Fee Free Friday – London 2012

Fee Free Friday - London 2012

2012 olympics scandal

2012 Olympics Scandal

Is it the thrill of victory or the agony of defeat? The 2012 Olympics Scandal is here and the 18 month long soap opera surrounding tickets has only intensified. This week we add " Ticket Fatigue" to the lexicon of misery, find out if tickets are really sold out or if a glut is being covered up, and discover the 300% of face value "handling fee" is on the low end of the prices being paid. Strap yourself in, this bumpy ride is getting bumpier, not smoother!

"They got it so wrong"

It all started well and good enough in 2011 when the tickets for the 2012 Olympic games went on sale. They were beautifully designed, with lots of choices in events. Buyer confidence was high, even when purchasing internationally, since the UK has strict laws on event ticket re-sale.

Then a few cracks in the dam started to appear. There was talk of some events, like the opening ceremony, having a printed face value of $3,000.00 - surely that was just a rumor, and couldn't possibly be the case. Whispers of per ticket fees as high as $37.00 on a $25.00 ticket(!) may have been heard, but no one knew for sure since tickets could only be pre-reserved, not actually purchased.

Whispers and rumors materialized into facts when Martin Samuel of the DailyMail noted that when people attempted to reserve tickets, they learned funds had been taken, but no actual reservations were ever made:

What a crazy way to sell Olympic tickets! As 250,000 lose out, how 2012 organizers have got it so wrong. Why do they have to make it so hard? Why, in this country, do we have to turn even the simplest exercise into a study in soul-sapping tension? It can’t be that difficult, selling tickets. The people behind the glass at the local multiplex never look like they’re going home to split atoms in their spare time.

Fast forward to June 2012 when the mildly scandalous revelation broke that workers within the International Olympic Committee (IOC) had sold their tickets, thousands of them, on the black market for up to $9,430 each.

The Guardian UK's Owen Gibson wrote at the time:

27 representatives of 54 countries were prepared to break International Olympic Committee rules and sell thousands of tickets on the black market will not come as a big surprise to many. Certainly not to anyone who has observed the margins of major sporting events since the 1984 Los Angeles Games set the template for the modern era.

Of course any event in high demand comes with a certain percentage of issues...but are tickets for the games really in "high demand"?

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Ticket Fatigue

Since keeping tabs on the donnybrook surrounding event ticket fees is what we do here at Fee Free Friday, we have been taking notes as the games drawn near. Several times in the past, the IOC and the London Organizing Committee of the Olympic Games (Locog) have released statements updating us on the volume of tickets sold as well as which individual events have sold out.

Yet we have also noted actions on the part of the governing bodies and the official ticket outlets that contradict the "sold out" statements.

This week, after myriad reports of potential half empty stadiums were rife, Locog now has a million Olympic tickets in total still to sell, 650,000 of which are for soccer and 300,000 for other events, including the ceremonies. To address this glut, the tickets are being removed from the market by reducing the capacity at stadiums.

But why the revelations of low demand so late in the timeline? What happened to the "events are selling out" statements from earlier in the year?

Mark Perryman suggests that the events are spread out too far across the country, making it impractical for people, locals and international visitors alike, to attend multiple far flung events.

We agree with Perryman that the old real estate adage "location. location. location." does indeed apply to events, especially when the event is multi-session like the games.

Locale aside we cannot help but wonder what part per ticket fees played in this apparent sales shortcoming. Last week we noted that the all Olympic tickets sold through CoSport have included a $72 "handling fee" per ticket. That fee is the same no matter the face value. Without access to the data, we can only speculate that a 300% fee on a $25 ticket has at least contributed to the lack of sales.

If it's not location and it's not unreasonable tickets fees, then why haven't more tickets been sold?

Reuters brings the concept of "ticket fatigue" to the lexicon of woes in its speculation to weak sales.

London Olympic organisers were warned against embarking on a quick fire-sale of tickets ahead of next month's Games after the latest batch unusually failed to fly off the shelves, amid fears the British public had become weary of a controversial process. The combination of a complex and opaque online ticketing system which has appeared unable to cope with the huge demand and which seemed skewed towards those prepared to bid for thousands of pounds worth of tickets, has resulted in an increasingly wary public. About a quarter of the of 928,000 tickets made available last month have failed to sell.

There is still one week before the games begin, and this soap opera surround tickets will continue right up until the very last moment. Should there be another round of "corrections" and "market reduction" in the next seven days we will update this post.

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Printed face value of $3,158.50 each

Speaking of pricing, tickets to the games are not subject to consumer hostile scalping in the UK, as it is forbidden by law. Tickets to Olympic events can only be sold through licensed outlets, referred to as authorized ticket resellers (ATRs). The maximum fine for re-selling tickets in England is $50,000.00. per offense -- an envious regulation that is to consider from our perspective here in the U.S.

With the strict regulations in place, you can see that the prices for the opening ceremony can still be had for as little as $40. There are even reports of regular folks getting tickets at those reasonable face value prices. But we need to see all the prices, as printed onto the tickets in order to gauge how "reasonable" they are.

The official London 2012 ticket price sheet for each event mostly shows what one would expect, but there are a few eyebrow raisers - an example is the seats for the opening ceremony priced at $3,158.50 each. That amount was determined in early 2011 by AOC, the only entity allowed to profit from the games. We find that dollar amount a bit arbitrary given that it was decided upon 18 months from the start of the games.

As of this writing those three thousand dollar tickets have not yet all been sold. In fact the Olympic website has put a special section on the website to market the ultra premium seats as part of a "Prestige experience". The web site offers all inclusive packages that include inner-city and inner-venue transportation, exclusive VIP areas, as well as fine food and concessions.

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Families unable to sit together as a group.

Mary Pilon of the New York Times has some worrisome news that families and large groups wanting to experience the games together have been made miserable by some of the official outlets. The report says that tickets purchased together, end up being sporadic and far apart inside the venue.

Several readers who did receive their tickets, like the Dreibelbis family, said that they’re not grouped together, raising concerns among families traveling with young children. Some readers said their tickets were in separate sections, even with seats for infants.

Pilon goes on to say that others have no idea where their expensive ticket are because of an opaque and unclear tracking method.

Some of the fans who are upset because they have yet to receive their tickets for the London Games, or are unclear about where their tickets are. In some cases, thousands of dollars of tickets have been charged, with consumers not able to track the location of their tickets or not able to connect with CoSport customer service. Some will have to make their way to a will call booth to pick up their tickets instead of arriving with them in hand.

Knowing there was a  $72 "handling fee" pinned to each ticket, it is inexcusable to not provide a clear view of how the tickets are being handled.

Scalping, outrageous per ticket fees and unhappy patrons can be part of any event and the Olympics are not immune. We sincerely hope the ups and downs of this year and a half long drama surrounding the 2012 Olympics ends up being a forgotten footnote and that everyone in attendance has a rewarding, fun experience in London.

Your event can be plagued by many of the same issues as the Olympics, and you can actually take heart in knowing IOC's multi-billion dollar budget did not prevent the issues. It's not the event budget size that ensures a smooth running, profitable event - it's the savvy of the people that run the event. We are committed to helping all savvy venue owners and event organizers with the best online ticketing software and the most extensive options for charging fees.Should you charge per ticket fees?


Fee Free Friday will be back next week with all new trials and tribulation from the war on unreasonably high ticket fees. Until then, be sure to take a look at our features and sign up for a free trial today!