SpursReport.com - Redskins Fans Waited While Brokers Got Tickets

Redskins Fans Waited While Brokers Got Tickets
By James V. Grimaldi
Washington Post Staff Writer
Wednesday, September 2, 2009

One night last fall, thousands of fans walked into FedEx Field carrying gold towels. From the opening kickoff, it was clear that they were not part of the Washington Redskins burgundy-and-gold. The towel-waving throng cheered for the Pittsburgh Steelers, so loudly that on some downs the Redskins couldn't hear quarterback Jason Campbell call the signals.

Redskins players and many others were puzzled that Steelers fans were able to get their hands on so many coveted tickets. For more than 70 years, the Washington Redskins have boasted that they have sold out every game. Seats are so scarce, the team says, that the waiting list for general admission season tickets has 160,000 names on it.

But the reality is that those who want tickets can often find them online through ticket resellers such as StubHub. And in recent years, the Redskins ticket office itself has sold tickets into this secondary market, making it easier for fans of opposing teams to invade FedEx.

Thousands of general admission tickets were sold to brokers, who resold them on the secondary market, often at higher-than-retail prices, according to interviews and internal Redskin documents. These were often tickets to the very seats that Redskins fans have waited years to get.

The Redskins acknowledged that the sales were made but said they were against team policy.

Redskins General Counsel David Donovan said the prohibited sales were discovered in the spring during an internal audit of last season's ticket contracts and involved about 15 ticket brokering companies. He said the ticket sales employees involved were disciplined. He declined to name the employees or specify the discipline because it was a personnel matter.

"Somebody in the ticket office was doing something they shouldn't have been doing, and when it was discovered, it was all dealt with," Redskins Senior Vice President Karl Swanson said. "If the story is, this is a scandal, uncovered by Redskins, verified by The Post, or whatever, yeah, we're telling you: People got tickets who shouldn't have gotten tickets, and they were dealt with."

Donovan said Redskins owner Daniel M. Snyder was unaware of sales to brokers. When he found out, Donovan said, "he was livid" and tried to have the accounts canceled immediately. :smirk

"When Mr. Snyder found out about it," Donovan said, "he made it clear to me that that was priority number one."

Snyder declined an interview request from The Post.

The Washington Post was able to document the sales by one ticket broker, ASC Ticket of Gaithersburg, which bought at least 5,000 tickets for nearly $600,000 during the 2007 and 2008 seasons, team records show. The tickets included 1,690 for general admission seats in the 100 sections of FedEx Field's lower bowl, among the most coveted seats in the stadium.

"We canceled at least a dozen accounts that collectively had hundreds and hundreds of tickets," Donovan said. He added that the numbers amount to a relatively small portion of the roughly 910,000 tickets that the team sells each year. "You do realize that there's 91,000 seats in the stadium," he said. "These are insignificant amounts."

The troubles in the Redskins ticket office provide a look into the high-pressure world of selling premium-priced tickets for a high-powered team. The practices illustrate how the burgeoning, Internet-driven secondary market is changing the way people get tickets to the best games, sometimes at the expense of loyal fans going through the team's own ticketing channels.

The crown jewel of Washington professional sports, the Redskins are one of the most storied and financially successful franchises in the National Football League. A ticket to a Redskins game has long been one of the toughest and most prestigious to get. Fans have kept season tickets after moving away and then traveled back for games.

The Redskins say that demand is so great for tickets that people spend five to seven years on the waiting list, which is only for those seeking season tickets for general admission seating. Generally, ticket holders who make it through the list are offered seats in the stadium's upper deck. At that point, they are considered off the list and have to negotiate with the ticket office to get better seats as they become available.

Donovan said someone in the ticket office could have diverted lower bowl general admission tickets to the brokers by using several account names. "Over the course of the year, if you're so inclined, you could siphon off hundreds of tickets, easily," he said. "There's no reason that person couldn't skate under the radar for quite a while."

The Redskins go to great lengths to maximize revenue. There are at least a half-dozen seating arrangements, from $44 upper deck general admission to $500 on-the-field "dream seats." Among the wide array of amenities are private bathrooms, climate-controlled seats and all-you-can-eat buffets.

The greatest demand is for the $99 lower bowl general admission tickets, which are close to the action and offer the best value. Season passes for these seats stay in families for generations. The Redskins work hard to channel the excess demand for lower bowl seats toward pricier options, such as the harder-to-sell premium tickets, which cost between $280 and $500 apiece. Premium tickets include the club seats in the gold band above the lower bowl.

ASC owner Jeff Greenberg, one of the brokers who bought tickets from the Redskins, told The Post that he was offered the lower bowl seats on the condition that he also buy club seats.

"I was forced to buy club seats," Greenberg said. "There were strings attached to this."

Donovan said most of the brokers' contracts for bulk tickets were canceled. But some brokers -- Donovan would not say how many -- have been permitted to continue to buy hundreds of Redskins season tickets because they demanded that their contracts be honored and threatened legal action.

"We don't have any problem selling tickets to fans," Donovan said. "We have 150,000-160,000 fans on a waiting list. We would much rather put tickets in the hands of fans than someone who flips them at a profit."

The NFL has no policies governing sales on the secondary market, league spokesman Brian McCarthy said.

Teams have sold directly to brokers for years -- just not publicly, said Don Vacarro, chief executive of Ticket Network, one of the larger online firms in the $2 billion secondary market. He has been a broker for more than two decades in the New York area.

"Teams and leagues don't want those tickets discounted in the primary market," Vacarro said. "On the secondary market, it's okay. It is aftermarket. Very standard."

This year, teams are struggling and offering more tickets to the secondary market, he said.

"I see major sports teams, the major leagues, are going to look to get tickets out, put butts in seats, without lowering the prices that their season ticket holders are paying," Vacarro said.
Fabled Waiting List

One of the things that gives the Redskins prestige is the team's waiting list, which goes back decades.

The general admission waiting list, which famously included Snyder before he bought the team a decade ago, is considered one of the Redskins' most valuable assets. It is held up by the team as a symbol of unwavering demand for Redskins tickets. The team has the highest season ticket-renewal rate in the NFL.

Bloggers, fans in online chat rooms and others have often expressed doubt that the list is as long as advertised, especially in recent years, as the team has gone through tough seasons and played only one postseason home game since winning the Super Bowl in 1992. In recent months, numerous people have contacted The Post and said they have been repeatedly solicited to buy Redskins season tickets, even though they did not sign up to be on the waiting list.

"Redskins are sold out -- in theory," said ASC's Greenberg. "This year, they sent letters to everybody on the lower level to add more tickets to their account. The Redskins have done a great job of keeping that aura that they're sold out."

Redskins officials defended the list but acknowledged that some people's names could be on it more than once. They invited a reporter to look at it. Located in a locked storage room, the list is a computer printout that occupies 16 binders kept in banker's boxes.

In the business of pro football, tickets are a major source of revenue, and different tickets benefit teams in different ways. The tickets that generate the most profit are for the premium seats -- both because they cost the most and because the teams don't have to share as much of the revenue with the NFL.

There is no wait for most premium tickets. At many games over the years, empty gold club seats were noticeable between the burgundy-colored lower bowl and upper deck. Swanson said about 5 to 7 percent of club seats remain available for sale this year.

Many teams rely on premium ticket sales and multiyear contracts to help line up financing for both stadium construction and the daily operations of a sports franchise. Snyder took on a hefty debt when he purchased the team for $800 million. FedEx Field was built for $210 million in private money.

In addition, teams that finance their own stadiums, such as the Redskins, usually are granted substantial relief from the league revenue-sharing agreement on premium seats. In general, revenue sharing requires teams to give the league one-third of the price of each ticket. In the case of the Redskins, that amount is capped at $33, even on premium seats that cost up to $500.

Premium seats also help teams compete with scalpers by offering fans with money alternatives when tickets become scarce and high-priced. But the higher prices make them harder to sell for routine games.

And FedEx Field, after seating expansions by Snyder, has among the most premium seats and suites in the league. There are 20,000 premium seats and 243 suites at FedEx.

Many of the people who end up buying premium seats signed up on the waiting list to purchase general admission tickets.

"I was trying to get one of the regular seats, in the regular part of the stadium," said Alonzo Webb, a 60-year-old investigator for the Department of Homeland Security. "They said that you had to go on a waiting list of thousands of people. However, they had seats available in the club section. There was no waiting list."

Ticket Broker's Tale

The story of one ticket broker shows how employees of the Redskins ticket office bundled club seats with general admission to make sales.

ASC owner Jeff Greenberg said a Redskins official first reached out to him in 2007 because sales agents were having trouble selling premium-priced club seats, with many fans declining to renew 10-year contracts signed when the stadium opened in 1997.

Greenberg, 42, who has been a ticket broker for 17 years, works out of a storefront in a building he owns in Gaithersburg. The company, which occupies two floors and has 12 employees, sells tickets at asctickets.com to concerts, shows and sports events in almost every major venue in the United States.

Constantly switching between his cellphone and land lines, he sits before three computer screens, listing every ticket he buys or sells.

The 2007 arrangement that Greenberg had with the Redskins covered 1,360 individual tickets that he bought for about $60,000, team records show. Most of them were general admission tickets -- 710 in the upper deck and 366 in the lower bowl.

In 2008, ASC bought 217 season tickets (for 10 games) and 2,000 seats to individual games during the season. About half of those seats were in the lower bowl, with most in sections 101 to 142. About 40 percent of the seats were premium, and the rest were in the upper deck.

Greenberg said the contracts required him to buy the premium seats for two years in exchange for being allowed to buy the 169 lower bowl season tickets "in perpetuity."

The ticket sales appear in printouts of an account with ASC's address in Gaithersburg, and the account is listed to Dennis Wipprecht, an employee of ASC. The Redskins account representative is listed as Jason Friedman, vice president for premium seating in the Redskins ticket office.

Wipprecht said Greenberg handled all of the dealings with Friedman. He said that many ASC employees acquire tickets for the firm in their own names and that over the past year, the team kept offering more tickets for sale. Greenberg confirmed that Friedman was his point of contact for the tickets.

Friedman did not return phone calls seeking comment.

The arrangements did more than just bundle premium seats with general admission seats. The ticket office also offered less-popular games with the understanding that the brokers would get tickets to blockbuster matchups.

ASC was sold hard-to-get tickets for games with popular opponents, such as archrival Dallas and Pittsburgh, as well as tickets for games that received less interest, such as against New Orleans and St. Louis.

"Many sports teams use the practice of tying in sales to non-popular games in order for brokers to buy popular games," Vacarro said. "Brokers would make premiums on the good games and make losses on the substandard games, but all in all they would net out a small profit margin."

Greenberg's firm sold 443 to last fall's Pittsburgh game.

"It really is very hard to get single-game tickets from the Redskins, especially for a game like Pittsburgh," Greenberg said. "So the only way you could get tickets to that game if we, the secondary market, didn't exist, would be if you bought whole-season tickets. But if you only wanted to go to one game, why shouldn't you be able pay whatever its worth?"

For Greenberg, the Redskins account for the biggest part of his business, but he said the tickets he bought from the team did not bring a significant profit. The bulk sales from the team were mostly a wash, he said, because club and premium seats typically were resold at a loss.

He said that he bought more than five times as many tickets from Redskins season ticket holders and that he made more money on those sales, reaping a 35 percent profit on $3.2 million in sales.

He continued to buy from the Redskins to preserve his access.

That changed early this year, when the team attempted to cancel his contracts for 217 season tickets. Greenberg had a theory about why the team canceled his contracts. "I don't think they were happy about the Pittsburgh game last year," he said.

Donovan said that was incorrect. "That's ridiculous," Donovan said. "How the hell would he know? Baloney!" :lol

Greenberg thought he had an enforceable contract, and he hired attorney Jack Garson of Rockville, who reached a settlement with the team this year that allowed ASC to buy about 150 season tickets (to two preseason and eight regular season games, for a total of 1,500 tickets).

The contracts with ASC were stamped with the signature of Mitch Gershman, the club's chief operating officer. But Gershman said he was unaware of the contracts until they turned up in the audit. "I did not personally sign any of those agreements," he said.

Donovan, the Redskins attorney, said that when ASC threatened legal action over canceled contracts, he argued that the agent who entered into the contracts was not authorized by the team.

"The problem was the terms of the contract were beyond the authority of the person who entered into the contract," Donovan said. "There were other issues with those contracts, which were beyond the authority of the salesperson. . . . One of those [issues] was sales to brokers."

Redskins ticket agents worked on commission at the time.

"The motive is money and laziness," Donovan said. "It is a lot easier to sell a package of 50 club seats along with 200 general admission tickets than it is to find 25 fans to buy two tickets each."

Some Redskins tickets sold directly to ASC previously belonged to season ticket holders who no longer could afford premium-priced tickets. Scores of people who tried to get out of their contracts were sued by the Redskins. In five cases examined by The Post, seats formerly belonging to season ticket holders who were sued ended up in ASC's inventory.

Club seat tickets once held by developer Randy Clarno were sold to ASC for three games last fall after the Redskins sued him for the balance of a 10-year contract that ends in 2016. Clarno said it was "unbelievable" that the Redskins would "resell the ticket and hang me up for $60,000."

Fan-to-Fan Sales Outlet

In addition to selling to brokers, the team sells a small number of tickets directly on StubHub, a popular Web site designed for fan-to-fan ticket sales.

Gershman said the team sells some tickets returned from 1,200 set aside each week for VIPS and the players and coaches of the two teams.

"The week of the game, there is a cutoff where your own players need to tell you how many you're buying," Gershman said. "We try to sell every one of them. We obviously are trying to accommodate fans who are trying to come to the game. This includes parking passes. We put them out on StubHub, but we try to do it at face value."

StubHub is advertised as a place where fans can buy tickets from other fans. In 2006, StubHub paid $5 million to the Redskins for a five-year contract to be the preferred marketplace for Redskins fans to sell tickets to other fans.

StubHub spokesman Sean Pate said the company's marketing agreement with the Redskins does not prohibit the team from selling directly on the Web site.

"It is not something that is part and parcel to the arrangement," Pate said. "It is up to the discretion of the team. We don't prohibit them from doing so."

The team's StubHub sales were made from an account called AS Interactive, with the AS standing for "alternate sales."

Separately, ticket office employees were also using StubHub to sell Redskins tickets. According to documents obtained by The Post, they used the pseudonym "Joe Redskin" in a Yahoo e-mail account to sell single-game seats on StubHub.

The Post obtained copies of e-mails outlining the sales of more than 50 tickets and parking passes worth more than $20,000.

More than two dozen tickets to the Nov. 3 Steelers game were sold from the Joe Redskin account, according to an e-mail. Some of the tickets went for more than double their face value.

Order 17908658 involved four tickets with face value of $79 each: upper level, Section 423, Row 1, seats 13, 14, 15, 16. The cost was $170 each for a total sale of $680.

"I have no knowledge of tickets being sold [by the Redskins] above face value," Donovan said.

The bottom of the automated e-mail generated by the StubHub system indicated that the check for the sale was made out to the Washington Redskins. The e-mail also said the check was mailed to a residence in Springfield that is the home of a former employee.

Redskins officials said they uncovered the employee sales on StubHub about the same time they found the broker accounts.

"We conducted an investigation, we took some actions against some employees, and that's really all I can say," Donovan said. "I'm not saying we took action against any employee regarding the Joe Redskin account, per se. There were issues in the ticket office with regard to broker transactions. There were issues in the ticket office with respect to sales of tickets by individuals on the club's account."

Former staff writer Jason La Canfora and researcher Julie Tate contributed to this article. La Canfora now works for NFL Network.

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