Don't Scalp Us. We'll Scalp You
They may be the lovable Cubbies to Chicagoans who have suffered through decades of defeat -- and defeat snatched from the jaws of victory. But two years ago, when the Chicago Cubs held back some tickets and sold them just before game time through a ticket broker affiliated with parent Tribune Co. (TRB ), boos rained down in the courts.
With $50 tickets going for as much as $500 apiece, hundreds of fans joined in a class action that claimed the team violated the Illinois Ticket Scalping Act, which forbids selling any ticket for above its face value. "When the Cubs inflate the price, where is a fan supposed to go?" wrote one distraught fan on the Cub Reporter, an Internet chat room.
That suit was dismissed in state court in November and is now heading for an appeals court. But thanks to booming secondhand-ticket sales on the Internet and the eagerness of sports teams and online ticket agencies such as Ticketmaster to get in on the action, those decades-old scalping laws are fast becoming irrelevant. That's great for teams, who annually cry poverty and hope to make a little extra by scalping tickets. As for home team loyalty, some teams are already getting the Bronx Cheer. "I'll never buy another Cubs ticket in my life," says Chicago cabbie Randall M. Galles, a lifelong fan.
Today, a hodgepodge of anti-scalping laws in 31 states restrict everything from where scalpers can holler "I got two!" to the prices they can get. In New York State, for instance, the legal markup is $2. Other places allow small "service fees." But the rules are rarely enforced.
The anti-scalping laws were originally designed to stop nuisance sellers who harassed fans, charged exorbitant prices, and sometimes sold counterfeit tickets. But with player salaries soaring and the Internet making ticket buying far quicker and less seedy, the old home team has gone into the brokering business. And it isn't just sports: Ticketmaster has made hefty fees hosting a few test auctions for concerts or boxing.
But it's a sprint for pro sports. Eight teams, from baseball's Seattle Mariners to football's Green Bay Packers, are going online to do exactly what they long derided curbside scalpers for doing. They're directing hometown season-ticket holders to offer their unused seats on StubHub.com -- and taking about a 10% cut when the tickets are sold. Eighteen other professional football, basketball, or hockey teams have put up their own sites, to do much the same, with the help of Ticketmaster. Pro basketball's Phoenix Suns are proving just how profitable the practice of home-team scalping can be: When the Cleveland Cavaliers' high-school phenom LeBron James came to Phoenix in November, the Suns' site got $300 for tickets that had a face value of $75.
LIKE PLANE SEATS. Those who back the idea of sports teams' getting into the scalping game argue that it's not much different from the "yield management" techniques employed by airlines, which sell higher-priced tickets closer to the departure date -- and when the interest is hottest. And it pays: Clients of StubHub.com, which include the New York Jets, collected close to $100 million in ticket sales last year, according to President Eric H. Baker, with most going for about 30% above face value. As for the average team, it gets roughly 10% of the cut while ensuring that more fans troop to the stadiums to eat their hot dogs and drink their overpriced beers.
Down the road, the free market for sports tickets will shift into high gear. Basketball's Los Angeles Clippers will auction seats to its final game, on Apr. 14, on eBay. A similar auction was run this week by the Orlando Magic with Ticketmaster. But it's not all high-flying dunks for the locals, if Ticketmaster's experience with boxing is any indication. At last year's heavyweight bout between Lennox Lewis and Vitaly Klitschko, Ticketmaster was unable to sell all of the tickets it put up for auction starting at $3,000. No doubt there will always be a market for the hot ticket, but sometimes even a rabid sports fan will cry No mas.
By Brian Grow in Atlanta, with Robert D. Hof in San Mateo, Calif.