1. Given the role that “Mother Nature” plays in forecasting Super Bowl ticket prices, how might you adjust your expectations for ticket costs from year to year, given the location of the event?

2. Consider this case from an ethics perspective. Do you see anything “unethical” with large-block ticket holders hoarding their tickets as long as possible? Why or why not?

The 2015 Super Bowl between the New England Patriots and the Seattle Seahawks was a thrilling game that was decided in the final seconds. The relatively short duration of the game, however, contrasted sharply to the weeks of hype and preparation leading up to the contest between the two teams. Nowhere was the frenetic activity felt more than in the ticket sales, particularly the so-called secondary market, which includes organizations such as StubHub (San Francisco, CA), Ticketmaster Entertainment, Inc. (West Hollywood, CA), and Craigslist Inc. (San Francisco, CA). By the last week before the game, the NFL Ticket Exchange, the National Football League’s (New York City, NY) official re-sale website, had no tickets for less than  S$9,000. The cheapest seats on other sites were essentially the same. This skyrocketing escalation of prices far above face value for tickets took the NFL and other ticket brokers by surprise and led them to examine exactly what went wrong.

In general, every year there is a predictable arc to Super Bowl ticket prices on the secondary market. In the days leading up to the American Football Conference and National Football Conference championship games (to decide who will play in the Super Bowl), ticket prices tend to be high (perhaps three times the face value of the ticket). Once the conference championships have been decided and the Super Bowl opponents determined, brokers expect a price spike as supporters of the Super Bowl teams clamber for a chance to watch their team. Nevertheless, as Super Sunday approaches, a predictable drop in prices occurs as brokers and sellers look to avoid being stuck with unsold tickets and cut prices to sell off their remaining stock.

One challenge for predicting ticket prices comes with determining the teams who make it to the final game. For example, predictions for ticket prices for the 2015 Super Bowl were that they would be lower than usual because the two teams involved—Seattle and New England—had both been to the finals in recent years and it was assumed that their fans were likely feeling some “success fatigue” and a sense that the excitement had worn off.

Yet, in 2015, those predictions did not come true. In fact, not only did the ticket price drop that everyone was anticipating not occur, but prices continued to spiral upward as the days passed. Right after the conference championship games were over, tickets were selling for $1,900 to $2,900 (in U.S. dollars) a seat—extremely expensive, but nowhere near where they would end up. At the start of the week before the game, the average price per seat was $6,500 and the least expensive seats were going for $4,200. By Thursday, the cheapest price for a ticket was $7,100, while StubHub alerted the media that “the current average list price for the Super Bowl is $9,484.37, which is up 282.43% since last year at this time ($2,480.06).”

And that was for the sites that had tickets. StubHub listed fewer than 300 tickets available, and many of the secondary market sites were posting “no tickets available” announcements on their websites.

What were the forces that caused this completely unanticipated rise in prices and lack of tickets for sale? First, the game was being held indoors. Having a controlled environment is much less risky than playing a football game in early February throughout much of the northern United States. In fact, when Meadowlands Stadium in East Rutherford, New Jersey, hosted the Super Bowl in 2014, rumors of heavy snow and bitter cold helped keep average ticket prices to about $2,500, with several thousand available for purchase through the week before the game. In the case of the Seattle–New England game, the causes of the skyrocketing ticket prices may have been a result of people more than anything else; that is, StubHub accused a handful of large ticket sellers in control of most of the Super Bowl ticket inventory of colluding with each other to manipulate ticket prices, keeping them artificially high while funneling only small numbers onto the secondary market. In this way, they were able to influence supply and subsequent demand for the tickets, pushing prices out of reach for the average football fan.

Even though sports fans were left without tickets, it was the ticket brokers themselves who took the biggest loss. Brokers commonly buy up large blocks of tickets on spec, under the assumption that they can realize profits from the difference between their purchase prices and the price rise they expect to occur. In this case, the going price in the marketplace was much higher than they anticipated, leading to a “short squeeze.” That is, because colluders kept a lid on available seats, brokers were forced to pay maximum price for tickets and then hustle to sell them, often for a reduced price, in the days right before the game.

The failure to forecast ticket prices accurately led to a few insiders making high profits, while saddling the majority of ticket brokers with stinging losses.