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Ticket scalping boom shuts out fans

"We couldn't find tickets that matched your request."

Most of us have seen those words on our computer monitors moments after tickets go on sale on Ticketmaster. But for each frustrated New Yorker who gets shut out of a sporting event or concert, there's a ticket broker who's beaten you to the punch.

It's now almost a year since ex- Gov. Eliot Spitzer and the legislature made scalping legal in the state. Many are wondering if that decision has kept average music and sports fans at home, while brokers who know all the tricks get the top seats and pull in big bucks.

Thanks to the Web, it's easy for almost anyone to become a ticker broker.

"I split season tickets with my friend," said Brent Landro, 28, of Brooklyn. "We sell them on the internet sometimes when we can't go. Usually on the Rangers ticket exchange, for the regular price or a little more- you can't get blood from a stone."

Concerts are already expensive for the average New Yorker, with tickets ranging from $50 to hundreds of dollars, plus service charges. But after brokers get a hold of them, expect to pay at least double, even 10 times the amount.

"It's almost like a season ticket holder has a license to print money," said Russ Haven, legislative council for New York Public Interest Research Group (NYPIRG.) "If you got two or four season tickets you can turn around and sell them and it becomes a commodity that you have by complete virtue of luck that got handed down in your family."

Spitzer's flip-flop As attorney general in 1999, Spitzer issued a scathing report on scalpers titled "Why Can't I Get Tickets."

"A system that provides access to quality seating on the basis of bribes and corruption at the expense of the fans without whose continued support the theater could not survive should not be tolerated," the report said.

Haven says no analysis was done before the law was repealed and New York joined 44 other states where scalping is legal.

"What's happening now is the average fan gets screwed and the market place gets skewed," he said.

Scalping = lower prices? While the prices you see on Craigslist and eBay tell one story, brokers contend scalping has resulted in lower ticket prices.

"Prices have come down because more and more people have access to the tickets now because they've legalized it and more people are selling tickets because there are more tickets being circulated," said Sandy Kyrkostas, CEO of Worldwide Event Group and TheTixx.com.

According to Haven, Spitzer changed his mind about legalizing scalping because of criticism from New York Times columnist John Tierney.

"Their crusade against ticket brokers has succeeded only in driving the industry out of state and making hot tickets even more expensive," Tierney wrote on May 18, 2001.

Recently, City Councilman Leroy Comrie introduced a bill that would force city-subsidized venues such as Madison Square Garden and Yankee Stadium to guarantee that 40% of tickets are sold to the consumer. If the law passes, concertgoers would have to prove that they bought their tickets at the venue.

Krykostas said that won't work because 90% of tickets are bought for someone other than the buyer.

"They can say whatever they want but we're the people who are buying the tickets," Krykostas said. "The brokers are the people who are making the shows sell out three or four times. We're the people buying the tickets. I don't know how they're trying to word it. They¹re trying to stop it so the consumer gets it, but the consumer is getting it on the secondary market."

Like Stubhub.com, which gets 15% commission on tickets sold on the site, Tixx.com takes in 12.5% of the tickets sold. According to Krykostas, most of the broker sites -- and there's dozens of them -- have all the same tickets because they come from one database.

So regardless where you look, orchestra seats for The Police at Jones Beach this summer will cost $2,100 minimum from a ticket broker -- face value $232.

And now, because the venues are seeing ticket prices explode on the secondary market, they are getting in on the action by raising the face value of tickets, much like Broadway did after "The Producers" craze.

Ticketmaster has become both a primary and secondary dealer of tickets. Besides its Stubhub-like TicketExchange, it also bought TicketsNow, the second largest online scalper site, for $265 million last year.

"Ticketmaster does a ton to ensure the fair and equitable distribution of tickets ," said Ticketmaster spokesman Joe Freeman. "We have invested a ton of resources in better securing the system, keeping it immune from the onslaught of automated computer programs that were hitting our system trying to cut the front of the line."

Gary Bongiovanni, editor-in-chief of the music industry magazine Pollstar, said secondary market prices have driven up face prices.

"That's part of why we have seen them more than double in the last year," he said. "The real market value is higher than what the artist is charging. Now there are other artists who don't want to charge that much. Springsteen for one. It's impossible for anyone to get a comp ticket. Then there are other artists who charge whatever the freight will bear. The Eagles have no problem charging a premium."

According to Pollstar, the average ticket price for the top 100 tours in 1996 was $25.81, but that has steadily climbed to $62.08 in 2007.

And while in the past ticket brokers would hire a kid or someone down on his luck to wait in line to snatch up tickets from the box office, their ability to snag seats to hot shows has gotten a big boost by technology.

Robot ticket-buyers Programs such as Broker 2.0 allow brokers to buy tickets in bulk by having multiple browsers running and constantly pulling seats from Ticketmaster as soon they become available.

"Even without that decent software technology the brokers have an advantage because they're working harder than anybody else to get those tickets, and if you put in something like that with the software that just, yeah, because most tickets are being bought on the internet now," Bongiovanni said. "If half the requests are coming from robots that represent brokers that's going to eat up a lot of the inventory."

"The Broker 2.0 software helps brokers purchase inventory, communicate with other brokers, and gauge demand on the fly with live streaming information," according to its Web site.

Krykostas doubts the programs are used widespread, but said "the internet changed everything because when something goes on sale you have eight million people trying to buy a ticket. It's not like the old days when you used to stand on line."

The idea that the web makes it hard to stop scalping is bogus, Haven said.

"The idea that once you had the Internet you couldn't regulate this on a statewide level is just a crock," he said, "because we monitor sites for gun sales and other kinds of illegal things in New York. To drive people to your Web site to sell tickets you have to advertise in some fashion.. you can monitor those things and crack down on them."

Some New Yorkers didn't think making scalping illegal has had much of an affect on prices.

"I bought tickets on eBay for Radiohead," said Olga Raskin, 21, of Manhattan. "I want to say the original price was 50 or something like that. I paid $250 for two tickets. ... If scalping didn't exist, I probably wouldn't have gotten the tickets."

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