Fredric D. Rosen doesn't seem like a man well connected to the entertainment industry. Athletes and entertainers, whose posters dot his walls, never visit his Mid-Wilshire offices in Los Angeles, and he spends most of his time encamped with telephones and computers.
But as chairman and chief executive of Ticketmaster Corp., the pugnacious Rosen has become a key part of the entertainment field by marketing a unique computerized ticketing service that has made his once nearly bankrupt company one of the largest such operations in the world.
Along the way, Rosen, 47, has dramatically affected the way many events--including sports and live concerts--are promoted. This month, for example, his firm begins hawking music videos along with some concert tickets. But the former corporate lawyer has also emerged as a controversial industry power broker--an entrepreneur who manages access to the best seats in the house, for a price.
"Fred Rosen is the type of individual who people feel very strongly about," said admirer Brian Murphy, president of Avalon Attractions, Southern California's largest concert promoter. "They either love him or hate him. But he's got the biggest ticket-selling operation in the country; the reality is you deal with him" because his system is so good.
But the system, which uses computers and 650 telephone sales agents to market tickets, has come under fire from some Washington state consumers and New York lawmakers who complain that Ticketmaster adds fees as high as 55% to the base price of a ticket and doesn't refund those fees when events are canceled. Ticketmaster has also enraged rival Ticketron, whose chairman--Washington sports mogul Abe Pollin--says Rosen is the only businessman who has made him mad enough to sue.
Rosen, who notes sheepishly that "when you get big, people take pot shots at you," calls the claim of high service fees "unwarranted, because people are paying for service." He says that consumers "can go to the box office" to avoid fees.
As for Ticketron, which computer giant Control Data Corp. recently sold to an investment group headed by Pollin, Rosen observed: "Ticketron is a dinosaur. People are dissatisfied with their service. Their technology was 12 years old in 1980."
Battling opponents is nothing new for Rosen, who said he knew little about the ticketing or entertainment business in 1982 when he undertook some legal work for Ticketmaster, which is owned by Chicago's wealthy Pritzker family. He said he takes his business cues, not from law or business manuals, but from the ancient Chinese book "The Art of War," by Sun Tzu.
Since becoming head of Ticketmaster in 1982, Rosen has used aggressive tactics to boost the company's annual revenue to about $80 million from $1 million. Last year, Ticketmaster sold 25.6 million tickets by mail and from 850 outlets in 37 states.
Ticketmaster grew largely at the expense of Ticketron, which last year had a loss of about $2.5 million on revenue of $45 million. But Ticketmaster's revenue growth has also been aided by unreasonably high ticket surcharges, critics say.
"If I needed a haircut, I'd go to a barber instead of going to Ticketmaster and getting scalped," quipped Robert G. Prentiss, a Republican minority leader of the Albany County Legislature, who is backing a state measure that would cap ticket service charges in New York at 10% of the base ticket price or no more than $4.
A survey conducted last month by the New York State Consumer Protection Board found that surcharges increased ticket prices as much as 55%. Fees also vary greatly. One Manhattan Ticketmaster outlet added $5 in surcharges on a $14 ticket for "Walt Disney's Magic Kingdom on Ice Show" but added $2.75 to a $8.50 ticket at a circus event at the Nassau Coliseum.
The highest surcharges occur when a consumer orders tickets by phone and pays with a credit card, Rosen acknowledges. Such customers often pay a single handling charge on top of service fees for each ticket ordered. Those who obtain tickets in person from a Ticketmaster outlet, usually a major department or record store, pay only the service fees, and in most cases fees can be avoided by going directly to the box office.
Ticketmaster encourages credit card orders because they generate demographic data--such as a purchaser's name and address--which event promoters can use to target their advertising more carefully.
That kind of information helped Michael Rowe, general manager of the Meadowlands in East Rutherford, N.J., increase restaurant sales at the sports complex. Using data from customers who had ordered concert tickets through Ticketmaster, Rowe wrote letters urging concert goers to come early and eat in the Meadowlands' restaurant.
Similarly, Rosen has arranged conference calls with stadium operators and concert promoters so that they could monitor hourly ticket sales computer data to determine whether there was sufficient demand to add an extra show.