For bowl game ticket sales, ‘it’s all about the matchups’

After a college football regular season that saw fans make a triumphant return to stadiums nationwide, the sport now readies for a lineup of 42 bowl games beginning December 17.

On3 caught up with Robert Smith, the CEO of ticketing and technology company Event Dynamic, to discuss consumer demand for bowls, the challenges of navigating the pandemic and top-of-mind issues that are shaping the industry. Launched in spring of 2019, Dallas-based Event Dynamic became the first in the ticketing space to successfully use artificial intelligence technology to optimize ticket prices for live events in pursuit of maximizing revenue and increasing attendance.

The company has dozens of customers across pro and college sports, as well as seven bowl games. While confidentiality agreements with those customers, which include several national championship-winning college football and basketball teams, prohibit public disclosure, Smith addressed a host of issues from his vantage point on the frontlines of the industry. 

Q: What are you hearing about ticket demand overall for bowl games outside of the College Football Playoff?

Smith: It’s all about the matchups with these bowl games. For example, we have two teams that are outside the College Football Playoff games, one big name and a school that historically travels really well. And it is selling like hotcakes. Then there is another big game and it’s going terribly from a ticket-sales standpoint because they priced the tickets probably close to double. So people may have been willing to buy it, but as we know, if tickets are overpriced, people won’t go, and it is [expletive] going poorly and the schools know it. If you price things correctly, they sell. If you don’t, two things happen: You either overshoot it like that game and nobody’s buying it or, two, you underprice it. And then what happens when you underprice it, people that are opportunistic see an opportunity to make a buck. And they do, and you can’t blame them.

Q: If a lower-tier bowl game — one with a less-appealing matchup — wants you to help them sell tickets, what can you do to price them correctly to draw people to the venue?

Smith: The challenge for the bowl games is they are at a disadvantage. They probably priced them months ago, when they didn’t know what the matchup was going to be. And we know the surge in demand is after the games are announced. So the bowl game I mentioned earlier with the big name and the school that travels well, they are just crushing it. Well, they were [expletive] their pants two weeks ago because they weren’t selling a lot of tickets. Why? No one knew the matchup. The reason these bowl games don’t sell is you get a bad matchup and they don’t jump on it immediately and start moving their inventory. You have to get all over it, man. You can’t wait until the week before or you’re [expletive]. If you get a bad matchup, you have to pivot immediately. The minute you get your matchup, you need to make sure they are priced right so the people who are interested in buying them are buying them. 

Q: Take it back a few months when the college season opened. There was some trepidation among school officials about opening stadium gates at full capacity because of the Delta variant. Yet the need to generate revenue has never been greater. What was the prevailing sentiment in the industry that you noticed back in late summer?

Smith:  I’d heard a lot of that. I heard a lot of, “Do you think we’re going to be full capacity?” That’s when Delta was really ripping. From our clients, whether it’s college or pro, we never felt like any of it was in question. Like, it was all a foregone conclusion that they were going to be full capacity. It never felt in jeopardy.

Q: How did pent-up demand affect ticket prices this season?

Smith: When college football came back, unfortunately, the Delta variant was raging, so I don’t think there was a material pop in ticket prices. I do think we are seeing the buying activity increase through the year. 

Q: You talked with colleges before the pandemic. You talk to them now at this stage of the pandemic. How much more focus is now on finding new revenue streams?

Smith: Two or three years ago, I think there were revenue opportunities that were being [passed up on]. And universities kind of knew they were foregoing it. Like, “Hey, we’re gonna play in this neutral site, and we have this big allotment of inventory.” They offer to their donors and send back whatever they don’t use. Now, they are starting to ask the question, “Wait a second, what else can we do with this inventory?” They are starting to leverage it. There are big college events at neutral sites for basketball and football, and those tickets have a lot of value. There are ways to leverage that, whether that’s selling home plans or saying, “Hey, we’re going to throw our extra tickets on a platform like yours, and go sell them for whatever the market bears.” In some of those cases, there’s quite a gap in what face value is and what they’re able to sell them for in the open market. Two years ago, there were opportunities and folks (schools) who kind of just let it go knowing that they would be there. Now it’s, ‘Wait a second, we have to kick over every rock.’ They have to figure out where every piece of revenue can be grabbed.

Q: If I’m an athletic director at a school, how can Event Dynamic help me?

Smith: What our application does, it is AI-driven, automated, dynamic ticket pricing that is set to price tickets in a method that will either optimize for revenue, which is our default, or optimize for attendance for various events. Meaning, if you have a college basketball team, you may have five hearty home games, and you don’t want to leave a nickel on the table. But you may also have five games against softer opponents and just want to pack the house. So you can deploy whatever your goal is around ticketing and control your entire ecosystem. We are pricing all their tickets on the primary [market] and all their tickets on the secondary. It’s always in harmony or in lockstep with one another. There’s never competing goals. So it’s their inventory everywhere. They control the entire environment. They control the ticketing strategy. And they are given a dashboard where they can see everything in real time. 

Q: Why is artificial intelligence necessary to take into account all the variables you do in real time to price tickets?

Smith: It’s taking all these variables, it’s making predictions on what the price should be based on how many tickets it should be selling at those prices. And then, based on the actual results, it’s just constantly recalibrating, which is what makes it really special. I mean, in some cases, like for certain games, I mean, we’re making millions of price changes. And all that happens in the background. No human could do that.

Q: In college sports, when it comes to schools grasping why this pricing technology is valuable, how large is the gap between the most sophisticated schools and the least?

Smith: The people that say they’ll do it themselves don’t really know what that means. Our tech enables that person that wants to do it themselves. And believe it or not, there are multiple teams in baseball right now that are air quotes “doing it themselves” and they’re just not even doing it right. There is a team in the NFL that is just clunking its way through it. There is a group that gets it and a group that doesn’t get it. The gap is probably closing. … It’s comical sometimes. There is one pro team, a very well-respected team. Very well-respected. I love this guy, except he made a comment, “All teams in the league should be using this in the future. It’s amazing. Except for us, and here’s the reason.” It’s because there’s a resistance to change.

Q: You price tickets for live sporting events. When sports were shut down in March 2020, how did your company survive?

Smith: Trying to think of a nice way to say it — we just ate it. We burned a lot of cash. We didn’t lay anybody off. We chose to take that time to invest in the company and invest in the tech so that we were prepared when we came out of it. We kept building. It wasn’t easy, man. 

Q: How would you describe the tenor of the conversations in the space as we approach 2022?

Smith: COVID really feels like noise [in the industry]. I don’t feel like there’s a lot of meat to it anymore. I think you’re going to start to see volatility reduced. You’re not going to see these huge swings up and down. … Some of the other trends that we’ve seen in the market that really accelerated, I think every one of our clients now is mobile ticketing. The pandemic accelerated that. … I’m just glad we’re back.