Buying a bowl chance? It's a Longhorn bull market(Austin American -Statesman)

11/15/2005

The price of faith in Vince Young and friends hit $425 on Friday afternoon.

Matt Leinart, Reggie Bush and Co. were fetching $448.

For Marcus Vick and his band of long shots, $99.

The University of Texas, the University of Southern California and Virginia Tech have emerged as the top college football teams, and that has made them the hottest commodities on an increasingly popular Internet market called TheTicketReserve.com.

Fans of those teams are paying top dollar on the site for rights to buy tickets to the Rose Bowl, which on Jan. 4 will decide the national championship. Meanwhile, speculators are busy buying and selling these ticket rights — contracts the site calls "forwards" — in hopes of making a profit.

If the Top 10 rankings aren't enough for you, the rising and falling prices could provide another gauge of which teams will make the Rose Bowl.

The site was founded by UT grad and Longhorns fan Rick Harmon, in part to give the everyday fan a chance to get seats at major sporting events worldwide. Harmon and his colleagues work with team owners and event organizers to reserve blocks of tickets, then sell forwards that link a specific team and a specific game — UT in the Rose Bowl, for example. If that team makes it to that game, those who own the forwards get to buy tickets at face value.

But there's a catch: If your team doesn't make the big game, you don't get a seat, and you lose your money. It's a market, after all; for every reward, there's a risk.

And it's a market as volatile as any other, gyrating as events change. There was plenty of gunslinging Oct. 29, for example. By the time the Longhorns fell to a 28-12 halftime deficit at Oklahoma State, the UT-Rose Bowl forwards had dropped more than $200. The price sprang back up when UT put up 35 unanswered points in the second half.

"There's a really fun and entertaining element to this," said Harmon, who graduated from UT in 1972 and got his MBA there in 1973. "That's really contrasted with the pain that's clearly out there among a lot of fans — the pain of not being able to go, (or) digging deep into your bank account for scalped tickets."

The Friday afternoon UT-Rose Bowl forward, plus a ticket's $175 face value, would total about $600. Alternatively, a fan could go through a ticket broker such as TicketCity.com, which was selling Rose Bowl seats for as little as $550 Friday.

Some UT fans and speculators jumped on the forwards much earlier and got them at $100, Harmon said, putting the package at $275 a ticket. For other Longhorn diehards — especially those who can't get one of the 22,000 tickets the Rose Bowl gives each school — TicketReserve's 1,250 guaranteed seats for each team could become rather tempting, even at current prices.

Harmon's firm, based near Chicago, runs markets for all the top college bowl games, as well as major events such as the Super Bowl and soccer's World Cup. The company doesn't disclose how many registered users it has, but Harmon said about 1,000 new customers sign up each day.

TicketReserve charges 10 percent on sellers' prices, and a 7 percent fee on buyers. Then it splits the revenue with the owners and organizers of the events. The company doesn't post advertising on its site yet, Harmon said, but it might consider that as another revenue stream in the future.

How closely does the market trading on Harmon's site reflect a team's chances of winning a bowl berth?

"If you have knowledgeable people, it should give you the odds of UT going to the Rose Bowl," said Andrew Whinston, a management professor at UT who researched similar "prediction" markets.

But the odds could be skewed if one team's fans bid more rabidly than another's. As Harmon put it, there are "minor differences in the rationality" from one team's market to the next.

Partly because of those team allegiances, TicketReserve's markets might not mirror opinions among sports fans at large, said Jerry Palm, the publisher of CollegeBCS.com, a popular Web site that tracks the college football rankings.

"With this, you only get a good idea of how people who found this Web site feel about these teams," he said.

Harmon has more faith in his customers. "If we launched a forward market (on tickets) to attend the next inaugural ball," he said, "I guarantee our market would tell you who's going to be the next president."

But setting odds was never TicketReserve's mission, he said. Harmon and his partners purchased the online market technology to create the site in 2001. One of their first ideas was starting a market that New York City drivers could use to reserve parking spots in busy midtown Manhattan.

They switched to the idea of sports tickets shortly thereafter, but they kept the same premise — taking a popular commodity and giving everyone a shot at it.

It can be a gamble, but it does give the common fan a chance to get seats for the most popular events. And sometimes, it rewards loyalty.

Early last fall, Harmon said, a Philadelphia Eagles fan paid $50 for a Super Bowl forward. By the time the Eagles nailed down their spot in the championship, those forwards were trading for $1,800.

With a chance to buy Super Bowl seats at face value, the fan sold the forward, made more than $1,700 and bought himself a big-screen TV instead.

"For his desires," Harmon said, "he was a big winner."