Cutting In the Middle Man Wizards give ticket holders permission to scalp away.

Many of the underbelly’s best ideas—moonshine, running numbers, and so forth—have ended up usurped by the Man. Now ticket scalping, which has been shoved off stadium sidewalks over time, is creeping further into the mainstream than ever before.

Consider, for example, the markups on offer leading up to the Wizards game against Orlando on Saturday at MCI Center, the home opener of the 2005–2006 season: A week earlier, 10 tickets for that game in Section 406, the uppermost tier of the arena, were being offered for $106 apiece at stubhub.com, the Web site of a San Francisco–based, Internet-only marketplace that brings ticket sellers and buyers together.

According to Wizards staff, those same tickets go for a mere $48 at the box office on game night.

Factoring in the 10 percent buyer’s commission charged by StubHub, that means products with a combined retail value of $480 are going for $1,166. That’s 243 percent of the price set by the Wizards. (StubHub also gets another 15 percent of the sale price from the seller. So, for every $100 in tickets sold, the buyers pay $110 and the sellers take home $85. Unlike eBay, StubHub requires its sellers to charge fixed prices, and it does not charge for listing tickets.)

That markup, by itself, is nothing revolutionary. Scalping is as old as sports; there was probably a bustling resale market for the fight card headed by Cain vs. Abel. And the practice is only quasi-illegal in the District. Any ticket transaction on a public street, even the selling of a $25 ticket for a quarter, is illegal. Diane Ford, a spokesperson for the Metropolitan Police Department, says that both the scalper and scalpee can be fined $50, have their tickets taken from them, and be “locked up.” But as anybody who’s ever attended an event at the MCI Center can attest, those laws are rarely enforced; one of the few times D.C. cops cracked down hard on scalping took place when the Washington Capitals made the 1997 Stanley Cup finals, when undercover officers made scads of arrests outside the arena on Fun Street NW.

However, most scalping now goes on where the long arm of the law can’t reach. It’s totally legal for city residents to sell or buy that same $25 ticket for $2,500 as long as the sale takes place anywhere other than a public street. The advent of the Internet has been a boon to the legal scalping trade: There are more than 1,000 established ticket-brokering businesses in the United States.

But the StubHub business model is nevertheless novel, for one reason: For the first time, such sales are wholly endorsed by the Wizards. StubHub spokesperson Sean Pate says the company was scheduled to officially unveil its partnership with the team this week.

Under the deal, the Internet firm will promote upcoming Wizards games, and the team will have its own page, adorned with Wizards logos, on the site. In exchange, the Wizards will give StubHub their blessing to put tickets to MCI Center games up for sale.

Pate says the Wizards have joined a growing stable of sports franchises created when the Seattle Mariners signed on with StubHub in 2001, a year after the company’s founding. Major League Baseball has since prohibited its franchises from such alliances and has started up its own ticket marketplace. The Capitals, owned by Internet guru Ted Leonsis, have also become a StubHub partner.

“This is what teams are doing now,” says Pate. “We’ve been able to show them it’s to their benefit to offer a secondary resource to their fans. The teams may have sold out their tickets, but there’s going to be fans who aren’t able to come to games. And the empty seat can really affect a team’s revenues, when you factor in soft drinks and beer and parking and merchandise. More and more teams want to help another fan get a hold of those tickets.”

While this trend would seem to be an endorsement of scalping—or, as Pate refers to the practice, “secondary-market sales”—he denies that teams that align themselves with StubHub are promoting the gouging of their fans.

“We don’t set the price of one ticket that’s sold on StubHub,” he says. “The seller sets the price, and the market decides if it’s a good price. Yes, that’s how it works [with scalpers] in front of the arena on the night of an event, but unlike those sales, we guarantee the validity of every ticket sold, and safety is not an issue if you deal with us.”

The Wizards organization sees no downside to the deal.

“StubHub is going to do this with or without us,” says Matt Williams, spokesperson for Washington Sports and Entertainment, the Abe Pollin–headed corporation that owns the MCI Center and the Wizards. “So we entered into a sponsorship deal, where we allow them to use our logos and they allow our season-ticket-plan holders to use their service. We see this as more of a service to our plan holders than as [an endorsement of inflated prices].”

Williams points out that Pollin has always been at the forefront of changes in the ticketing industry: The Capital Centre, the Landover venue that Pollin built in 1973 and demolished in 2002, was the first U.S. arena to offer computerized ticketing. And he was a ground-floor franchisee of the ticket-selling behemoth now called Ticketmaster; Pollin still controls Ticketmaster in the Washington-Baltimore market.

The partnership with StubHub, however, would seem to put the Wizards in a conflicted position. There is incredible financial incentive for the team to play the scalping game for select events. When Kobe and Kwame and Phil and the other Lakers come to town, for example, demand for tickets will far outstrip supply. So, theoretically, the team could keep any number of tickets out of the general public sale and simply offer them through StubHub at a grossly inflated rate. At worst, whatever tickets remained unsold could be unloaded for their original retail value at the MCI Center box office on game night.

Williams says that sort of insider trading was never considered when the team signed on with StubHub, and he pledges that gouging won’t happen on Pollin’s watch. He also asserts that Wizards employees, who have dibs on tickets before they’re available to the general public, will not be allowed to use the new trading partner to enhance their income.

“We had a policy in place before where our employees are not allowed to [resell tickets], and they won’t do that now,” Williams says.

The alliance is another sign that Pollin and the Wizards are friendlier to season-ticket holders than Dan Snyder and the Redskins have been. In August, the Washington Times reported that Snyder had yanked season tickets from a family that had been going to Redskins games since the ’40s after some of the family’s tickets were offered for resale on eBay. Redskins management threatened to take similar action against any fan caught trying to resell a ticket for above face value.

“No, we won’t do that,” says Williams when asked if the Wizards will follow Snyder’s lead. “Again, we see this is a service to our plan holders.”—Dave McKenna

Art accompanying story in the printed newspaper is not available in this archive: Illustration by Brett Young.

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