Need Tickets? Get in Line, as Emails Reveal How Brokers Get First Crack at Tix for Big Arena Shows

ISSUE 28 2018 - ONE TIME USE ONLY - DO NOT REUSE
Illustration by Remie Geoffroi
    

Country star Eric Church and his management team are known for pushing back against ticket scalping; on his 2017 tour, they canceled the tickets of brokers and those they suspected were professional resellers.

But this October, a little over a week before Church's upcoming Double Down Tour stop at Staples Center in Los Angeles went on sale to the public, secondary ticketing firm DTI emailed ticket brokers to notify them of a chance to buy Church tickets for resale, asking for minimum orders of 60 seats at $137 a pop -- the same price that would be offered to fans.

"Exclusively for active DTI members, I have a small window to help you acquire Eric Church," wrote Jason Lai, vp partnerships at DTI Management, in the email.

Lai cautioned that "due to the fact that it is Eric Church, there are no guarantees of the request being fulfilled." But Lai knew that Church would have a hard time canceling the tickets being offered for his L.A. shows because they were part of Staples Center's Premier section. The collection of 2,500 seats along the upper perimeter of the lower bowl is first offered for purchase by Staples owner AEG to individuals who have already paid as much as $18,000 per seat for tickets to the four sports teams that play at the arena. Staples' Premier seat program is similar to season-ticket platforms offered at nearly every other arena and amphitheater in the United States.

"Given that Eric Church works so hard to make sure that great seats go to real fans at face value, it's disconcerting and incredibly frustrating to hear that venues may directly distribute large numbers of tickets to huge resellers," says Fielding Logan, who heads touring for Q Prime South, in a statement to Billboard, adding that he was "disappointed but not surprised" to learn about DTI's access. "We've always said resellers like DTI have more experience, expertise and resources than real fans, and this is just another example of that."

Church isn't the only one to have his concert tickets offered to member brokers of DTI, a technology company created by CEO Curtis Cheng that works with brokers to pool money and take large positions in inventory for both concerts and sports teams. Billboard obtained similar emails that show DTI offering face-value tickets before public onsales to shows by artists like P!nk, Ariana Grande and Elton John after Premier seat owners had not bought them.

Cheng confirmed to Billboard that DTI holds around 200 Premier seats at a value of $2 million -- part of a five-year deal he negotiated in 2016 with Staples Center's premium-seating department, though he believes other brokers have bigger holdings than he does. While the Premier seats cover sports, concerts are treated like an added option, with seat holders granted first right of refusal to buy tickets. The access to Church tickets that Lai was offering to DTI brokers had already been passed on by the investors who funded Staples Center's seven-figure deal with DTI. If DTI's brokers also passed, the seats would be put on sale to the public.

AEG executives say ticket prices in the Premier section are set by the promoter, and that premium seating programs like its own are an industry standard. But DTI's deal with Staples offers a new window into how professional resellers are getting access to tickets before the public, often without the artist's knowledge.

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Cheng also said his interest in the Premier section was built around LeBron James signing with the Los Angeles Lakers in 2018 and the potential to make money on Lakers tickets. Cheng said his agreement with Staples Center was struck after Kobe Bryant retired in 2016, with Cheng making an early bet that James would sign with the Lakers.

While Cheng doesn't recall how many tickets on Church's Double Down Tour were purchased and resold by DTI, he says he didn't think there was a big windfall for his brokers. Seats in the same sections for which DTI brokers paid $137 per ticket are selling for half that price on Staples Center's site.

It's only getting tougher to make money reselling, as DTI and several other firms disrupting the ticket broker business get more competitive and spend millions to buy up ticketing rights from teams. Sports executives like these agreements because they guarantee money upfront and push the risk onto brokers, who usually only profit if the team reaches the playoffs.

But it's also easy to rack up losses, and Cheng tells Billboard that he probably won't renew the Staples Center tickets when his deal expires in 2020. Instead, he plans to shift his company into technology that looks at resale opportunities in all sectors. In 2016, Cheng raised $75 million from CVC Growth Fund to build a scalable resale and listing platform that he hopes will diversify DTI beyond sports ticketing, which is overheating.

"You're better off making a bet on a team in Vegas," says Cheng. "The odds are stronger and there's a lot less to lose."

This article originally appeared in the Dec. 15 issue of Billboard.