2018 is not a great year to be a professional ticket reseller. The crash of Razorgator this week is just one more bad note on an already difficult business climate for ‘mom and pop’ ticket brokers who are getting squeezed out of season tickets by consolidators, blocked from big shows by technology like Ticketmaster’s Verified Fan and governed by an ineffective lobbying group that’s once more been caught by surprise in yet another crisis.

The fact that Gary Adler still serves as Executive Director of the National Association of Ticket Brokers is baffling to most industry watchers — Adler has stumbled from one disaster to the next, only addressing liquidity crises after it’s far too late. On Monday, Adler detailed to his members how he tried, largely in vain, to establish contact with California ticket firm Razorgator after it had fallen months behind on payments to his members — the following day, Razorgator dismissed its employees, locked its doors and hired financial advisory firm Sherwood Partners to push the company through a “formal insolvency process.”

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The similarities to Scorebig crash of 2016, which costs its members millions of dollars, is still fresh in the minds of many ticket brokers, who face a seemingly difficult business climate in 2018 as they try to compete against large, financially powerful consolidation firms that are buying up resale rights for America’s biggest sports teams in nine-figure deals and pushing out the competition.

Earlier this month, the Los Angeles Dodgers became the latest professional sports team to sell their secondary rights to Eventellect, one of several consolidators that work with teams to manage their inventory across the secondary. The agreement means that most brokers who hold season-tickets will lose their tickets as a result of the consolidation deal, pushing them out of the market after the successful 2017 World Series, which was one of the most lucrative on record for brokers.

Eventellect co-founder Patrick Ryan tells Amplify the team was incentivized to capture some of the profits that had gone to brokers, saying “ticketing is really complex and those who aren’t 100% focused on helping content rights holders reach more fans no longer have a place in the ecosystem.”

As brokers get squeezed by sports teams, they are also feeling the crunch from the live music industry, which is pricing tickets higher, selling tickets slower and using technology like Verified Fan to block out bots and brokers from buying up large pools of tickets to flip on the secondary.

“We’re not trying to sell all of her tickets in one minute,” Ticketmaster EVP of Music David Marcus told me in a December article for Billboard, who said the days of instant sellouts were good for generating buzz, but created false demand as brokers would buy up the bulk of the tickets and shift their sale to sites like StubHub, often with big markups.

“You’ve got a lot of ticket brokers who once enjoyed big profit margins now finding themselves on the outside looking in,” said one ticket expert who wished to remain anonymous. “Their attitudes haven’t change, nor has their sense of self-importance and now it’s too late.”

All of this bad news comes at a time when the ticket industry has seen a steady stream of negative headlines, beginning in early 2017 with the indictment of Joe Meli for operating a large Ponzi scheme with investors mislead to believe their money was being used to purchase tickets for shows like Hamilton and Bruce Springsteen on Broadway for resale. That was followed by the arrest of broker and NATB member Jason Nissen on similar Ponzi scheme charges and a continued crackdown on bot-users with a multi-million-dollar fine against brokerage firm Prestige Entertainment for using bots to buy up tickets for resale.

If there is one bright side in the stream of otherwise bad news it’s that teams are increasingly looking for distribution partners, if the team or content holder is cut into the deal. SeatGeek’s recent signing with the Dallas Cowboys, coupled with the deals brokered between the NFL, StubHub and Ticketmaster for an open architecture ticketing system show there is potential for brokers to work as partners with rights holders to sell inventory through multiple distribution channels.

“There’s not a primary and secondary any more, there’s just a marketplace,” StubHub spokesperson Glenn Lehrman told Amplify. “Increasingly, content right holders are willing to price tickets to market value and share in the upside because for so long tickets have been priced inefficiently, but now we’re seeing teams get smarter about pricing and having multiple points of distribution.”

Dave Brooks
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Dave Brooks

Founder & Executive Editor at Amplify Media
Dave Brooks has over 15 years experience as a writer, including eight years as the Managing Editor of Venues Today. He started Amplify in 2014 to give the industry its own voice and turn up the volume on live entertainment.
Dave Brooks
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