Why are Super Bowl tickets so expensive? Inside the world of NFL pricing, luxury packages and cash-toting ticket brokers.

Nicolas Koo was hesitant about buying tickets to see his beloved San Francisco 49ers play. 2024 super bowl.

The lifelong fan has watched every 49ers playoff game for the past two years; This year’s ticket prices was No comparison to any football game Historically, they averaged more than $12,000 on some resale sites last week.

a few days ago big event On Sunday, Koo wasn’t sure if he would be able to attend the Super Bowl in person.

In January, Koo asked a Facebook group of other 49ers fans for “tips on the best and most affordable way to buy Super Bowl tickets.” The flood of over 100 responses symbolized a known truth about the big game. That means it’s nearly impossible for an average fan, or even a wealthy fan, to attend the Super Bowl.

Face value tickets are expensive to begin with and are rarely available to the public.

It wasn’t like this before. But ticket industry experts say a series of business decisions the NFL has made in recent years to distribute coveted tickets have sent prices through the roof, putting them out of reach for most fans. It is said that it has become moderate.

Due to design, there is no room

“It’s a total mystery how I can participate without having to refinance my house to buy tickets,” Khoo said.

That’s by design, said Stephen Shapiro, associate dean of the University of South Carolina’s School of Sports and Entertainment Management.

Some tickets are distributed to NFL teams or sold at face value to players, coaches, and others involved in the sport. Other awards will go to the league’s corporate sponsors and partners, including CBS parent company Paramount Global. (CBS broadcast the game; it was also broadcast on Nickelodeon and streamed on Paramount+.) Then, another batch of tickets went to an event company called On Location Experiences, which was founded by the NFL in 2010. It will be sent.

“It’s not usually available to the public,” Shapiro said. “Teams have tickets they can sell to season ticket holders, but even that is a lottery system. And tickets are heavily discussed between sponsors and hospitality and other corporate partnerships.”

This year, the larger venue size further increased operating costs.attendance Allegiant Stadium in Las Vegas Approximately 60,000 people were expected to attend, making it the smallest Super Bowl in history. By comparison, about 68,000 fans attended the 2023 game in Glendale, Arizona, and about 70,000 fans attended the year before in Inglewood, California.

Face value ticket prices typically range from $950 for “nosebleed” seats to $9,500 for seats directly behind the team, overlooking the 50-yard line. That’s a fraction of what Super Bowl tickets were selling for online.

Other buyers will have to settle for secondary market sites like StubHub and SeatGeek. Ticket Brokers — People who make a living buying and selling tickets. Or you can enjoy high-end packages from On Location, the NFL’s “Official Hospitality Partner.”

Package prices listed on On Location’s website ranged from about $7,000 to more than $60,000.

The NFL did not respond to emailed questions. A spokesperson for On Location declined to comment.

NFL Investment Vehicles Related to Gaming

More than a dozen ticket brokers, sports management experts, academics and lawyers contacted by CBS News said the current structure makes it difficult for fans to access and raises costs.

“Why does a $4,500 ticket become a $14,000 ticket?” asked one frustrated ticket broker. He agreed to speak to CBS News anonymously because he still has business with the league.

“It’s greed, just greed,” he said.

They point to On Location, which is allocated at least 11,000 tickets each year, as the culprit behind the astronomical prices, according to ticket brokers and other sources familiar with NFL dealings. did.

Before On Location’s rise to prominence, ticket brokers were sometimes selling Super Bowl seats for just a few hundred dollars off face value, and some were arranging flights and hotels for fans to attend.

Another ticket broker told CBS News, “In many cases, we were making more than $50 or $100 more than the face value of the ticket, but we were happy.”

NFL executives established an equity fund called 32 Equity in 2013 to invest in companies and deals on behalf of the team, according to PitchBook, which tracks venture capital investments. According to Global Corporate Ventures, Forbes magazine’s 24th Annual NFL Team Review reported that its investments brought the average net worth of all 32 NFL teams to $3.48 billion. 32 Equity is a private fund, so it does not have to disclose its finances.

32 Equity typically invests in companies that work with the league, including NFL data provider Genius Sports, former NFL star Tom Brady’s brand TB12, athlete recovery equipment company Hyperice, and software companies Appetize, Skillz, and Strivr. Front Office Sports reported. .

The company invested in and acquired On Location in 2015, according to PitchBook. On Location sells tickets as part of packages worth tens of thousands of dollars and includes perks such as unlimited food and beverages during the game, hotel accommodations, live entertainment before the game and what the company calls a “bucket list experience.” It is. Sources familiar with the pricing strategy told CBS News that hotel rooms and other amenities related to the Super Bowl have been booked months in advance, and the company is testing how long the market can hold out. It is said that they are setting high prices for this reason.

One major broker defended on-location pricing.

“They’re trying to price their products within fair market value,” said Ken Solkey, president of Las VegasTicket.com and past president of the National Association of Ticket Brokers. “It’s their party, it’s their ticket.”

Vicki Morwitz, a business professor at Columbia University, said ticket prices through resellers and brokers have fallen in the days leading up to the Super Bowl. He said these waves reflect the dynamic pricing model used by most ticket sellers, where prices rise and fall based on demand. This model is not necessarily popular with customers, she said, noting that complaints arise in other industries when high demand drives up prices.

“Uber and Lyft are letting supply and demand dictate how they set prices, but from the consumer’s perspective, the economic realities of supply and demand don’t always align with perceptions of fairness,” Morwitz said. said.

Sports marketing professor Shapiro said the combination of a reliable supply of tickets to sell and blocks of hotel rooms and other amenities creates an “on-location competitive advantage.” OnLocation is currently owned by Endeavor Group, a multi-billion dollar global company. A sports and entertainment company in which the NFL owners are a minority shareholder.

In January 2020, Endeavor Group Holdings acquired On Location in a $660 million deal, according to The Hollywood Reporter. NFL stock funds held 13.5% of the company’s stock, according to SEC filings.

Endeavor CEO Ariel Emanuel said in a statement at the time that the company is “advancing the way consumers and brands think about experiences that money can’t buy.”

In 2022, the NFL’s investment arm repurchased On Location’s stock. Executives exercised an option to take back nearly 40% of the company’s stock and promoted Super Bowl LVI as On Location’s “largest hospitality event in history,” according to an annual investor brochure filed with the SEC.

Two months later, On Location became a wholly owned subsidiary of Talent Agency, and the NFL owner’s stake in On Location was converted into Endeavor’s 1.5% ownership interest. The agency reported revenue of $1.344 billion in the final quarter of 2023.

Bags of cash and secret transactions on the secondary market

The NFL’s dominance of the Super Bowl ticket market has also affected the secondary ticket market.

Brokers who spoke to CBS News said it’s an open secret that players, coaches and other staff members receive and sell tickets.

A ticket broker called a CBS News reporter while driving in New York City and told him he had $85,000 in cash in his car to buy Super Bowl tickets from an NFL employee. CBS News agreed to remain anonymous so the ticket broker could provide details about how the intermediary system works.

Brokers said they often obtain tickets from people (players, coaches, event sponsors, agents, or their customers) who choose to take tickets at face value and sell them for a profit. Ta.

Many of these transactions are done in cash, and “it’s not unusual for someone to bring $1 million in cash” to a Super Bowl venue to buy tickets, the broker said.

As its own control over ticket sales grew, the NFL began to crack down on these sales. Employees are notified annually that they are prohibited from selling tickets.

“Coaches are scared,” one ticket broker said, and ticket sales are down, some brokers said.

The changes also had the effect of raising prices, brokers said.

“Inevitably tickets will move around, tickets will go down some path, and inevitably some of them will end up in the hands of a good broker like LasVegasTickets.com. Deaf,” Solky said.

Shapiro said the image of NFL officials making money from games is at odds with the NFL’s fan-friendly marketing.

”“From a public perception standpoint, I don’t think it’s good for the league for individuals affiliated with the league to buy tickets at face value and resell them for illegal profit,” Shapiro said.

Even with the “obscene” markup, Nicholas Khoo said he would still consider pulling the trigger.

“I’m in a position in life where I can afford to buy these tickets and go, considering how much it means to me. But for three hours of entertainment, it’s way too expensive,” Cù said.

“Only a few people have the means and the access,” Shapiro said. “We’re talking about the 1 percent who are leaving.”