The Vancouver Canucks’ 2011 Stanley Cup run deep into June could not come at a better time for Vancouver ticket brokerages struggling to rebound from a recession that ravaged consumer discretionary spending.
In May, the world’s largest ticket broker, Live Nation Entertainment Inc. (NYSE:LYV), told investors to expect “flat organic ticket sales for 2011.”
Local ticket brokers, however, told Business in Vancouver that this year’s sales will be helped by hundreds of thousands of dollars in extra sales each thanks to the Canucks’ playoff run.
“We’re definitely looking at least at a 60% volume increase in sales over a span of two months, which is pretty good,” said Kingsley Bailey, who has operated Vancouver Ticket and Tour Service since 1995.
The top regular price for a ticket to see the Canucks lose to the Boston Bruins in Game 7 of the Stanley Cup final was $931 but Bailey sold some tickets to that game for $9,000 each.
It was a handsome reward for surviving in a business that endured rocky years thanks to what Bailey called “abysmal” performance from the hockey team, as well as the 2004-05 NHL players’ lockout.
Those adversities slammed his business given that about 50% of Bailey’s sales are for sports tickets in Vancouver. About 30% are for concerts and other Lower Mainland events. The remaining 20% comes from selling tickets for Seattle events, which are mostly sports.
In contrast, Live Nation, which bought ticketing giant Ticketmaster Entertainment for US$2.5 billion in 2010 and generated more than $5.06 billion in 2010 revenue, gets the following ticket sales:
- 57.7% from concerts;
- 17.3% from arts and theatre events; and
- 15.7% from sports matches.
Sports-related ticket sales, however, are the fastest-growing global segment for Live Nation, with sales up 14% in the first quarter of 2011 compared with the same quarter in 2010. That compares with a 4% increase in concert ticket revenue and a 3% hike in arts and theatre ticket sales during those same quarters.
Live Nation’s bottom line is also buffered by the fact that it has booking rights or an equity interest in 128 venues.
Bailey operates solely in Vancouver out of a small office in the Hampton Inn and Suites on Robson Street, where he first set up shop in 1996. He spent 1998 and 1999 working out of his home while the hotel was rebuilt and then returned to the Hampton in 2000.
He has considered expanding to a second city as long as he can keep operating costs low.
The largest Vancouver-based ticket broker is Mario Livich, whose Showtimetickets.com operates across North America.
Livich scalped concert tickets when he was in his teens and founded a ticket reselling venture in 1985 when he was a 20-year-old business student at Douglas College.
He operated out of his home for 10 years before moving to a 4,000-square-foot retail outlet on Beatty Street and focusing on building his American customer base.
He hit a peak of $9.4 million in 2005 and then spent three years on BIV’s top 100 fastest growing companies list:
- No. 26 in 2006 with a 208% revenue growth rate between 2000 and 2004;
- No. 31 in 2007 with a 390% five-year revenue growth rate between 2001 and 2005; and
- No. 87 in 2008 with a 150% five-year revenue growth rate between 2002 and 2006.
Livich no longer reveals revenue figures but said that he employed 30 people in 2008 before the economic downturn took hold. His employee count fell to 14 people in the depth of the recession and has since climbed above 20.
“We’re back on the growth curve again,” he said. “It’s been peaks and valleys. We’re somewhat cyclical with the nature of the industry and the recession. Tickets are a discretionary item.”
Canadian growth has recently been much stronger than in the U.S. Livich told BIV In 2006 that 60% of his revenue came from south of the border. Today, it’s the reverse, with 60% of his revenue coming from Canada.
“We connect buyers and sellers so we’re never sold out,” he said. “The only thing that changes is the price.”