By Christine Paluf
The recent Cubs team ruling that approved the reselling of tickets to Cubs games through an affiliated but separate business, Wrigley Field Premium Ticket Services, said that no laws were broken in the deal.
The team set up its own separate market for game tickets, working with Wrigley Services, that the Tribune Company also owned. Selling tickets at face value, Wrigley Services would mark up 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 arrangement. So when will the rest of the industry catch on?
Last year, Minnesota head coach Mike Tice was investigated by the NFL for a Super Bowl scalping scheme that had been in place for years. Apparently, the practice wasn’t secluded to just Tice, it’s widespread throughout the league. However, most are confined to locker room secrets, not run by the head coach. On some teams, ticket scalping is an extra source of revenue to assistant coaches.
Though he wasn’t the head coach when the operation began, that matters little to officials who are enforcing the league rule against reselling tickets for profit. Tice admitted to scalping some of the 12 tickets he bought from the NFL, and was fined $100,000. That was a tenth of this salary. Two other coaches were also fined for the scalping.
But it’s not just the Super Bowl that commands these prices, or that has issues with internal scalping. A member of FIFA’s executive committee, Ismail Bhamjee, was also tagged for selling 12 World Cup tickets at inflated prices. His accreditation was revoked.
But why? Once the ticket is theirs, why can’t they make the decision to do with it as they please? Of course, the rule said it was a no-no, but who is the rule there to protect?
Scalping is legal in California as long as it’s not done on premises. Many other states that host the event require a license for brokers to resell tickets, and prices can go sky-high for tickets that don’t start off cheap to begin with. Face value on Super Bowl tickets can be $500, and resell on secondary sites for $6,000 or $7,000 a piece.
It just makes good business sense. Ticketmaster has realized the money available in this market. “Team Exchange” allows season-ticket holders with some pro baseball, basketball, football and hockey teams to resell tickets they can’t use, through a team-sanctioned Website, run by Ticketmaster.
Many season-ticket holders buy a number of tickets each year, with the intent to resell so they can pay for either their own ticket or their entire trip, depending on how hot the game is.
The Cubs deal takes that profit from the pocket of the fan and keeps it with the team. But the team painted the scenario as a benefit for fans, protecting them from brokers on the secondary market by giving them more choices, at a normal sized markup. And lawmakers bought that story.
Consumer protection laws bar an event-holder from selling tickets for more than face value. Which is why the Cubs set up a separate corporation to resell their tickets. So the question remains, why don’t they just set their ticket prices higher from the start, if they want more of a percentage on the event?
There will surely be more teams jumping on this bandwagon.