SHOW STOPPERS? If you hope to get the best seats, a broker might be just the ticket (The Atlanta Journal-Constitution)

08/21/2006

Atlanta Journal-Constitution, The (GA)


August 20, 2006
Section: Business
Edition: Main; The Atlanta Journal-Constitution
Page: F1

SHOW STOPPERS?
If you hope to get the best seats, a broker might be just the ticket
MIKE TIERNEY


Staff
Mariah Carey devotee Rochelle Warden was scanning the online classified ad site Craigslist when she spotted a link for concert tickets.


It routed the Mariettan to MadTickets.com, where she landed a pair to the recent gig at well below list price. Just one disquietude: The broker stipulated that the deal go down at a McDonald's off I-85.

"I was really leery about it," Warden said. "She wouldn't let me come to an office. That was kind of weird. I didn't know if that $200 was gone."

The sale, transacted to the sound of crackling french fries and slurped sodas, put Warden and her pal, Courtney Hansbro, in the second row sidestage at Philips Arena, almost close enough to reach out and brush the diva's long blond tresses.

Apart from the fast-food backdrop, tapping into the so-called secondary market for choice seats has become routine for patrons of music, sports and theater events. Like Carey's abs, the pool of buyers clutching tickets obtained directly from traditional sources in the primary market, mainly Ticketmaster around these parts, has dwindled.

Fewer than half of those situated near Warden and Hansbro shopped the conventional way -- shelling out $129 apiece, plus service charge -- while others wound up with secondhand tickets, some smudged with numerous fingerprints.

The twin engines driving this trend are a 21st century phenomenon, the Internet, and a doctrine older than the Rolling Stones: supply and demand. Ticket brokers -- the artisans formerly known as scalpers, whose once illegal activities have been legitimized in about 40 states, including Georgia -- are fond of saying they engage in society's second-oldest profession. That is, selling on the open market.

None of which justifies, to the system's critics, a free-for-all scramble that tends to tilt the scales for desirable seating toward those with disposable income. "Second-oldest -- and Caligula probably scalped tickets to watch the oldest profession," said Philips Arena President Bob Williams.

Williams lobbied against the Georgia bill, passed and signed into law five years ago, that moved scalpers from shadowy operations dealing out of hotel rooms to Yellow Pages listings -- provided they obtain licenses. Consumers without deep pockets, he contended, "are the losers."

Not always. A sampling of the Carey crowd perched near Warden and Hansbro revealed a wide range of amounts, for listed $129 seats, charged by a variety of sellers.

In the second row, one section over, Mitzi and Barry Adcock of Calhoun paid $200 apiece. Rachel Jones and mom Diane, commuting from the same North Georgia town, scored theirs 20 rows up for $120 each.

Addys Cabanas and Melanie Ward were satisfied with paying $140 per, as were Vivian Lee and two friends for $155. But they were farther from the stage than Christopher Estes and Josh Jolly, who discovered a block of eight seats for $80 a pop.

Some bought from eBay, others from online brokers found on the Web or in the telephone book. About two dozen entries appear in the metro Atlanta Yellow Pages under "Ticket Sales -- Events."

Assorted first-time Web site customers had fretted that their tickets, nearly all of them sent by mail or package delivery, were counterfeit or duplicates. "I was a little nervous," said Barry Adcock, who did not rest easy until he was waved through the Philips gate.

Regular clients of ticket resellers, such as Mike Durst, had no such worries. Placed second row, center, with his date, Durst had waited until the most coveted seats pitched by his broker dipped from at least $750 to $350 the morning of the show.

"I like sitting up front," said Durst, who has dealt with the same local enterprise for 10 years, for sports and the circus, for performances by dinosaur bands and the purple dinosaur Barney.

'People used to go to jail'

Wading into the secondary market does not come without risk. Some brokers sell "short," offering tickets they have yet to obtain. Once they get an order, they seek the seats from their connections at profit-making prices -- sometimes unsuccessfully.

A part-time scalper of Masters badges at Augusta National failed to scarf up enough to satisfy his clients in 1997 when prices rocketed beyond his projections. He shot himself to death.

Increasingly, dealers are "guaranteeing" tickets at the agreed-upon price, or at least reimbursements should they not arrive in time. Booming cyberspace ticket superstores such as StubHub and RazorGator, some backed by venture capital, handle large quantities and can better absorb the occasional loss.

"People used to go to jail for what I do," said Steve Susce, co-owner of AAATix.

No business model has gone unexplored. Four MIT students, frustrated at missing out on the Red Sox postseason, formed YooNew, a futures market for major sports tickets. For example, NFL fans can make a no-refund investment on a Super Bowl seat -- face value is $600 -- by getting dibs on a ticket well in advance at a price based on a team's prospects. A roll of the dice on the Falcons goes for $215.99 per seat.

Industry experts put the number of established resellers with a brick-and-mortar presence at 500 to 600. But in these high-wired, wide-open times, said Carl White, founder of WebTickets, "Every computer is a Ticketmaster outlet these days."

Stiffed by scalpers

Thousands of Wisconsin college football crazies flew to the 1994 Rose Bowl on the assumption that scalpers who had assured them tickets would deliver. But the dealers overpromised and, unable to fill the orders, stiffed many of them.

Thus was born later that year the National Association of Ticket Brokers. Motivated by self-protection, the NATB fended off threats of federal legislation by establishing procedures for its voluntary members, now at about 200, and a mechanism for buyers to air complaints.

"We've helped clean up the industry," NATB counsel Gary Adler said.

Stephen Happel, an Arizona State University professor of economics who has advised state legislatures with ticket matters, recommends NATB card-carriers. He said the group has booted out some miscreants.

"They bend over backwards to make sure the customer is happy," said Happel, who says he accepts no money from any reseller entity.

Happel is a free-market advocate, noting prices sometimes dip once tickets pass out of the primary market. "It's next to impossible," he said, "for the average person to get great seats at a primary sale."

In a bygone era defined by torn ticket stubs instead of luxury suites, securing the most-wanted seats meant standing in line for hours, even days, until the box office or ticket outlet opened. The equal-opportunity reward: front row.

Scalpers discovered they could snatch the best seats by staking out the lines and approaching buyers as they left the ticket windows with offers above face value. Or, for a white-hot act, they might pay the homeless or needy college kids to stand in line.

As transactions progressed to primarily telephone and online, crafty brokers beat the system with computer programs that allowed mass dialing and Web site accessing to snag tickets intended for the public. Artists countered by creating fan clubs and funneling tickets to members in advance of the general sale. The brokers' counterpunch? They joined the clubs.

Some promoters and arenas are even sleeping with the former enemy: turning up-close tickets over to brokers, then sharing the profits once the seats sell for multiple times the list price.

If the NFL can limit ticket access to the general public, brokers argue, why can't they? All but about 1,000 Super Bowl seats are directed to sponsors, teams and assorted fat cats.

"I've asked people this a thousand times," said the broker White of his industry. "Why is this wrong?"

Tom Waits has an answer

Tom Waits has an answer. He leaned into the mike during a recent gig at the Tabernacle in downtown Atlanta and growled to the full house of 2,500, "I know you're thinking, 'What about waiting in line forever and ever and ever?' Let me just say that I had you in mind. Otherwise, you end up with a ticket on eBay for $1,500. And nobody wants that."

To keep tickets ($65 and $60) away from brokers and other resellers, Waits stipulated that all buyers claim them at the box office just before the show.

"Every single person in that room that night paid face value," said Adam Cohen of Live Nation, the promoter. "That's unheard of today."

Other artists have tried similar tactics with the most desirable seats, but the plan is impractical for larger venues. For Waits, the usual box office staff of two needed 10 reinforcements.

In pockets of Europe, promoters are fighting back with high-tech weapons. Ticket buyers receive bar codes over their cellphones and cannot pass through the turnstile without flashing them.

The latest danger stateside to ticket brokers is not rebellious artists or state legislatures -- who keep loosening the laws at the behest of industry lobbyists -- but Ticketmaster. "The 800-pound gorilla," said the NATB's Adler.

The mega-distributor is establishing auctions and exchange programs for paid-for tickets. The exchange permits resale of tickets, often at inflated prices. "We think the fan is poorly served" by brokers, said Executive Vice President Sean Moriarty.

With the auctions, Ticketmaster, in conjunction with the promoter, team or venue, will siphon off the finest seats and put them up for bid for a period as long as 10 days.

There may be a charitable component or a bonus thrown in -- meet-and-greet the star backstage, throwing out the first pitch.

Along the front row at the Carey concert, Nichole and John Cain were $1,000 lighter for their auctioned seats. "It's worth it," she said.

Nearby, Calvin and Vanessa Addison were overjoyed to land their seats for just $480. They had braced themselves to spend more.

Ticketmaster's goal, Moriarty acknowledged, is to shrink the secondary market. Them's fightin' words to the brokers.

"They have vowed to take over the secondary market like they have the primary market," Adler said. "We believe this is a serious threat."

Long lines are all but extinct in the business of buying tickets, replaced by two camps: for and against treating tickets as a commodity, available for resale at a price reflecting whatever the market will bear.

It is a debate, fueled by the public's visceral attachment to athletes and entertainers, where emotions can run high.

Said the professor Happel, "In this day and age, being there means so much to people. The ticket is a statement: I was there. It can be a life-defining thing."

Sports teams sign up

The Braves stage 81 regular home games, the Hawks 41, the Thrashers 40 -- all extended schedules that may deter prospective season-ticket buying. Some fans who can't attend every game discovered they could offload unused tickets to brokers.

Atlanta's teams now seek to be part of the missing action.

The Braves permit customers with season packages to post tickets with Ticketmaster Exchange. Sellers set the price and are assessed no fee; the buyer pays a 10 percent surcharge.

"[Season-ticket owners] say it's a fantastic offering, a safe and secure environment," said Derek Schiller, the club's senior vice president of sales and marketing.

The Atlanta Spirit, which owns the Hawks and Thrashers, has jumped onto the exchange bandwagon, now with 40 teams, for this season. It hasn't decided on allowing sellers to establish their price.

"We want to make this as advantageous and flexible as we can," said Lou DePaoli, executive vice president and chief marketing officer.

DePaoli indicated that the Spirit approves a ticket markup, it would likely institute a cap. If so, the two teams would join the Braves and most pro franchises signed on with the exchange as a third party to the practice once called scalping.

"Scalping has a dirty connotation. That's one of the things we're wrestling with," said DePaoli, who acknowledges that his teams' season-ticket family include brokers.

The Falcons, whose home games are sold out, are less concerned about tickets going to waste. Still, they struck a marketing deal with StubHub in which the club directs those eager to sell tickets to the eBay-style Web site.

"If fans are going to [scalp], we'd rather provide them with someone safe, operating on the up-and-up," said Falcons director of marketing Jim Smith.

'Never going away'

Brokers, said Williams of Philips Arena, "cannibalize the best portion of inventory available. They siphon off assets in a parasitic fashion. ... But they are never going away," despite Ticketmaster's retaliatory measures.

Brokers maintain they fulfill a need for time-pressed consumers, who are likely to grow exponentially. WebTickets' White presents a forecast chilling to those yearning for simpler times: "Ten years from now, [the price of] every single ticket will probably be based on supply and demand."

Predicted Zach Anderson, vice president of marketing at TicketCity.com, "Someday every household will have its own ticket broker like it has its own cleaners."

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THAT'S THE TICKET

Major Web sites for "resold" tickets:

• www.ticketmaster.com/ticketexchange: Tailored to sellers of Braves, Hawks and Thrashers season tickets. Original bar code canceled, new one assigned to validate ticket. Transaction fee, usually at least 10 percent, is tacked on.

• www.ebay.com: Main source for reselling. No middleman or extra fees. Possible to buy seats cheaply if bidders fall short of asking price and seller deals with high bid. Usual eBay risks apply.

• www.RazorGator.com: Known for work with corporate clients. Offers include travel packages. Tickets guaranteed. Ten percent surcharge.

• www.stubhub.com: Does not own tickets but just manages transactions and shipping. Tickets guaranteed. Ten offices nationwide, including Atlanta. Can instantly access resale laws to assure sales are legal. Marketing agreement with Falcons, but club does not provide tickets.

• www.ticketsnow.com: Only licensed brokers and reselling agents can place tickets on the site. Tickets are guaranteed. Ten percent surcharge with each ticket sold. Web site provides satellite images of parking lots, restaurant options near the venues, limousine referrals and a forum for customer reviews of shows.

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LOCAL BROKERS

The National Association of Ticket Brokers has about 200 members, six based in metro Atlanta:

• Alpha Tickets & Tours

• Empire Entertainment & Travel Inc.

• Peachtree Tickets

• Smooth Tickets Inc.

• Ticket Pros USA

• Ultratix Inc.

TIPS ON BUYING FROM SECONDARY MARKETS

• Look at several Web sites to compare prices. They can vary substantially.

• Check to see whether the seller guarantees the tickets and how they are sent.

• When tickets go on sale to the public, do not assume the best seats are available then. Some choice locations can be held back and wind up in the secondary market.

• If an event is listed as a sellout, check back on the official ticket site in case additional seats are placed for sale. Sometimes, coveted seat locations become available later.

• While members of the National Association of Ticket Brokers agree to abide by a code of business, the organization is voluntary and self-policing. It has ousted members who do not comply with its rules.

TOUGHEST TICKETS

Brokers say these events this year brought the highest prices above face value:

• Masters golf tournament

• Super Bowl

• World Cup soccer

GEORGIA LAW

• Only a licensed ticket broker can legally offer for resale any ticket of admission for a price in excess of the face value of the ticket to any athletic contest, concert, theater performance, amusement, exhibition, or other entertainment event.

• Brokers must maintain a permanent place of business.

• Brokers must pay an annual license fee of $400.

• Brokers must offer a refund when an event is canceled.

• Brokers may not acquire more than 1 percent of all tickets available to an event.

• Tickets cannot be resold within 1,500 feet of the event venue, or 2,700 feet if the venue admits 15,000 people or more.
Photo

MARK J. TERRILL / Associated Press

Fans of Mariah Carey paid widely varying prices for a recent concert at Philips Arena.

Photo

ROBB COHEN / Special

Tom Waits fans line up at the Tabernacle, where they got their tickets just before the show in an effort to prevent scalping. "Every single person in the room that night paid face value," the show's promoter said.


Copyright 2006 The Atlanta Journal-Constitution