OptionIt, a Portland, Ore.-based company launched in July, allows fans to pay in advance for the right to buy tickets, leaving it to them to decide later whether to exercise the option and buy the ticket at face value or sell the option.
OptionIt, which is currently seeking about $5 million in venture funding, splits the proceeds from the options, as well as the fees charged to buyers and sellers of the options, evenly with its clients, which include the National Hockey League’s San Jose Sharks and the National Basketball Association’s Boston Celtics.
“Teams are challenged because they can’t really raise prices to reflect the true demand,” CEO Mark Mastalir told Reuters.
“It’s not fan friendly, it’s not media friendly,” he said, adding that his service allows them to capture some of the revenue they lose to the secondary market.
Before the company has even raised any VC financing, Mastalir said he could see OptionIt eventually acquired by Ticketmaster or Live Nation, as a viable exit option down the line.
Mastalir said the pro sports market has built-in limits because season tickets typically make up the bulk of available tickets, and Major League Baseball’s exclusive deal with resale site StubHub precludes OptionIt from signing contracts with pro baseball teams.
So the company has set its eyes on the concert business.
“That’s our next frontier,” he said, adding that the company was in discussions with artist management companies and bands such as British rockers The Who, which is planning a U.S. tour next summer. —Phil Wahba, Reuters