Scalpers take Super Bowl business online

updated 12:55 a.m. ET Jan. 29, 2007

MIAMI - 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.

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