The recent ruling by the Cubs team that approved the resale of tickets to Cubs games through an affiliated but separate business, Wrigley Field Premium Ticket Services, said no laws were broken in the deal.
The team established its own separate marketplace for game tickets, working with Wrigley Services, which was also owned by the Tribune Company. Selling tickets at face value, Wrigley Services would mark the tickets and then resell them to fans based on their market value.
And a judge recently ruled that there were no legal issues with this deal. So when will the rest of the industry take notice?
Last year, Minnesota head coach Mike Tice was investigated by the NFL over a Super Bowl scalping scheme that had been in place for years. Apparently the practice wasn’t restricted to just Tice, it’s widespread throughout the league. However, most are confined to the secrets of the locker room, not directed by the head coach. For some teams, ticket scalping is an additional source of income for assistant coaches.
Although he wasn’t head coach when the operation began, that matters little to officials enforcing the league’s rule against ticket scalping for profit. Tice admitted to blowing up some of the 12 NFL tickets he purchased and was fined $100,000. That was one tenth of this salary. Two other trainers were also fined for the scalping.
But it’s not just the Super Bowl that dominates these prices, or the one that has problems with internal scalping. A member of the FIFA executive committee, Ismail Bhamjee, was also accused of selling 12 World Cup tickets at inflated prices. His accreditation was revoked.
But why? Once the ticket is theirs, why can’t they make up their minds to do with it as they please? Of course, the rule said it was a no-no, but who is the rule supposed to protect?
Resale is legal in California as long as it is not done on the premises. Many other states that host the event require a license for brokers to resell tickets, and prices can go through the roof for tickets that aren’t cheap to begin with. Super Bowl tickets can be as low as $500 in face value and can be resold on secondary sites for $6,000 or $7,000 each.
It just makes good business sense. Ticketmaster has realized the money available in this market. “Team Exchange” allows season ticket holders with some professional baseball, basketball, football and hockey teams to resell tickets they cannot use, through a team-approved website, managed by Ticketmaster.
Many season ticket holders buy a number of tickets each year, with the intention of reselling them so they can pay for their own ticket or the entire trip, depending on how hot the game is.
The Cubs’ deal takes that profit out of the fan’s pocket and keeps it with the team. But the team painted the scenario as a fan benefit, shielding them from secondary-market racers by giving them more choice, with a normal-sized markup. And lawmakers believed that story.
Consumer protection laws prohibit an event holder from selling tickets for more than face value. That’s why the Cubs set up a separate corporation to resell their tickets. So the question remains, why don’t they set their ticket prices higher up front, if they want a bigger percentage on the event?
Surely there will be more teams jumping on this bandwagon.