Yoonew

» see yoonew.com as it lived, on the wayback machine

~ the goodbye ~

Gerry Wilson could not afford a 2003 World Series ticket, and instead of accepting that he worked out why the price was so high. A championship seat is only worth its enormous number once the teams are known, and before that it is worth much less, because most of the teams anyone might buy for will not get there. So he built a market in the earlier, cheaper version of that ticket, and he and Hagos Mehreteab launched it out of MIT Sloan as Yoonew in September 2004 from New York.

The instrument was called a fantasy seat. In October you paid a modest sum for a contract on a team, and if that team reached its championship the contract turned into an actual ticket in your hand. If the team lost along the way you had nothing, which is exactly how a derivative works and exactly how it felt when it happened. Prices moved all season as teams won and lost, so the whole thing behaved like a small, loud exchange with football and baseball as the underlying asset.

It covered the Super Bowl and the World Series, and it stretched into hockey and college basketball as it grew. The press liked it, business school competitions liked it, and Forbes wrote it up in 2005 under a headline about Final Four tickets at eighty percent off. It raised around two million dollars. Wilson had liquidated his own retirement account earlier to cover obligations the company could not otherwise meet, which turned out to be a preview.

None of this was ever going to travel to where I was sitting. The product depends on caring intensely which two teams reach a final in sports played seriously in one country, and on a secondary ticket market with prices worth hedging against. Turkish football has neither. The league's top of the table is settled by the same Istanbul clubs with dull regularity, and the ticket you wanted was bought at a kombine price or not at all. Yoonew's math would have worked here. Its audience would not have.

~ the chronicle ~

~ the two things that went wrong ~

A rival called FirstDIBZ sued over patents, and defending that took money Yoonew did not really have. The heavier blow came from the credit card plumbing. The bank that ran Yoonew's merchant account went under during the financial crisis while holding deposits from customer purchases, and those deposits never reached the company. Yoonew had sold contracts and had no cash behind them.

That is the failure mode nobody buying a fantasy seat had priced in. Customers understood they were betting on a team. What they had not been asked to consider was whether the exchange itself would still be solvent in February, and no clause in the contract covered it.

~ the last phone calls ~

On 31 January 2010 the company called its customers individually and told them the Super Bowl tickets they held contracts for would not arrive. The game was on 7 February. Operations ceased the following day, 1 February 2010, and the site went with them.

More than a year later, in March 2011, TicketNews reported that some former customers were still waiting to be paid for orders that were never filled. The number was small, which is another way of saying that most people wrote it off.

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