Scoring Tickets - entertainment and sporting events

Kiplinger's Personal Finance Magazine, April, 2001 by Elizabeth Razzi

ENTERTAINMENT | Why you find only SOLD-OUT SEATS to big events, and how to improve your odds.

A FAN STANDS in line outside Yankee Stadium to buy a ticket for that day's game. Before he gets to the window, a scalper sidles up and offers him a deal. The seats look good, so the Yankees fan does a little business. After the game, the fan stops by the advance-sale window to buy tickets for later in the season and notices that the agent in the ticket booth looks familiar. He's the scalper.

Thus the complaint of one ticked-off Yankees fan launched an investigation that has 16 people awaiting trial on felony charges, including fraud and bribery in connection with ticket sales to Yankees and Mets games. Said Manhattan district attorney Robert Morgenthau, in a statement after the arrests: "Ordinary fans had virtually no chance to obtain the best tickets, since corrupt ticket agents were diverting them to scalpers."

The trouble is, if you want to see a big-time sporting event--or take the family to see The Lion King on Broadway, or even get tickets to Eric Clapton later this year--you may have little choice but to pay a scalper. And scalpers are only one reason scoring tickets has become such an ordeal. The other causes have to do with how the ticketing business has evolved.

The ticket economy

IRONICALLY, buying tickets has never been easier--at least for tickets to nonblockbuster events. One company, Ticketmaster, controls the sale of tickets for most venues in the country. Anyone with a telephone or a computer can order tickets the second they go on sale, and if the demand for the tickets you're after isn't great, you can score them in minutes.

But it's another story if you want tickets to the most popular events, such as boy band `Nsync, which toured sold-out arenas last fall. For concerts such as those, a 17,000-seat arena can sell out faster than you can brew your morning coffee.

Concert tickets typically go on sale at 9 A.M. or 10 A.M. on Saturdays. When the big hand hits 12, Ticketmaster starts selling seats through more than 1,000 phone operators, the Ticketmaster. corn Web site and ticket outlets located in department stores, music stores and box offices. All the sales draw from the same pool of tickets simultaneously.

Ticketmaster sells half its tickets at outlets, more than a fourth over the Internet and the rest over the phone. The Internet share is expected to top 30% this year. "Our absolute sales volume is second-largest on the Internet, behind Amazon.com," boasts Tom Stockham, president of Ticketmaster.com, the online unit of the ticket giant. "But all the volume is happening in an hour on Saturday morning."

In that blitzkrieg, you're not just competing against other fans, you're competing against scalpers--people who have no intention of attending the concert, but who buy tickets to resell them for profit. This practice isn't even illegal in many states.

Supply and demand

DEMAND IS only part of the story of quick sellouts. One very important reason that a 17,000-seat arena sells out in minutes is that there may have been nowhere near 17,000 seats for sale.

Rodney Eckerman, co-CEO of SFX Music Group, the nation's largest promoter of concerts, ice-skating shows and other live events, says that for a concert in a typical arena, the artist's record company claims hundreds of seats. Corporate sponsors also claim a batch, he says. At a recent Tim McGraw-Faith Hill concert in Orlando, for example, McGraw was sponsored by a beer company and Hill was sponsored by a phone company. The tickets bore the American Express logo.

The official line from the ticket-selling industry is that scalpers get tickets the same way you do, only they're better at it. Stockham says scalpers succeed mainly because securing tickets is their living and they're willing to work the system. "They buy the tickets only if they can get good seats that they think will sell," he says.

Yet that doesn't explain how scalpers invariably leave the feeding frenzy with some of the best seats in the house, which they often resell for up to ten times their face value.

Randy Cohen, president and CEO of TicketCity.com--a ticket brokerage with 40 employees, a store in Austin, Tex., and a big presence on the Internet--makes no apologies for his line of work, which might be called scalping with a legitimate sheen. He says his business is all about contacts. "We have relationships and contracts with people and venues," says Cohen, who is on the board of directors of the National Association of Ticket Brokers. "Through our relationships we're able to get tickets."

Take the Super Bowl, for example, maybe the most elusive ticket in sports. Most seats for this year's game in Tampa bore a face value of $325. "But you couldn't get them at $325," Cohen notes. On his Web site, he sold "the cheapest get-in-the-door seat" for $1,900. He says his cost on a ticket like that is roughly $1,500. "We get them from our contacts that we've been working with for years," says Cohen. "NFL players and coaches, they own the tickets. They don't want to go to the game; they'd rather have the money. And there are a lot of sponsors and season-ticket holders out there."