The World Cup is two weeks away.
Thursday brought a few interesting stories:
- FIFA released a new batch of tickets. Thousands for each match.
- SBJ shared a story with On Location’s CEO talking about the number of tickets On Location has “allocated” to premium packages.
- Mainstream media organizations have been reporting about the fall in prices on the secondary market.
This is what a game of chicken looks like.
A structural standoff where the people with tickets thought they’d be able to get football fans to pay anything to see “the biggest World Cup ever.”
All they had to do was wait.
Now, two weeks before the matches begin…it looks more and more like fans are going to say, “No.”
FIFA made a bet.
“This is the World Cup. We can charge anything. Americans will pay it. Federations and traveling supporters have to be here. Sponsors will send their people. Premium buyers are an endless resource.”
That was the Siren’s song.
FIFA sang it. On Location sang it.
Cities, states, and the federal government hummed along.
Hotels saw cash.
“Windfall profits for everyone!”
“The Biggest World Cup ever” couldn’t fail. The demand would materialize.
Seats would fill. Hotels would too.
The money would flow.
The reality?
Thousands of tickets per match released by FIFA on a Thursday, fourteen days before the tournament kicks off.
FIFA
FIFA’s approach to selling tickets has been a mix of manufactured urgency and “slow ticketing.”
Staggered on-sale windows.
Prices set well above what the market will bear.
A steady drumbeat of press releases yelling about record demand.
Each new “limited release” is framed as an opportunity. But it is really a signal that FIFA isn’t on the level with fans.
A simple game: create an illusion of scarcity mixed with desperation. Hope the market catches up.
Each on-sale shows cracks in the illusion.
Thousands of new tickets released on Thursday.
State Attorneys Generals issuing subpoenas…too little, too late.
A game of chicken is being played between FIFA and the public. But the public isn’t swerving.
On Location
On Location says it has “allocated” more than 500,000 hospitality packages for the World Cup.
“Allocated” is doing some heavy lifting.
“Allocated” doesn’t mean sold.
What is a package?
How many tickets to a package?
Are these just the tickets that FIFA “allocated” to On Location as part of their hospitality deal?
Do these “allocated” tickets have a home?
Or, are they sitting on a manifest of unsold inventory dressed up for the press hit?
We don’t know.
There are tells visible.
Individual suite seats with cheap refreshments are available starting at $600…including some refreshments.
Premium stripped down to a seat, a soda, and a bag of chips.
That’s not a curated hospitality experience. That’s a clearance sale.
Think of the Paris Olympics.
A $252 million loss. $86 million in unsold tickets written down.
TKO’s CFO called it a “loss-making event.”
But watching the company and the secondary market, you see a pattern:
- Protect the premium narrative.
- Sell the incredible demand story.
- Delay the discount.
- Dump inventory onto the secondary market late.
#PaysToWait
On Location seems to be betting that this time is different. That the demand for premium hospitality will magically appear at the last moment.
The early signals suggest: not so much.
The Secondary Market
In America, the secondary market can act as a release valve.
We see the stories about the number going through the roof, but the flip side is when primary sales stall, brokers can step in and move inventory.
Adjust prices.
Help the market find the right level.
FIFA broke that valve.
In an effort to capture every cent of “leakage” and then some, FIFA has created its own resale platform.
This acts as a mirror, showing FIFA exactly what they want to see:
- Big fees on sales.
- High prices.
- A way to keep the unprecedented demand story alive.
The result is that the secondary market can’t act as a release valve. It is more of a pressure cooker.
I’ve dug, I’ve seen signs of distress showing:
- Civilians cold calling brokers, trying to sell their tickets.
- Brokers trolling consumer facing sites for tickets to fill orders they spec sold.
- Instant transfer tickets at a point when FIFA hasn’t released tickets to buyers who purchased through their public on-sale.
The myth of the secondary market as a “free market” is cracking. There is nothing free about what is going on…just quiet chaos and uncertainty.
Between now and kickoff, you’ll see blocks of tickets surface on the secondary market.
They’ll likely come from four sources:
- Regular buyers trying to offload their seats.
- FIFA, quietly moving tickets onto the secondary market to liquidate unsold inventory.
- On Location releasing unsold “hospitality” tickets.
- Broker partners that have bought bulk inventory.
A Collapse?
Here’s what happens when a game of chicken ends badly.
FIFA loses.
“The Greatest Show on Earth” narrative shatters.
The only hope is that the matches steal attention from this story.
And, a hope there’s one host nation that doesn’t mind being a sucker to host the World Cup.
On Location loses.
Another major event goes poorly.
The Paris Olympics “loss-making event” gets a sequel. The “allocated” language is a tougher sell the next time.
The pattern becomes the reputation.
The United States loses. The co-host nation that bet on a tourism windfall gets bad press, empty hotel rooms, and a global audience witnessing American dysfunction in real time.
The fans lose.
Those who paid full price watch as tickets fall, and they are made to feel like suckers for buying early.
Other fans who might have gone stay home.
Tourists and national fans who might have traveled to the United States, Canada, or Mexico to see their team?
Not this time.
Stadiums have empty seats. The World Cup “atmosphere” that makes the event magic: not this time.
Cities lose.
They expected a tourism event. And, they appear to be getting what some hosts have called “a non-event.”
Hotels jacked up rates, expecting a bonanza.
Prices are falling. No reservations in the system.
Womp. Womp.
The only winner…any last minute opportunists.
The Extraction Economy overplayed its hand.
The consequences will be distributed across the entire ecosystem.
A Lesson. A Warning.
The Extraction Economy business model works perfectly…until it doesn’t.
No warning.
Things just break.
The Extraction Economy model delivers record revenue, huge allocation numbers, record whatever…
Then…poof.
Once it breaks, you can’t fix it in the near term.
The trust is gone. The demand is gone.
Recovery is measured in years. Not quarters.
This isn’t a problem for FIFA. The next World Cup is already scheduled…a new set of nations to take advantage of.
The lesson here is that everyone got greedy. Everyone believed the Siren’s song.
Fans: the ones everyone assumed would just spend, no matter what…are saying no.
This game of chicken won’t have a winner.
Only survivors.
For an event that should be a celebration…that’s pretty sad.
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