A boutique private credit firm has its eyes on a lucrative trade ahead of the Fifa World Cup this summer: lending to an online platform that aims to flip tickets of sought-after football matches for large profits.
Eagle Point Credit Management has recently increased its $50mn financing package to Sports Illustrated Tickets — a sister company of the sports magazine — to help fund its plan to purchase World Cup tickets and resell them with huge mark-ups.
The profit potential has convinced Eagle Point to sign off the loan, which amounts to the total cost of the tickets, meaning that if Sports Illustrated buys $1mn worth of World Cup tickets, it would lend a full $1mn.
“Normally you would never lend at 100 per cent [loan-to-cost],” said Thomas Majewski, founder and managing partner of Connecticut-based Eagle Point, which manages $14bn in assets.
“But World Cup tickets are typically worth up to three times their face value, so the reality is that we are lending at a 35 per cent loan-to-value ratio.”
Investments in ticket resales typically yield returns in the mid-teens for lenders, which include New York-based investment firm Feenix Venture Partners, according to Eagle Point.
If Sports Illustrated Tickets fails to repay the loan, lenders could seize its assets, including millions of tickets to sports, concerts and theatrical performances worldwide.
“Of all the things I’m worried about, World Cup tickets selling below face value isn’t one of them,” Majewski said.
Fifa, football’s governing body, also makes a profit from the resale of World Cup tickets, getting a 15 per cent cut of the sale from both the buyer and the seller.
For example, a seat behind the goal at the US team’s opening game against Paraguay is currently listed on Fifa’s resale platform at $5,900, plus a fee to the governing body of $885. The ticket has a face value of $2,735.
High ticket prices at the tournament, which is being held across the US, Mexico and Canada, have led to an outcry from fans around the world as well as from politicians in the US.
New York City Mayor Zohran Mamdani and Los Angeles Mayor Karen Bass have both openly criticised Fifa’s decision to adopt dynamic pricing for ticket sales based on real-time demand.
Even at their original prices, tickets to the World Cup final — scheduled for July 19 in the MetLife Stadium in New Jersey — quickly sold for $4,000 to more than $10,000 on Fifa’s website.
“You’d have to mortgage your house to be able to afford that for a lot of people,” Mamdani said in an interview with CBS News.
Meanwhile, US hotels are slashing room rates on game days, as high ticket prices and anti-American sentiment are discouraging football fans from attending the matches.
Apart from the World Cup, Sports Illustrated Tickets also has “a diverse pool of underlying assets” ranging from K-pop shows to Billy Joel concerts, Majewski said.
Its most prized investments include concert tickets to South Korean boy band BTS, which can be sold at about four times the original value in the secondary market, Eagle Point estimates.
However, concert tickets could only be borrowed against at a lower advance rate because demand was less secure, Majewski said.
Sports Illustrated, a 72-year-old magazine most famous for its sports journalism, has in recent years expanded its revenue streams to include TV streaming, ticketing and branded events.
The ticketing business, which is separate to the editorial unit, describes itself as a “fan-first marketplace” and a “trusted source for unforgettable live experiences”. It secures tickets in part from sponsoring events and partnering with stadiums.
In September, it signed a 13-year deal with New York Red Bulls that will rebrand the soccer team’s home court in Harrison, New Jersey as “Sports Illustrated Stadium”. It will also be the official ticketing partner for all future events there, including a series of World Cup watch parties.
Still, the inflated price of World Cup tickets has deterred even well-heeled members of the Wall Street elite from attending the tournament.
“I logged in to see [tickets to] the World Cup finals selling for $20,000,” Majewski said. “So I did not buy one.”
Additional reporting by Josh Noble in London
