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Scalpers take Super Bowl business online

The secondhand ticket market has grown up a lot in the last decade, shifting from a business largely conducted by salesmen lurking outside stadiums to one chiefly online, both in simple Craigslist postings and more sophisticated Internet databases.
How much are tickets for Super Bowl XLI? Face value is $600 or $700. But if you buy "secondhand," be prepared  to pay up to $5,000.
How much are tickets for Super Bowl XLI? Face value is $600 or $700. But if you buy "secondhand," be prepared  to pay up to $5,000.Dave Martin / AP
/ Source: The Associated Press

Jeff Block is pensive about cashing in his life insurance policy, wistful about putting off his wedding engagement, fearful about making the big purchase.

One thing the 31-year-old financial analyst is sure of: If he comes up with the cash to follow his beloved Chicago Bears to the Super Bowl, he won't be buying tickets from a traditional scalper. His attention is focused on one of the many online ticket resellers.

The secondhand ticket market has grown up a lot in the last decade, shifting from a business largely conducted by salesmen lurking outside stadiums to one chiefly online, both in simple Craigslist postings and more sophisticated Internet databases.

"The street business has really died,'' said Don Vaccaro, who has been selling tickets since 1979 and is the founder and chief executive of Vernon, Conn.-based TicketLiquidator.com. "The old-time brokers are saying, 'Look, you got a bunch of geeks selling tickets now.' It's really a lot more brains going in now.''

There are about 70,000 seats at the Feb. 4 game, but ticket distribution is tightly controlled by the NFL: 25.2 percent to the league itself, largely for sponsors, licensees and the like; 17.5 percent each to the two competing teams, the Chicago Bears and Indianapolis Colts, with some raffled off to season ticket holders; 5 percent to the host Miami Dolphins; and 1.2 percent to each of the remaining 29 NFL teams.

Many of those lucky enough to get tickets when they're first sold won't part with them. Princeton University economist Alan Krueger studied the ticket market during the 2001 Super Bowl in Tampa and found only about 20 percent of seats were resold.

"People were very reluctant to sell their ticket,'' he said. "If they won their ticket in the lottery they acted as if they were chosen by God to go to the game.''

That leaves desperate fans with a choice: Pay up or park yourself on your couch.

If they choose the former, and turn to a broker, they will be buying tickets that have been marked up at least twice - by the original holder or holders and then again by the resale company, which typically tries to secure a price 20 percent to 30 percent higher than it paid. The result is upper-level seats from around $3,000 to luxury sideline suites for over a half-million dollars, though the average regular Super Bowl ticket sold online is about $5,115, according to an analysis by SeatSmart.com, an online ticket search site.

The face value of all Super Bowl tickets is $600 or $700.

The National Association of Ticket Brokers says there are about 600 brokers nationwide; those in the industry say their online presence has increased competition and pricing transparency. They say - believe it or not - tickets used to be marked up even more.

"It used to be, buy a ticket, triple your profit,'' Vaccaro said. "Now it's buy a ticket and you're lucky if you get 20 percent.''

If that isn't pulling at your heartstrings, consider the rate at which some companies are growing. Mike Domek started his company in 1992, generating $100,000 in sales its first year. Last year, Crystal Lake, Ill.-based TicketsNow.com hit $200 million in revenue.

And it's not just big sporting events like the Super Bowl, the World Cup or the Masters adding to their bottom lines. While Domek made more on the Super Bowl last year than any other single event, tickets to the musical "Wicked'' collectively generated more revenue than anything else.

Mike Janes, a senior vice president at online ticket broker StubHub.com, said people will spend the money because such tickets are seen as admittance to a once-in-a-lifetime experience. StubHub was recently purchased by eBay Inc. for $310 million.

"People spend a lot of money, thousands of dollars quite often, for experiences like going to Hawaii, going on a cruise, going to Las Vegas, going to Disney World,'' Janes said. "Fans, especially passionate fans, think nothing of spending that amount of money on an event like this.''

Gene Kudron, a 49-year-old who lives in Winfield, Ill., and owns a small manufacturing company, is among those who decided it's worth the cost. He bought four Super Bowl packages on RazorGator.com for a total of $24,800.

"I had it up on the screen and I didn't hit that button for probably 10 minutes,'' he said. "I tried to justify it 15 different ways but it's an opportunity I probably won't have again.''

Though much of the initial allotment of Super Bowl tickets is going to corporate buyers, many of the resold ones are, too. Companies buy them up to reward clients and employees and brokers say they account for most of the business up until the two weeks before the Super bowl.

"They're the only ones who will allocate funds no matter what team is involved,'' said Michael Lipman, president of Miami-based TicketsOfAmerica.com.

Lipman will sell about 20 to 40 game tickets to Richard Bennetti, chief executive of Ocean Drive Limousine in Miami, who gives them to clients. Bennetti says it keeps customers interested in his business by giving them an unmatchable experience.

"It's like giving a small baby its first taste of ice cream,'' he said.

The majority of states have no price cap on ticket resales by brokers; Florida eased its rules last year and some other remaining ones appear poised to follow. Still, companies can often get around any restrictions by offering travel packages, with tickets, airfare, a hotel room and other perks bundled together. Scalpers who work right outside events typically face tougher constraints, but overall the legal environment has become friendlier.

"The clear trend,'' said Gary Adler, a lobbyist and attorney for the National Association of Ticket Brokers, "is toward opening up markets.''

Krueger said his survey showed most fans support a legal ticket resale market but don't want to see the NFL charge more. Many argue the league could improve the Super Bowl situation by giving more tickets directly to fans, but Brian McCarthy, an NFL spokesman, said there will never be enough.

"If we could build a stadium for 400,000 fans we still wouldn't have enough tickets,'' he said.

As for Block, he was still struggling with his decision as game day neared. He was worried more about the cost than upsetting his girlfriend.

"She puts up with a lot,'' he said.