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Ticket scalping comes to a head

NCAA, pro sports leagues and entertainers are angling to control profitable resale market.

March 10, 2007|Greg Johnson | Times Staff Writer

You need only two of the primo tickets you bought for the NCAA championship game on April 2 in Atlanta's Georgia Dome. So the next move is to scalp the extras online, where men's college basketball tournament tickets with a face value of $204 are on sale for as much as $5,800 apiece.

Not so fast.

The NCAA, tired of third-party brokers siphoning off money by reselling tournament tickets, is threatening to blacklist fans who are caught scalping tickets anywhere other than RazorGator.com, the NCAA's official ticket reseller.

And the NCAA isn't alone. Sports leagues, college teams, concert promoters and entertainers are all trying to control -- and profit from -- the booming ticket resale market.

"This is the hottest-button topic right now in the live entertainment world," said Jim Guerinot, the manager for Gwen Stefani, Nine Inch Nails and the Offspring. "No question, millions and millions of dollars are going to third parties with no financial investment in the venue, the artist or the promoter. And everyone's jockeying to assert their interests."

Last summer, rock star Tom Petty voided a reported 1,400 fan club concert tickets that fell into the hands of scalpers. The NFL's New England Patriots have filed a lawsuit against season-ticket holders who scalped seats online.

And, in February, the NBA signed industry giant Ticketmaster as its "official" ticket reseller so teams can try to get a share of the profit generated when hot basketball tickets are resold.

The ticket police are out in force because of the burgeoning ticket-resale business. The value of tickets resold online and elsewhere in 2006 is estimated at $2 billion to $10 billion -- the wide range a result of the difficulty of tracking what amounts to fan-to-fan sales.

The NCAA deal with Los Angeles-based RazorGator Experiences blurred a long-standing line between ticket issuers and scalpers.

"Now everyone is trying to figure out a way to capture this market," said Gary Adler, an attorney who represents the National Assn. of Ticket Brokers.

For proof, look online, where myriad ticket-resale websites are awash in offerings:

A courtside seat for Sunday's Lakers-Dallas Mavericks game at Staples Center is $5,001. A front-row seat at Staples for the Police reunion tour in June is offered for $3,050. And for last month's Super Bowl, $600 and $700 face value tickets sold for $3,000 to $5,000 each.

Sport teams and promoters know that they can't stop all scalpers -- but they are fighting hard for a share of the industry where transaction fees can equal 25% or more of the sales price.

RazorGator, for example, levies a fee of up to 25% on each March Madness ticket resold through its website. So the NCAA and RazorGator will share as much as $454 if someone spends $1,819 for the highest-priced ticket available online Friday. The NCAA also will share in profits generated by tickets RazorGator is bundling into upscale travel packages.

"There's lot of frustration with the amount of dollars going into the secondary market," said Gary Bongiovanni, editor in chief of Pollstar, the concert industry trade magazine. "It represents money not being shared by venues, sports teams and artists."

The NCAA must complete a bit of detective work before placing ticket scofflaws on its blacklist. Tracking an unauthorized ticket sale can be difficult because scalpers often list tickets with several online brokers. Seat descriptions are often vague -- "behind the basket," for example, or "at half-court in the upper deck." But the NCAA maintains that it has tracked unauthorized deals during past Final Four tournaments, and will do so again this year.

Ticket issuers say that the policing process will grow easier in coming years as paper tickets give way to electronically issued admissions that issuers can more easily track.

The clearest sign that scalping has moved from dark alleys to Main Street came in February when EBay paid $307 million to buy StubHub, a San Francisco-based company that has brokered the sale of some 5 million tickets and is best known for sports and concerts. One industry observer likened the deal to "creating a Nasdaq for tickets."

But there isn't any uniformity in ticket resales because venue owners, promoters, leagues, performers and ticket resellers each have their interests.

Baseball's San Francisco Giants steer season-ticket owners with extra seats to a proprietary website that handled more than 125,000 sales last season. USC signed a deal to send its football ticket holders to StubHub, though Trojans fans are free to deal their tickets elsewhere. The Chicago Cubs' parent, Tribune Co. (which also owns the Los Angeles Times), has been experimenting with a free-standing business that has sold Cubs tickets at steep premiums above face value.

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