that's how the world of, you know, football or rugby or cricket or whatever it may be in sport works. That's not part of it, you know, there's an integral part of the, again, the Premier League quite frankly is the best example of this, Of Premier League football, which is about the stadium, the atmosphere, you know, the club. It's, it's why that international fan wants to come. It's not just the on field product, it's the whole environment I think we saw with the greatest respect to, to seia. I think that's one of the reasons why perhaps that's less of a popular league than it used to be because some of the. Atmosphere around it, with certain exceptions, there are some stadiums that are phenomenal places to go and visit, but that's perhaps falling off a little bit as a general rule. You have to maintain that. There's a new, more nuanced question here, which is about balance, and how do you balance the various push pull factors, you know, as between the need for, frankly, constant revenue growth, I mean with the, with the PSR regulations or PSRs in football at the moment, you constantly have to be going, growing your revenue profile because you need to go and buy that new centre forward in January. I think most fans understand that dynamic. So it's, as I said, it's about balancing those two things. I mean, when Spurs were at White Hart Lane, they were playing in front of 40, 000 people. Now they're playing in front of 60, 000 people. You know, there is greater popularity for the team and the sport. There's also more tickets available. What is a fair allocation of those? How should they be sold as between primary and secondary? Should someone who wasn't at the ticket on sale in July still have the chance to go to a game that November even though they weren't, you know able to secure one that first time round? should the, you know, Ange Postocoglu was talking the other day in a press conference about the guy who spent 5, 000 coming to Korea for a game, you know, how do you cater for that person? From our point of view, we think we as a business are very well set to market to that group to provide access to that group and help facilitate a better environment for that group. And dare I say, there is a good chance that that group is one which is more highly monetizable for the club. That person may be prepared to pay a more premium price for the ticket. And I don't think there's any problem with the club for all the reasons that we just described in terms of their own revenue growth profile. And, you know, that dinner party we just mentioned, I'm sure Daniel Levy would make the point he's in the business of maximizing revenues. I think Taylor Swift is as well, by the way. And, you know, I think Bruce Springsteen is as well, by the way. But the, the fact of the matter is there is clearly a balance that can be achieved. We don't think we're there yet. We think rights holders are leaving money on the table. And yeah, we think we can be part of the solution as we move through the next phase of our own business growth.

UP: 16:12

Simon, what do you think about that balance? It's a good point, and part of it is reputation, but through the eyes of the rights holder, when you are looking out at this question, Matt makes a good point about that balance between, profit maximization, you've got legacy fans, you've got international fans, potential growth. What do you, just take us inside that process.

Simon Bazalgette: 16:36

And I would say, you know, bums on seats. I mean, we're assuming here that everything we're talking about is a sold out event, but that's, that's actually a minority of the things which are, you know, the events that are put on. And actually part of the art is, is pricing down to get people to get the bums on seats. You don't want to have a small number of high paying people. You want a mix. in the, in the, the stadium or, or wherever it might be, the venue of people at a whole range of different levels. And I think one area that you have seen more of is a bit more price differentiation about how, how the experience and what you get from your seat to, to allow precisely that, to allow a certain level of lower price seats, but also to try and maximize the, The pricing, but I think the problem that the sector really suffers from is a lack of transparency. I think there's an assumption that the everything on the secondary market must be a tout and in fact, you know, there's all kinds of reasons why there are tickets on the secondary market and and you know what Venues are very unwilling to be clear about is sometimes they use them as a way of dynamic pricing. Because they do want to maximize yield quite often, but they're not willing really to be upfront about it. And therefore, I think you put it very well, the, the via go go's of the world. Become the place where they can effectively use it, but without telling people that they are, make it make it look like they're on the side of the, the fan who wants cheap tickets. Well, you know, they're not always, and they don't want to say that. So I think there's a lack of clarity around all of that. I think having a more joined up approach, properly regulated, the consumer protected, so they know they're buying real tickets when they, when they want them. But equally that they, they do have an opportunity to buy tickets. You know, after the initial release even if they have to pay more if they're willing to do that, if they're not willing to do it, then those tickets won't be sold, so there is a market here which can be used, but nobody's being forced to buy tickets they don't want to buy, at the price they don't want to buy, and the most efficient way is to have clear and transparent ways for people to do it, if you buy it early, You can get them cheaper if you've got, if you are a proven fan. As a Brentford fan, I'm not sure. I'd wanna be called a Heritage, A Heritage fan. But

UP: 18:51

I like proven fan. That's quite, it's got a

Simon Bazalgette: 18:53

we still have a big future ahead of us as well. I'm a future fan as well as a heritage fan. But it is important in sport as it is in music to be seen to be trying to help your fans, but that doesn't mean you want every single one that's a fan to get cheap tickets, even if actually they could afford and be willing to pay more. It's a very dynamic, You know, and getting more dynamic system. And I think price capping is not the solution. Price capping is a blunt instrument, which will, will cause the kind of problems that Matt was talking about. Actually more transparency, more joining up, more clarity and, and protection for the consumer. So regulation is important in this. That, that's the solution and we're still some way of that from that because I think the way this is always presented is, is really not very accurate.

UP: 19:39

there's a bit of me that thinks of the petrol market. You know, when you have those conversations about all the petrol prices are going up and then the cost of oil plummets and the petrol prices don't come down with it. And there's always a conversation that, you know, on the today program where you get some oil bloke on saying, well, you know, it's a very sticky marketplace. It doesn't respond in that way. There's a bit of me that thinks of tickets in that way. I don't know., why they don't come down quickly, to respond to money, if that, that's what an efficient market should do, what's stopping that? Is that just people in putting in place that we're not going to sell at that level or below that level?

Matt Drew viagogo: 20:15

Well, I think that's, that's not always the case and perhaps that's something that, again, we might be in a position to kind of help advise or show. I mean, non sports example, but if you wanted to go and see Beyonce at Tottenham Hotspur Stadium last year, you could have done for, I think it was 23 on the day. You know, to Simon's point, there's a big focus in what has historically been the VirgoGo space and the StubHub space, you know, and that, as I said, the business is growing and evolving, but what's historically been the space on the higher priced items and so on and so forth, you know, it's a relative minority of the whole thing, and quite frankly, like any marketplace, you know, if someone's on there, They can list the ticket at any price. If it's out, no one's forcing anyone to buy it. If it's particularly egregiously high, no one will, but again, sometimes that's a convenient headline. And I think this whole point around, you know, what is the actual profile of tickets on our platform and other platforms more generally? Yeah. One of the use cases for us, we believe is, you know, if you are, You know, a major European football league and, you know, you might be looking at your, your media rights profile and thinking, well, this might be a bit flat if we can build a profile in this particular country by virtue of, you know, being more visible there, having more fans visit from that territory, you know, we can grow both direct ticketing revenues from people come to watch our games, but we can also grow a profile and in time grow our kind of media sponsor and other commercial revenues from that space. The most obvious example being the U. S., which, you know, I think it's fair to say there's a bit of a kind of effort from all the major European leagues to really grow in. Yeah, that's an area where we can help tremendously. You know, the StubHub platform in the U. S., the reach of it is astronomical. I think I mentioned before between the two platforms, there's 50 million tickets listed at any given time. There are often underutilizations of those, those stadiums. You know, as we mentioned, less so in the Premier League for all the obvious reasons, but in most other events, there is underutilization. And that underutilization and those tickets can be marketed into a specific territory. So if you are you know, a La Liga club and you want to broadcast and, and build demand in the U. S., you You can readily do that. You know, these are tools, characteristics and strategies that I think in any other revenue stream of the sports economy, people are doing consistently. I mean, you've had a number of experts on, on the podcast before talking about kind of localized strategies for international development. You know, what that looks like in the digital environment with social and fan engagement with all of these things. I think one of the big messages or thoughts that we have is that. This is an integral part of that overall operation. And I think historically, it hasn't necessarily been thought of in that way because as I, as I said earlier, I think ticketing has kind of been thought of as a bit of a kind of quiet operational function. Yeah, it's pretty clear to us that there are a number of factors that mean that that really ought to change.

UP: 23:18

Well, let's, let's push that onto Simon, because I think there's an interesting thing here about what this bit of the conversation about tickets and, the money that, that rights holders need from match day and, All of that. And it gets to the investor lens onto sport, because when you see here private equity people or, people who are working for the money and they're looking at the next 10 years of sport valuations, one question is, the media rights landscape. Okay, we'll park that, but there's questions about whether that's just going to carry on in the same way upwards as it's been for the last 20 odd years. And a lot of people are saying no, it's not, or not in, not in a uniform way. And then you get to, okay, well, this new stadium we need to build, this new ground we need to, to build, where are we going to get it, get the money from? We're going to secure this against future revenue. And then they land on tickets. So the price of the ticket is absolutely wrapped into how people are valuing the sort of asset value of, of sport. What do you think about that? Because again, that's a structural lever in this conversation that has to be growing that number.

Simon Bazalgette: 24:39

Absolutely. And becoming more and more important. And clearly, nobody's investing on the basis that revenues are going to go down. But in the media world, I think as you, as you, as you say, I don't, I don't think anybody's particularly bullish about media revenues and some of the associated commercial revenues that go with that. I think it's much more about building a, a, a fan base, whatever that means, and ticketing has got to be a big part of that. Now, some of those will be, some of the fan base will be in other parts of the world where they won't be coming to games, but you want to give them the opportunity but ticketing is going to be part of that mix and you need to, you want to maximize your revenues from that within certain parameters. Now, I think any sensible sports owner, as with the music, will be thinking, how do I make sure I'm trying to treat, you know, real fans, however you want to call them, properly, so that they feel they're getting a fair deal. That's absolutely got to be part of the equation. And I would say, You know, we haven't seen many owners in the Premier League think taking that part into into account. I think there's a, you know, I think there's a lack of understanding of owners in football in the UK and sure in other parts of the world that what they're buying is in some, to some extent, a community asset and they need to think about the fan base for that. So you need to actually be more sophisticated on the ticketing side to deal with that because that's not something that will happen if you just leave it on its own. So I think thinking about these kind of matters, how do I create a system where I feel like fans, A, that I understand who the real fans are, That B, I'm making sure they get tickets at a reasonable price, which is, which is, by the way, the point of failure of a lot of the problems that people talk about. It's not in the secondary market. It's in the primary market where people are able to get hold of tickets, which, for which they're not really qualified to, to get. And primary ticketing has, has failed miserably to, to manage that. One way, by the way, to manage that is to have a better understanding from secondary market who's trading on the secondary market because that will tell you to some extent who are the real fans and who aren't as well. So, so joining this all up makes sense, but more importantly, what it allows you to do is build a much more efficient economic model of what the ticketing side of revenues might be and to maximize that, but in a way which meets certain criteria about how you're going to protect fans. I think that's the challenge. that investors have and which I have to say I see very few of them really trying to grapple with.

UP: 27:15

so again, just using Spurs as a, as a, an obvious Starting point, but they have their own ticketing secondary marketplace. If you, you know, if you can't go, if you're a season ticket holder, don't have it, don't go to a game. There is a process by which you can bung it in and try and get someone to pay for it, et cetera. The big question I think for Viagogo and the secondary market is your relationship to the big rights holders and how that's going to evolve. And again, we get a lot of people on the podcast coming on and talking about the direct to fan question. And. The data, fan data question. And we don't know our own fans. So the question is, do you know Spurs fans better than Spurs? Is that a realistic point to make? If that is the case, how does that relationship develop? If I'm Spurs or if I'm any other Premier League club or any, or if I'm, you know, a major event, Are you a viable sort of in house white label service that I can bung on top of my service? You can, I can personalize this to an extent, but I can see that actually there's value there. You can take the headache away and the cost of me having to build something in house, which is considerable. What I get back is what? Fan day? You tell me about my own fans? Is that how it's going to work?

Matt Drew viagogo: 28:33

Well, first of all, I don't think we'd make as bold a claim as, you know, we know more than Spurs or any other club, but we certainly have a considerable amount of information that the fan data and so on that they don't, that quite frankly we want to be able to share because we want to be a part of that rights holder economy. I think historically the business hasn't always been in that position, but it's certainly the aspiration because we see this as being such a significant inflection point. You know, for the industry and for ticketing as a part of the overall environment. There's this slightly absurd situation at the moment where there is revenue that is being created outside of the kind of clubs control or anything of that nature. That isn't being returned to them and historically one of the issues with the secondary market is that revenue hasn't been returned to clubs and that fan data and transaction data hasn't been able to be shared with clubs in a kind of GDPR appropriate way. Fundamentally that's what we're trying to change. That's part of this kind of next wave. And we, there are a number of ways we can do that. This is something that is a core part of the ecosystem in the U. S. already, you know, we work with, you know, the New York Yankees and the San Francisco Giants and the Milwaukee Bucks and all these people in a variety of different ways that really achieves those two goals. And, you know, I think people outside the U. S. or in the U. K. kind of, you know, Sports industry, you know, wouldn't always like to admit that, you know, essentially we take things from the US quite so gratuitously we do, but the fact is that we usually do. So we think this is certainly the kind of the journey that we're on. And then you get to the other part of your question about, you know, how should people be doing this? And I think. Yeah, we keep talking about the Premier League and I want to underline that's because it's the most obvious and convenient example, but there's an application here for all sports, you know, football, rugby, cricket, whatever it may be and they all have particular, you know, needs and, and, and structural things that need to be tackled. People can build things in house. Historically, that hasn't worked that well. And I think it's fair to say that some of the problems we've talked about here, or, you know, maybe a more positive way of saying it, you know, some of the revenue growth profile that we think we can identify and contribute to would not be delivered by having something that was, you know, Own, controlled and run in house. I mean, as I mentioned before, I was lucky enough to be part of the growth and development of DAZN. So, yeah, saw kind of firsthand how OTT and streaming developed. And I think there are a lot of rights holders that thought, this is fantastic. I can build and control something myself. That's going to give me these fan relationships and I can monetize them and it's going to kind of exponentially grow. I think what people realize is the scalability of that is quite limited. It leaves a lot of things kind of on the outside. And the kind of the cost base escalates quite quickly, you know, the marketing part of it being one example of that. And as a result, a lot of people now in that space that are looking at licensing in or going on to, you know, As I mentioned before, going onto platforms like DAZN, I think it's a similar sort of story here. I mean, I talked at the top of this conversation about the size and scale of the StubHub and Viagogo business. I mean, there's 12 billion annual impressions on the platform. There's 125 million registered users. It's 195 countries and 49 languages and currencies and all of these sorts of things. That scale is something that we think rights holders should be in a position to leverage. Whether you know, it's domestically, whether it's internationally, whether it's a specifically targeted territory, All of these things. We think there are a number of interesting solutions and

UP: 32:15

Th tho those numbers though, are, are, I mean, very obviously, very impressive, but from an individual club's perspective, they're of limited interest, aren't they? They're, they, I can see the point you're making that there's a scale, you know, there, that you're a big beast in the, in the, in the secondary marketplace. But why does that, what sort of, why is that of use? To me, I'm a, I'm only interested in, my fan base or potential fan base.

Matt Drew viagogo: 32:39

I mean, most obviously I guess there's a portion of that those numbers, those impressions, those users that are related to Spurs or Bath Rugby or Surrey County Cricket Club or whatever it might be. So, yeah, clearly there's a proportion of that. But I think it also talks to the kind of underlying tech. And that's one of the other big parts of this, this conversation is that This is a technology led solution and platform, which is why it has the kind of capacity to build in some of the, the fail safes and you know, consumer protections that we talked about before and to work very efficiently. So, really, it's about, you know, supplying the benefit of, you know, nearly 20 years of technology development, you know, to, to rights holders in a way that I think, you know, advancing to would, Independently would take a ton of time. And then the other thing I would, I would kind of underline is, Yeah, our view and our vision is very much on what does this market look like in five years time? What does it need to be? What does it need to be as a consumer experience? What does it need to deliver to the rights holders? Yeah, we think we're probably somewhat unique in thinking that way and trying to build something that is going to provide the best possible solution for rights holders over that kind of time period. Yeah, that's an ongoing journey and an ongoing process, but we feel, we feel pretty strongly that there's a, a good solution for rights holder partners there.

UP: 34:02

Simon, there's a, there's a question that comes back. You know, Matt mentioned the OTT media question, you know, and then we've had other people on talking about Fanatics or Amazon as a, as a partner, you know, the retail question. It keeps coming back to, can the rights holders do it all? You know, there are lots of things that they could be, they could be an Amazon for, you know, for Spurs, or it could be a Netflix or a TikTok or whatever it is, but I keep coming back to what's the decision making process going to be as over the next decade when all these scenarios are presented to us, and they are a lot of Martech solutions in the same way as Matt was outlining that. So you've got a tech question. Do you build it in house? Would you, you know, do you buy it in or build it? There's a culture question, people. Do you need different people in the organization? But then it gets to a bigger question of actually, there's an opportunity cost thing here about, well, where do we spend our time and resources and money? What do we actually want to be? Is this something that realistically we should, should we just get on with being a football club, right? Being, being good at that. All those other, or being the Jockey Club, making great racing events and doing the Derby and making sure all of that works. All these other bits are, can be a distraction. It's interesting the OTT comparison.

Simon Bazalgette: 35:26

No, I think that's right. I mean, but, you know, give my own experience. I mean, I got into racing originally as the founding chairman of the media rights side of racing, a company is now called Racecourse Media Group. And we were one of the early. Adopters of online streaming. And it's got a a huge business model for racing, which way more than for other sports historically is, is partnering with betting operators to offer, offer, you know, live streaming of horse races. Now we looked at doing that ourselves, but in the end, you know, it was, it was just clearly better to work with somebody who was able to put the resources into that area, which was perform, which was in fact, a precursor of the zone. So, and partnered with them and, and, you know, that, that company fairly rapidly and still today, is streaming, putting over a billion streams a year out into the market and that's working very effectively. And, As you say, the media rights, people can focus on the commercial side of that rather than the technical side of that. They don't. It would've been very, I think, ineffective and it wouldn't have been able to distribute that level of content, which means it wouldn't have made as much money or continue to make as much money without it. I think equally there's lots of areas where, primarily clubs is a good example. they don't. Cooperate over very many things. they cooperate for the over media rights through the Premier League, but it seems extraordinary that everybody has their own separate ticketing system, when actually it would be more efficient if there was if there was more joined up. And, I know both as a fan and the season ticket holder, but I also know from talking to a number of Premier League clubs that there is a lot of dissatisfaction about how the ticket exchange. process works at each club because they all operate in their own vacuum. But inevitably, that means that they don't have the liquidity, they don't have access to the number of people, they're not capturing the people who might be willing to buy those tickets, let alone, I think, even the ones that, that are willing to sell them who they do know who they are, because they've got the, they bought the tickets in the first place. And actually the scale helps to make that much more efficient and to create more liquidity, which inevitably means better commercial result and probably a better result for the fans as well. So there's a lot being missed out on in this area.

UP: 37:40

Let's just take that because it's a really interesting point. What are the implications of Centralised ticketing at what would be a Premier League level. So you push this question into the, into the central body. What would happen? There's the efficiency question, but then there's a broader one as well. What would happen if that were the case, if that's the journey?

Matt Drew viagogo: 38:01

I guess that the most significant thing that would happen is that the 300 million pound unregulated underground existing market for Premier League tickets. Would be revenue that flowed back to the clubs, in a way that it, that it frankly should and I want to be very, very clear because the Premier League is a, is a very different beast in a number of respects, but there are regulations around sales of Premier League tickets that are there for good reasons as between home and away fans, and there are restrictions on how they are sold and certainly, you know, they're not on our platform for that, for that very reason. But what we do know there's evidence, very clearly is that, on social media in particular, there is a thriving trade in Premier League tickets. And it's a, it's a big problem. So, as I said, the fundamental change would be that that revenue would flow back into the kind of rights holder economy, and in this case, back to the Premier League.

UP: 38:50

Is that what the NFL does?

Matt Drew viagogo: 38:52

in terms of having a centralized system, well, no, I mean, frankly, on a franchise by franchise level in the US for all of the major leagues, they will generally have a primary partner and they will have a secondary resale partner. Oftentimes those two things will be completely integrated. But fundamentally the kind of output of that is if you want to buy a ticket for an event at any given time, you almost certainly can, and the variable will be cost, but then to our previous point about predicting core fan base, if you are a season ticket holder or a member or however it's set up, you know, at the start of the season, you'll have the ability to renew your season ticket, guarantee your tickets for all the games or, or whatever it may be. But, you know, consider that more generally as a kind of evolved integrated framework. And, you know, StubHub in the U. S. is an active participant in that. And there are, you know, many other, you know, ticketing businesses and players that are in that space. It's quite important, I think, to understand, like, just how stark the difference is between the U. S. as a market, and the UK and frankly other kind of non US territories. I mean don't get me wrong what I'm absolutely I think not saying is hey let's just take that and lift it over here because there's particular nuances and differences of course but what is clear in our belief is there is a framework that could be built that is at league level or at club level but I think it's better set up at league level that can be opt in or opt out for clubs as they as they see fit. But that can provide a kind of evolved and integrated solution makes sure that overwhelmingly all of the revenue that's generated from tickets comes back into the rights holders and those clubs, and that all of the fan data that is created, either by the initial point of sale, or when that ticket may be resold to someone else, or when that ticket is bought by someone overseas. is, is returned to the rights holder. And it would decimate the volumes of fraud and issues that, that fans have when they buy in an unregulated market. And, you know, in addition to that, it would, in our opinion, create this additional revenue generation engine, really, because you've got both the direct revenues that you're getting. And also the indirect revenues that would flow by being able to market to all of this, you know, increased volume of people that are now kind of in the camp, as it were.

UP: 41:16

I wonder what happens, Simon, in terms of the intangible bit. of this. You mentioned, I really love your phrase, the proven fan. And I'm going to ask Matt in a minute, whether or not there is a way that you can identify proven fans in your, you know, in amongst the data, but I'll just park that for a minute. But football is particular in that it is very tribal. And the reason Telly likes it is because it's tribal, in the stadium, I can see a sort of scenario where you centralize the ticketing process and actually you start to dial down the tribalism. I can see it being much more of a big eventer type audience where, you know, it's like me at a rugby game. I go along. I don't give a toss. He wins, loses. I just go along and it's. Perfectly nice, but I'm not emotionally engaged, particularly. What do you think about that? How that, how do you, so football, there's the, there's price, there's proven fans, real fans, plastic fans, foreign fans, international fans, wherever we have over the, you know, the very distinctions that we use. And then you've also got the atmosphere bit. And you mentioned there earlier, Matt, about Serie A and that, you know, you can see it in various sports and various bits of the world where that's gone away. Or they would love to have the tribalism of, without the fighting and the, nonsense, but there is something there that needs to be protected. And I think that, that you could easily lose it, I think. What do you think?

Simon Bazalgette: 42:44

I mean, there's no doubt the tribalism in football in particular, but also, you know, we see it in cricket and rugby in particular is a really important part of the atmosphere. But a lot of it comes back. And the truth is that the way the tech is out there now, there are lots of ways you can do that, including with AI, where there are AI models, which can look at the behavior of fans, if it has enough data available, and can pretty accurately tell whether somebody is a real fan or not. That all exists. The truth is sport is not really using technology. The, that to the level it could be. And equally, it doesn't necessarily have the data available to do it, which you would get from a more joined up ticketing market where you'd actually have more understanding of what people are doing in the market. And you could therefore assess whether they're really a fan or not. You know, they, if they've signed up as a membership, if membership is very easy, then you think they're a fan, but if you knew they were busy buying and selling tickets for lots of other clubs, you You, you pretty quickly work out that they weren't equally, somebody may not be a member. They may not have signed up, but actually if they're, if you see they're only ever buying tickets for one club, you know, then you might know that they're more likely to be a fan. So there's, there's a lot, I think this is still a very, you know, early stage in the market around. Data understanding and understanding fans and engaging them, all of which could help do that much more efficiently and, and make sure that the revenues are, you know, stronger as well and support the revenues for the club. So I think it all, I think it all goes together

UP: 44:14

We could set up one of those tests of proven fandom. You could, you'd have to answer a questionnaire of like Brentford's history and You know, the various minutiae of being a fan. And then you can, it's like a nationality test.

Simon Bazalgette: 44:25

Yeah. Well, I think, I think I I'd have a fair chance of passing, but yeah, so I was going to say like the nationality test where you, think, you know, huge amount and suddenly they start asking. You know, complicated questions and you finally fail, fail the test. I think that's a pretty blunt instrument.

UP: 44:37

I think a good, a good tell before I move on is, is can you name every, I'm not asking you this now, but can you name every shirt sponsor the team's ever had? So can you, and go back in time. That's quite a good marker. Cause people when they start to say, I'm a, I'm a such and such fan. And then

Simon Bazalgette: 44:53

Yes. Well, maybe, maybe we'll play that one. We'll play that one after we finished the podcast.

Matt Drew viagogo: 44:59

We don't have that in our data set, unfortunately. I mean, we could ask people whether they thought Steve Sedgley was better than Vinny Samways, and yeah, yeah, maybe that's a test. But to your point before about, you know, can we identify quote unquote proven fans? I don't think that's our job. What we can do is deliver the data back to the clubs and rights holders so they can figure it out. There's a lot of work that those folks are doing in terms of identifying fan cohorts. You know, I think Wimbledon is a great example of this. I mean, as is typically the case, they're a little bit ahead of the market in many respects. Yeah, they know their fan cohorts inside out. There is the capability for us to provide them more information they can use to do that even more. Is there a fan cohort they're not aware of? Because that person is buying exclusively on a different marketplace. Yeah, that's information we think we can provide that would be beneficial to these folks. And the other point I would make around fan atmosphere is, As I said a couple of times, we focus on the Premier League of football because it's such an obvious thing to talk about, but in other sports, the inverse can be true. I mean, you think about the Rugby World Cup last time and the way the draw went and people got knocked out and all of that sort of thing, or people came second in the group instead of first in an unexpected way. In knockout competitions, that can cause huge problems, because all of a sudden, if you're the Ireland fan that thought you were going to be playing in the Premier League, Marseille, but actually you're in Paris and like if you've bought the tickets eight months prior on a platform and you can't resell them other than at face value, you unfortunately get a situation where, excuse me, you, you might have a ground with hundreds of empty seats or you might have a ground where, you know, Ireland are playing New Zealand and there's, you know, 10, 000 French fans in there that don't necessarily want to be there. Those sorts of things happen quite frequently in tournaments and in knockout events. You think of tennis. if you want to go and watch, you know, Roger Federer or, or Alcaraz and, you know, something in the drawer goes quirkily wrong, you, you might be there on the wrong day. You know, it's, there's so much dynamism here that actually, There is a way to structure this with rights holders that delivers the balance that we talked about at the start of this conversation. You know, we're not talking here about the entirety of the market. We completely understand that the bit that we're in is a proportion of it. The question really is how do you leverage and utilize that proportion of the market in the most effective way. And I guess the fundamental change or evolution that we want to be part of is doing that better, you know, and that's both, as we've said a couple of times, that's delivering revenue back to rights holders at a time when they need it, and then perhaps even more interestingly, developing fan data that they can leverage and use across all of their their business is in an interesting way.

UP: 47:50

So how, how big a year, so you've got, you know, the Euros and the Olympics taking place in Germany and Paris, you know, in Paris over the summer. How big a deal is that for Viagogo? What's the relationship between the secondary markets and those types of mega events?

Matt Drew viagogo: 48:06

I think so. Like, I mean, every event is significant for us. You know, a little bit like we started out talking about the top of this call. There are certain events that are controlled by the organizer in a very particular way. And we're sort of very respectful about how that is kind of set up. So kind of not all of them are ones that we can actively participate in, in the way that we would wish, which really is kind of part of what we're now trying to achieve. We want to broaden that church of things that we can actively engage in. But quite frankly, it's the same as kind of any year. There's always a consistent stream of major sports events. where we can be an active participant and we can kind of aid that that journey. 2024 is, is no different for the reasons that you, you just described. But kind of the, the bigger goal for us is, as we've been talking about, find a way to kind of put these, these things together and in a way that we can make it even bigger for both for us and for the rights holder partners that we, we might be working with.

UP: 49:05

Okay, listen, fascinating as ever and loads of stuff that we'll we'll pick up on. But in the meantime, Matt Drew, Simon Bazalgette, thanks very much for your time.

Matt Drew viagogo: 49:14

Thank you.