Why have Duco auctioned Parker v Takam tickets; what does it mean for fans?

PETER MEECHAM/stuff.co.nz

Duco Events has decided to auction off all the general admission tickets to the Joseph Parker v Carlos Takam boxing match. Thomas Manch looks at why they've done this, what it means for Parker fans and sport in New Zealand.

In a seemingly unprecedented free-market move, Duco Events has put boxing fans in the ring, asking them to fight it out for a seat at the much hyped Joseph Parker v Carlos Takam event by way of auction.

"You'd never get the New Zealand Rugby Union doing what we're doing because they'd see it as too controversial," said Dean Lonergan, Duco Events partner.

Dean Lonergan, Martin Snedden and David Higgins of Duco Events.
ANDREW CORNAGA / PHOTOSPORT

Dean Lonergan, Martin Snedden and David Higgins of Duco Events.

Auctioning the 520 general admission tickets for a $1 reserve on Trade Me is an idea he calls an "entertaining experiment in microeconomics", one that he thinks could change the way tickets are sold in the future.

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The "experiment"

"Lets just say we priced the tickets for 50 bucks each and sold out in two minutes, then all of a sudden the tickets start reappearing on Trade Me at $500 and you go, well that was a stupid move," Lonergan said.

Fans who want to see Joseph Parker fight, seen here at a media and training session, will have to participate in ticket ...
ANDREW CORNAGA/PHOTOSPORT

Fans who want to see Joseph Parker fight, seen here at a media and training session, will have to participate in ticket auctions held on Trade Me.

"So what we've done is effectively eliminated the secondary market."

Lonergan is referring to scalping, a legal but perennial problem for all event holders. 

If there's a short supply of tickets for a high demand event, and if the tickets are priced 'lower than the market will bear' (as in lower than the price consumers are willing to pay) there's a profit margin for scalpers to exploit. 

Scalpers are a problem Duco hasn't had to deal with before, they've been left with empty seats at previous Parker fights.

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This time round Duco has created an event with an intentionally low supply of tickets, just 520 general admission (not including the corporate tables) at the Vodafone Events Centre in Manukau, but with a high demand. 

So, in cutting out the middle man has Duco simply scalped the tickets themselves?

"No, we're not scalping them ourselves, what we're doing is letting the market set the rate," said Lonergan.

"What it says is we weren't sure what to price the tickets at," he said.

Letting the 'market decide' means it's up to fans to decide what the tickets are worth.

"An auction would be a good way for an auctioneer, a supplier, to get as much value for their product as possible," said Dr Yigit Saglam​, an economics lecturer at Victoria University Wellington.

Saglam​ wasn't familiar with Duco Events or boxing, but he knows about auctions.

"Auctions give some leverage to the supplier," he said, "people have to bid to get the item.. so you'll force them to pay as much as they're willing to pay."

But not without risk. 

On one hand, a fixed price could determine a greater level of revenue, said Saglam, but auctioning the tickets ensures that all the seats will be filled - even if it's for a $1 a seat.

The risk may have paid off, the fans have brought in at least $30,000 for Duco with the first 134 tickets selling for an average of $226 - albeit somewhat short of the $300 recommended retail price Duco offered up.

Disgruntled fans

It's "disgusting" to let everybody fight it out, says Dean Evans, owner of Boxing Central gym in Auckland.

"The saddest part is the fight is like in Joseph's backyard, and possibly none of those people will get to go and see it," he says, "they can't afford it, those guys out there haven't got money to start bidding, you know."

He pointed out that promoters of last year's Floyd Mayweather v Manny Pacquiao​ fight, "set a standard, they put the tickets out and if you can't afford it you don't come."

There's plenty of messages of support for Parker on Duco's Facebook page, 'Duco Boxing', but there are some dissenting voices.

 



Seutatia Tala, who tagged her post "#TeamParkerNotTeamDuco", had purchased flights and accommodation well in advance, only to be frustrated by the "scrap out" for tickets.

Another fan, Doors Hansen, commented: "so should the All Blacks auction the tickets for their games? ... pretty stink really."

Auctioning the All Blacks?

Lonergan might be right in saying that his "experiment" could be too controversial for the likes of the NZRFU, who declined to comment for this story.

Possibly because Duco has tried to achieve something that doesn't translate, ticket sales are a different game for other sport organisations.

"We could have been greedy last year and put the prices up $20 or $30," said Hurricanes CEO Avan Lee, but it didn't make sense for them to do so. 

Generally, he's concerned with filling 38,000-plus seats a game, not capitalising on a just 520 seats.

Matches such as last year's Super Rugby final, when tickets were scalped on Trade Me for hundreds of dollars over their retail prices, are the exception. 

With a high supply compared to demand, the Hurricane's potential secondary market has been small. 

That being said, they're "always open to looking at ways of increasing attendance," Lee added, "I don't really know what Duco are talking about but I'd be mad not to listen."

James Wear, general manager commercial at New Zealand Cricket, said ticket auctioning is not on the horizon for NZ Cricket. 

They've got their ticket prices "pretty well nailed down", with nine sold-out days of cricket last year.

"Duco [should] be applauded for doing this, it's great... they're always looking at different ways for selling and promoting their events," he said.

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