The Biggest Game in Town
A single seat for $35,000? How does this happen, and does it hurt the fan? Inside the high-stakes, high-stress world of ticket brokers.
(Photograph by Erik Jacobs)
ACE Tickets CEO Jim Holzman, photographed at Fenway Park.
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With about eight minutes left in Game 5 of the NBA Finals, the Lakers are leading the Celtics by 12 points in Los Angeles. At home in Newton, Jim Holzman is turning his attention from his TV to his computer. It's nearly midnight on Sunday, and with the Lakers heading toward victory - they ultimately win, 103-98 - the two teams will be returning to Boston for Game 6 and, just maybe, Game 7. For Holzman, the 48-year-old chief executive of Ace Ticket, the night is just beginning.
For weeks, Holzman has been buying up finals tickets from Celtics season ticket holders, paying far more than face value. At this moment, Ace Ticket holds nearly 250 seats for Tuesday's Game 6 - and if the Lakers force a seventh game on Thursday, Holzman has 250 seats to that one, too. He's spent roughly $750,000 acquiring the seats, using a line of credit secured by his home. So far, it's proved a good investment. As the Celtics are hitting the showers in LA, Ace's cheapest seats to the next game are listed at $659 each, and its best courtside tickets are each priced at $34,500. And with tip-off in just 45 hours, Holzman plans to keep buying, selling, and repricing right up until game time. This night, he stays at his computer until 3 a.m.
It's become a familiar scene during the last year. With the Red Sox, Patriots, and Celtics all playing for championships - and even the Bruins in the playoff s - there's never been a better (or a more nerve-racking) time to be a Boston ticket broker. And with seven storefront locations, 35 employees, and more than $30 million in annual revenues, Allston-based Ace Ticket is the city's dominant player. "Out of the entire country, Ace probably has the strongest local presence we've seen of any local ticket brokerage," says Sean Pate, a spokesman for StubHub, a nationwide online ticket venue.
Ordinarily, Ace and its competitors make the bulk of their profits by selling tickets to regular-season sporting events and concerts, usually after purchasing them from individual ticket holders at a markup. But when teams play for championships, sports fans go a little crazy, giving brokers like Holzman the opportunity to put up championship numbers of their own. In the early rounds of the NBA playoff s, Holzman mused aloud that if the Celtics made it all the way to the finals, his profits might be enough to put his three children through college.
As in most businesses, however, big returns require big risks. Sure enough, in the days leading up to Game 6, Holzman was buying prime tickets for as much as $25,000 apiece, betting on his ability to resell them at a higher price. "That's the great unappreciated aspect of ticket brokerages," says University of North Carolina at Charlotte economist Craig Depken, who's studied the industry. "Brokers face a lot of pressures, especially in sports markets that are hot."
Despite the risks, brokers have reason to smile. For decades, scalping was an unglamorous street-corner business that was outlawed in many states, including Massachusetts, where a 1924 law that's still on the books forbids reselling tickets for more than $2 above face value (plus "reasonable expenses"). "Ten years ago, we were . . . pretty much scum of the earth," says Seth Sharrin of Gold Coast Tickets in Chicago. But since then, the Internet has made ticket reselling ubiquitous, and while authorities still hassle scalpers who work near stadiums, they rarely go after Internet resellers or professional brokers. Many officials consider scalping prohibitions virtually impossible to enforce because the practice is so widespread and because it's seen as a harmless transaction involving consenting consumers. The industry's credibility has also risen due to an influx of corporate titans, including StubHub (now owned by
That rising legitimacy doesn't necessarily mean that brokers are good for fans, however. Critics say they hoard tickets and artificially boost prices - and it's an argument that's grown louder as Massachusetts legislators have debated whether to pass a pro-broker bill that would remove the ban on ticket reselling once and for all, an issue that has involved Holzman in a lobbying controversy.
But all that seems far away on the morning after Game 5. Holzman and his staff are furiously working the phones. While the office lines buzz, Holzman's personal cellphone rings with calls from his best customers - including an auto dealer named Phil, who wants four tickets. "Right now your kind of stuff is going for $8,000 to $12,000," Holzman tells him matter-of-factly, referring to tickets with a face value of $2,000. A few minutes later, he jokes with another client who forgot where his seats were. When he's off the phone, though, Holzman is quietly concerned about what could go wrong. Maybe he's priced some of his highest-end tickets - like the 21-seat luxury box he's listed at $35,000 - a little too aggressively. Maybe the stock market will drop steeply this afternoon, causing people to hesitate before spending thousands on a basketball game. "The biggest fear you worry about since 9/11 is a terrorist-related report," he says, since that would make people fret about going to a big sports venue. "The chances are slim, but if your house was riding on it, you'd be worried." And until his last ticket is sold, Holzman's worries will be constant.
Jim Holzman was raised in Newton, and since childhood he's been a maniacal sports and music fan. In 1975, at age 15, he camped out for World Series tickets and was in Fenway's "standing room only" section when Carlton Fisk hit his famous 12th-inning home run. Four years later, Holzman was a student at Northeastern and working in a shoe store when he heard a rumor that Bruce Springsteen tickets were going on sale. After calling in sick, he joined a long line. Holzman planned to buy only two tickets, but the box office was offering four per person. As he waited, he had an epiphany. "This is crazy," he thought. "If I buy four seats at $20 each, and sell two of them at $30 each, I could have my ticket for free. So that's what I did. That was the beginning of me learning that this is a commodity."
During the next two decades, Holzman worked as a shoe company executive and rock band promoter and cofounded a business that made promotional products. But all the while, he moonlighted as a ticket broker. He never sold tickets outside venues; instead, he'd advertise in PennySaver circulars or on bulletin boards in grocery stores. Each evening, he'd drive to suburban parking lots to exchange tickets for cash. "My father said to me, 'You're going to get shot,' " he recalls. By 1995, he'd dropped his day job and had opened an Ace store on Route 9 in Brookline.
Today, Holzman works from an office in Allston just off the Mass. Turnpike. Its lobby is filled with copies of ESPN and Rolling Stone magazines, along with a thick binder of thank you letters from charities; this year, Holzman plans to donate about $250,000 in cash and unused tickets. The ticket donations aren't driven by altruism alone. On any given day, Ace has roughly 100,000 tickets worth $5 million in its inventory, and the clock is always ticking - just as a grocery store reluctantly discards tons of spoiled food, unsold seats are the bane of the industry. "There are plenty of Red Sox games this year that we've lost money on," says Harry Hatz of Hub Ticket Brokers in Brookline, one of Holzman's rivals. Although weather is the primary risk for sporting events, there are also risks in theatrical events. In June, for instance, Holzman had already spent $60,000 on seats to New Kids on the Block reunion shows without any sense of how big a draw the just-resurrected band might be. Holzman has lost as much as $50,000 on tickets to a PGA golf event that failed to catch fans' interest, and he routinely loses $10,000 or more when tickets to a Sox game fail to sell because of lousy weather forecasts. The day after Tom Brady's knee injury earlier this month, Holzman said prices for all Patriots tickets could drop by 30 to 40 percent.
One perk of the business is that Holzman often keeps the best seats for himself. He attended every home World Series game in 2004 and 2007 and has missed only one Patriots Super Bowl. Even in his personal life, he's obsessed with getting good seats: When he takes his three children for a ride on the Swan Boats, he counts the number of people in line, calculates the number of seats in each boat, then lets people cut ahead so his children can sit in the front row.
His profession can also create mixed loyalties. Although he's a diehard fan of Boston teams, come playoff time, Ace will often make more money if the Sox or Celts lose a few games, thereby forcing a playoff series to go to the maximum number of games. Holzman admits feeling conflicted over this. In fact, when it became clear Ace would benefit if the Lakers won Game 5 of the NBA Finals and forced the series back to Boston, Holzman personally wagered $18,000 on the Celtics through a friend in Las Vegas, just so he'd feel better if Paul Pierce, Kevin Garnett, and company won the title in LA.
Among rival brokers, Holzman is best known for his marketing panache. Instead of using a courier service to deliver last-minute tickets, Holzman employs four drivers who travel in cars covered with Ace's logo. (Two friends say Holzman has discussed schemes to park Ace cars in locations where they might be flipped over or burned by rowdy fans during victory celebrations, hopes the images would make the news.) Ace's ads are all over sports radio and cable TV, and early this spring, Holzman signed a deal to put his billboards inside Fenway Park. In return, the Red Sox have designated Ace as its preferred off line ticket reseller. (Disclosure: The Globe's parent company, The
Lately, however, Holzman has been getting attention he'd just as soon avoid. In April, the Globe reported that the Massachusetts Association of Ticket Brokers had hired a financial adviser to Massachusetts House Speaker Salvatore DiMasi to lobby on behalf of a bill to legalize ticket reselling. The lobbying deal was problematic for two reasons. The financial adviser, Richard Vitale, hadn't registered as a lobbyist, as required by law, and he'd loaned DiMasi money, an apparent violation of state ethics rules. "We hired a strategist to help advise us - we're novices in the political process," says Holzman, who was reportedly a key player in the deal. "What happened beyond this with Vitale and DiMasi, we're really not privy to." Whatever the back story, the move clearly backfired. Although the House passed a bill that would legalize ticket reselling, the measure failed to win Senate approval during the most recent legislative session - and with the lingering DiMasi controversy making legislators wary of doing anything that might help ticket brokers, the bill's prospects are mixed at best.
IN A WAY, IT'S TOO BAD THE LOBBYIST controversy overshadowed what could be an interesting debate. At issue: Are ticket brokers like Holzman ultimately good or bad for consumers and society?
"I think it's a dirty business, and I think consumers are getting screwed," says Edgar Dworsky, a former Massachusetts assistant attorney general and the founder of ConsumerWorld.org, an Internet consumer resource guide. Like other critics, he believes lawmakers should limit brokers to selling tickets for no more than two times the original face value. That's hardly the case today. Consider seats to the Sox season finale against the Yankees next Sunday: As of late last month, Ace's cheapest bleacher seats, which carry a face value of $26, were offered for sale at $159 apiece.
Brokers counter that in an era of Craigslist, it would be impossible for authorities to police what people are charging, and that a Massachusetts price cap would have little impact on out-of-state players like StubHub. (Indeed, Holzman says if Massachusetts ever decided to enforce a ban on ticket reselling, he'd reluctantly relocate Ace Ticket to New Hampshire.) Brokers also say that in a free-market system, tickets shouldn't be subject to any more price restrictions than other goods or services. Critics say that since many sporting events and concerts take place in arenas financed in part by tax dollars, tickets should be made affordable for ordinary taxpayers to see a show or a game, and they claim the unenforceability argument is overblown. "All you've gotta do is whack a few, and they'll fall in line," says Colman Herman, a Dorchester-based consumer advocate who filed a lawsuit against a Weymouth ticket brokerage in 2005 that's on appeal.
Economists who have studied the industry, however, have slowly concluded that brokers serve a useful purpose. When academics first examined the so-called "secondary ticket market" in the '70s, they initially believed scalpers served to artificially inflate ticket prices by increasing demand. But Depken, the North Carolina economist, says that newer studies have taken a more nuanced look at the role brokers play. In a normal free market, sports franchises and concert promoters would simply raise their own ticket prices to whatever buyers are willing to pay, squeezing out the brokers. In fact, though promoters and franchises have raised prices, many brokers are still thriving, so economists began exploring why.
One hypothesis suggests that sports teams worry about the negative public reaction of charging whatever the market will bear for seats, so they intentionally keep prices low to avoid the backlash, which inadvertently allows brokers to flourish. Other studies focus on how brokers mainly cater to "executive fans," who don't need to make plans or stand in line and are willing to pay brokers a premium. Depken's own study, published last year in the journal Public Choice, concluded that pro baseball and football teams in states with strict anti-scalping laws charged slightly more, on average, for seats. "When you ban the scalping, prices go up," he says, "and when you allow the scalping, prices go down."
Sports teams have differed in how they regard brokers. The Patriots are notoriously hard-nosed. Says Herman, the consumer advocate: "The only one who's got any testicles about this is [owner] Bob Kraft." The Pats have filled suit against StubHub for reselling tickets (the case is pending), and Pats officials have been known to conduct sting operations, buying marked-up tickets online and then permanently revoking the season tickets of the original owners. However, a Patriots spokesman says the club's attitude is driven less by economics than by concern over hooliganism and drunken misbehavior at games. By limiting resales, they hope to keep better tabs on who's actually in the stands, and the Pats say arrests, fights, and rowdiness have dropped sharply since it began cracking down on ticket resellers.
The Red Sox take a more studious approach. The team is working with a group of Harvard professors to study the relationship between the club's tickets' face value and what brokers are charging. For instance, the economists found that for big games, the Red Sox could easily sell their $12 bleacher seats for $80 or $90. The team says it used the data to employ a Robin Hood strategy in which it keeps prices low on many seats to give families access to Fenway, but pushes up prices on prime seats (to as high as $325 a seat) to better reflect their true market value. "We've 'taxed the rich' by going aggressively after the corporate customers," says Sam Kennedy, the club's chief sales and marketing officer.
In theory, sports teams could probably put a big dent in brokers' business if they sold seats game-by-game at different prices, depending on the desirability of a game - the kind of "yield management" system used by airlines and hotels to manipulate prices based on demand. They could also limit reselling by reducing the number of season ticket holders, who serve as the main suppliers to brokers like Holzman. In fact, with help from its professor- consultants, the Sox have begun experimenting with "dynamic pricing," in which they vary the prices based on demand, for a few Green Monster seats. But the team plays with prices cautiously, cognizant that if the team stops winning, it could face a backlash from fans who have felt gouged. Referring to the club's fabled sellout streak - 456 games at press time, which broke the Major League record - Kennedy says: "We know how fragile this really is; it could all go away tomorrow."
Mike Maddaloni, a Chicago-based Internet consultant who's been a Patriots season ticket holder since 1993, runs the Patriots fan site and blog GoPats.com with a friend. When he can't make a Pats game, he sells his seats only to trusted friends at face value, so he doesn't risk getting his tickets revoked. But he has used a broker to buy Sox tickets and once paid three times the face value for grandstand seats. He also knows what it's like to get shut out of big games because of inflated prices. But overall, he says of brokers, "I understand the business. . . . They're providing a valuable service."
For his part, Holzman hews to the industry's standard talking points. "At the end of the day," he says, "I don't decide how much a ticket is going to sell for - the public demand does, just like any other item."
BACK IN HOLZMAN'S OFFICE, IT'S nearly noon the day before Game 6 of the NBA Finals. During the last three hours, Ace has received more than 200 calls from potential buyers, along with 67 calls from sellers. Holzman's staff has sold 50 tickets and bought 30 more. The market is particularly brisk for "get-ins" - industry lingo for cheap seats that allow a fan to get in the door - which currently hover around $700. Sales are also solid for the cheapest lower-level seats, priced around $1,400. Business is a little slow at the higher end, so Holzman punches his keyboard, taking his $5,000 seats down to $4,800. Then he clicks to a different screen where he can track his telephone reps' conversations. When a line turns red, it means the rep is taking a call; when it lasts longer than three minutes, it's likely he's making a sale. "Everybody is red now," he says, smiling.
In his joking banter with clients, he makes ironic references to Ace's various ad slogans, mimicking the patter of a car salesman. "This is Game 6, history in the making," he says to a client named Henry. "You're not buying a ticket - you're buying a memory, and there is no price on memories." Since there are spouses who disagree with that sentiment, Holzman says his sales reps routinely let clients split a purchase between multiple credit cards or pay partly in cash to obscure the real cost. For other buyers, money appears to be no object: At one point, Holzman sells three tickets to a longtime client who asks about the location (10 rows behind the basket) but doesn't bother to ask about the price (the seats are $2,500 apiece).
While Holzman spends the morning dealing mostly with buyers, every third or fourth call is from a client who's hoping to sell. Industry critics charge that many ticket brokers obtain seats by using special software that allows them circuitous access to Ticketmaster, effectively letting them cut in front of the public and hoard seats. (In fact, Ticketmaster filed suit against a software company alleged to sell such a system.) Holzman and other brokers deny using these tricks. Holzman says most of his seats come from a loyal cadre of around 2,000 clients, mostly season ticket holders and avid concertgoers who have been selling to him for years.
On the phone, Holzman offers $2,000 apiece for four seats to an acquaintance in Connecticut. A few minutes later, he responds to an e-mail by offering $3,200 apiece for four seats to another longtime client. Meanwhile, his chief buyer, Matt Freedman, spends $14,000 to grab a pair of second-row, center-court seats that elicit a whistle from Holzman. "Those are beauties."
At moments like this, Ace resembles Wall Street trading desk. And just like investors, ticket brokers admit they make mistakes based on emotion, fatigue, and adrenaline. "When [prices] are going up, you have this 'It's never going down' philosophy, and there's always a point where you're buying at the top and regretting it," says Jason Berger, a broker for AllShows.com in Greenwich, Connecticut.
There are also times when the market can reverse quickly. A few days earlier, tickets the previous night's Game 5 in Los Angeles had been selling for $500 to $60,000 apiece. But after the Celtics' historic comeback victory in Game 4, Lakers fans' interest Game 5 dipped, and ticket prices fell to $125 to $25,000. Luckily for Holzman, Ace handled few tickets for the games in LA.
Just after noontime, he calls five key staffers into his office for a quick meeting. "This is actually getting bigger and bigger," says Al Smith, Ace's sales manager. "I think we ought to talk about, one, buying more seats, and two, raising the prices on the uppers," referring to the upper-level seats. Holzman's corporate account manager says hotel concierges have been calling all morning seeking tickets. After some debate, Holzman says he intends to hold firm prices for the "get-ins" but is considering slight price cut on lower-level seats. "Let's see what happens in the next 60 or 90 minutes," he says, "and let's go from there."
It's now 33 hours until tip-off. "The stress and the pressure build as the hours go by," Holzman says. "We've bought a lot of seats today, and we're selling a lot of seats. So we've got to keep it going."
AT EXACTLY 8:20 ON TUESDAY NIGHT, 40 minutes before the start of Game 6, Holzman completes his last sale: $10,000 for a pair of 12th-row, center-court seats. And with that, Holzman shuts down his computer, hops in his car, and drives to the Garden. He and Freedman watch the Celtics win the title in a pair of front-row seats, for which Ace has paid $7,500 apiece. "It was worth every penny," Holzman says.
A few days later, he stares into his computer to assess his last few weeks of work. All told, Ace managed to sell approximately 500 tickets to Game 6, meaning that roughly one in every 37 people who witnessed the championship victory bought a ticket from Holzman's operation. At the peak of the pregame frenzy, a few hours before tip-off , the "get-in" tickets, with a face value of $55, were commanding $725 apiece.
Not every deal Holzman struck in those hours was a winner. In his highest-priced sale, he sold two front-row seats for $14,000 apiece - but weeks earlier, he'd paid $25,000 each for those seats. He also sold some seats too soon, expressing particular regret for letting a client buy a pair of $5,700 seats a few weeks earlier that could have commanded at least $10,000 closer to game time. But overall, it's hard to complain. He figures his net profit on the three NBA Finals games played in Boston totaled around $200,000 - and from the Celtics' entire playoff run, he's netted $300,000. "I'd call it a stand-up triple," Holzman says. "There were long hours, long days, and lots of stress, but a great reward." His children's college funds are in nice shape.
That doesn't mean he intends to let up. As the glow of the Celtics' title fades, his computer screen is filled with listings for tickets for Red Sox games and summer concerts. "When I go to bed tonight and my head hits the pillow, I'll be thinking of the seats I have for tomorrow night's game, and what I have to do to get rid of them," he says. If Boston sports teams continue playing the way they have, he should have no shortage of takers.
Daniel McGinn is a Boston-based national correspondent at Newsweek. Send comments to magazine@globe.com.
HOW TO GET IN? A BROKER'S TIPS
After nearly 30 years as a ticket broker, Jim Holzman knows the ins and outs of every Boston-area sports and music venue. (He also knows how to sell.) Here are his tips for getting good seats at a great price:
* Exploit the weather. For outdoor events, demand ebbs and flows based on the forecast. If meteorologists predict rain, prices dip - and sometimes it's worth taking a gamble that the rain won't come. For the Pats, a forecast of rain makes ticket prices dip more than winter weather.
* Exploit the calendar. Generally speaking, weeknight tickets are cheaper than weekends or Sunday night events, which are popular, since people figure they'll face less traffic and parking headaches.
* Find value at Fenway. Some of the best deals are in the infield grandstand, where tickets carry a face value of $50. "That has the same perspective [as a seat] 10 rows in front of you that costs $100," Holzman says. For families, look in grandstand sections 32 and 33, alcohol-free zones.
* Don't sit. The best way to see the Patriots for less is to buy standing-room-only tickets, which carry a face value of $49. "If you get there early enough, you can grab yourself a pretty good spot," Holzman says.
* Cross your fingers. While Celtics tickets will be hard to come by now, the team always sells a few tickets to every regular-season game for $10. The other consolation: "There's really not a bad seat in that building - you get a clear view for the price," Holzman says. Ditto for the Bruins.
* Think outside. For music, Holzman's favorite places to see a band are at the
* Forget about market timing. Want tickets to the 2009 Super Bowl, regardless of who's playing? Brokers are already selling them; at midsummer, prices started at $2,800. But there's no ideal time to buy a ticket to a big game like this. "You never really know - it's almost like buying a stock," Holzman says. His advice: Buy a ticket at a price you're comfortable with for a seat you'll be happy to sit in, then don't stress out over whether the price moves up or down after you buy. - D.M.
