Specialist
Former VP, Partnerships at Vivid Seats LLC
Agenda
- Vivid Seats' operating environment – novel coronavirus pandemic's impact on primary and secondary marketplaces
- Impact of sports season timing and music cycles on ability to recover demand
- Fixed vs variable costs and potential cost-out options
- Outlook for 2020 and beyond – downside scenarios and strategic optionality
Questions
1.
How is the novel coronavirus pandemic impacting the various aspects of the US ticketing marketplace? Which areas of the industry are most under pressure vs more insulated as we consider the wider implications?
2.
How are you differentiating why one peer in the industry might be better positioned vs others to weather the coronavirus pandemic?
3.
Does the secondary market control a much larger portion of gate receipts for the overall industry than the primary? How does that compare to two years ago?
4.
How does seasonality play into the ticketing segment? How would you differentiate between sports and music, respective lead times of consumers buying tickets across the various events? Does a significant portion of business typically occur in Q1 and Q2?
5.
What allows secondary to sell so much faster? Are tickets sold without the actual rights? Why is the secondary able to start selling tickets ahead of primary?
6.
How far in advance are professional resellers, the secondaries, paying the rights holders? Is it set in stone that the NFL [National Football League] gets money from Vivid, Ticketmaster and StubHub at a certain time of the year? What does that mean for cancelled events in 2020?
7.
How varied are players’ ticket portfolios and who is regionally exposed to the coronavirus hotspots?
8.
What are the trends across cancelling vs postponing events? How are secondary resellers thinking about no action vs full refund vs credit vouchers? Is there much flexibility in handling customer engagement so that the snap-back recovery is at the pace hoped for?
9.
Are you expecting consumers to select the refund option? Presumably it will vary across the events and smaller events could take a harder line around refunds. What would you expect for the Masters vs an Ultra Festival? Would events with extensive PR need to give the consumer the option and would you expect most consumers to want a refund, to the point that secondary marketplaces have a significant cash outflow over the upcoming weeks and months?
10.
What is the likelihood of lowering the total inventory on tickets already sold, and how would it impact players? Do primary vendors keep their entire inventory? How would Vivid Seats deal with having its ticket inventory reduced by half, but consumers not asking for a refund? Would ticket holders be forced off events? That would appear to complicate things.
11.
Could you outline the dynamics involved where certain resellers are over-indexed? Which events are Vivid Seats, Ticketmaster, StubHub and other big names more exposed to? Would they be more cash-strapped due to the events facing the most pressure until normality resumes?
12.
You mentioned there are 10-15 brokers, such as Dynasty Sports & Entertainment, DTI and Eventellect. Why might some be more prone to insolvency? What could be the impact on various secondary players if certain brokers go out of business?
13.
Do you think the sports teams would ever support the brokers to keep them chugging along? You indicated how secondary might only represent 10-20% of ticketing. Will that matter to teams, especially if stadium occupancy is not 100% early on?
14.
Will it the brokers largely have to deal with getting cash back due to cancelled events? How are you assessing the quality of event insurance? I’m aware there’s a difference between infectious disease and the force majeure clause. Are you expecting force majeure to hold its own in getting money back?
15.
Would Vivid Seats expect more cash outflows vs inflows, based on events cancelling?
16.
How is Vivid Seats positioned relative to peers? Is it exposed to threats or opportunities that others aren’t? Which core parts of the business model would you want to focus on?
17.
What are your thoughts on Ticketmaster? Does its relationship with Live Nation help insulate it more? You described Ticketmaster’s position in the ecosystem as a bit unique.
18.
Does the percentage of tickets sold on a season or annual pass basis ultimately move the needle for top lines? Do you have any concerns about the retention falling post crisis, and does that cause ticket sales to be a little more volatile for the next 12-18 months?
19.
Does the overall ability to snap back quickly differ for sports season cycles and music? How would you compare the MLB’s [Major League Baseball’s] potential to be a condensed season vs the NBA [National Basketball Association] vs concert venue renting for various artists? How complicated will it be once venues reopen and events progress?
20.
How does uncertainty about the likelihood of concerts playing in October impact the necessary lead times to sell tickets and get full capacity? Will occupancy for those events be lower due to a knock-on effect?
21.
How might assets and liabilities move back and forth over the next two months for secondary players? Who gets money back throughout the system? Do you expect more cash outflows vs inflows for Vivid, Ticketmaster, StubHub and SeatGeek, at least until seasons and events return?
22.
How are you thinking about pricing generally, once things kick back in? What is the potential impact of pent-up demand and forced capacity constraints on the pricing environment? If stadium occupancy for NFL games is condensed for regulatory reasons, could price be adjusted to mitigate that?
23.
Do you expect the take rate that secondary vendors typically get to shift significantly? Does negotiating leverage play for or against their favour, based on the coronavirus crisis?
24.
How much of the cost structure in Vivid Seats’ business model is variable? Are you expecting headcount reductions or will general costs be stripped out? How do you expect the business to maintain margins as much as possible?
25.
Who are the likely consolidators and who might be some attractive take-out targets, if the coronavirus pandemic drives further industry consolidation?
26.
Do you have any closing remarks about Vivid Seats or the ticketing marketplace?
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