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The secondary ticket market was hit hard this week after bigtime ticketing player ScoreBig shut down its site and let go of most of its staff. They reportedly owe millions to brokers for unpaid tickets. The ticketing company is back in business but some think bankruptcy may be the end game for the upstart ticketing business disruptor.
The Los Angeles-based company works with clients of primary ticket sellers like Ticketmaster and AXS-Veritix and hundreds of independent brokers to sell discounted tickets to fans. ScoreBig's platform uses innovative buying technology that hides the identity of the seller.
On Friday, Sept. 23, ScoreBig pulled its site offline, turned off all of its social media accounts and laid off most of the staff. On Saturday afternoon the site was back online and tickets were again being sold. But the word was out that the company was seemingly going bust, which prompted some brokers to cancel tickets. Some buyers were starting to find their tickets were no good at venues’ gates.
Despite repeated attempts to reach executives at ScoreBig by telephone and email the company never responded. As of Wednesday, Sept. 28, the company was still selling tickets on its website.
The company has been on the market for some time. There was a reportedly a deal in the works, but it fell through leaving ScoreBig with no money to pay for the surge of tickets it's been buying from the brokers since the start of the summer. Brokers have been griping for months now that ScoreBig has not paid them or paid them a tiny fraction of what they are owed. Many brokers claim they are owed money ranging from $100,000 to $1 million.
“Ticketmaster was a partner with ScoreBig through our partner program," said Jared Smith, president, North America, of Ticketmaster. "Once the tickets were put on hold in our system we would then issue the ticket. We didn't handle any of the financial exchanges, we just issued the barcodes."
"Our Application Program Interface (API) was delivering verified tickets from our client inventory to ScoreBig," said Smith. "None of the tickets that came from the Ticketmaster API are impacted because tickets were delivered to buyers at the time of purchase. The API to ScoreBig has been shut down.”
"We absolutely had a partnership with ScoreBig and any tickets that were sourced directly from Ticketmaster on ScoreBig will be honored," said Smith. "Nobody who bought tickets from ScoreBig that came from Ticketmaster are out a ticket."
"This is the same problem that ails the industry overall," said Smith. "Tickets are easily reproducible and sold on unofficial marketplaces. When a ticket goes bad the venue is often left to clean that up and make good for the customer. We try to educate the customers that you should always buy your tickets from an official marketplace."
Graeme Laronge, owner of Hawks Tixx, Las Vegas, is furious with ScoreBig. He said they owe him over $150,000. "We were breathing down their throat all week," Laronge claimed. "They owe us a lot of money. They were paying me tiny amounts but not what they owed. I told them I was raising the fee five percent. Just like a bookie you need more juice to take on the risk. They said ok. They kept buying tickets. So I said, 'raise them another 10 percent'. And they kept buying tickets. Finally, we raised them 25 percent and they paid $920 bucks for a pair of Redskins tickets. They paid $250 over market value for the pair. I guess in their liquidity crunch they were using money to pay brokers a little bit to keep the tickets coming."
"ScoreBig has left both buyers and sellers in a very precarious position," said Gary Adler, executive director, National Association of Ticket Brokers. "Our understanding is that they basically ceased operations on Friday. None of the brokers or people they sold tickets to were told. They went radio-silent. Phones were disconnected, emails were returned."
"Over the weekend, brokers had no idea what was going on," said Adler. "We were faced with the decision of what brokers should do. It appeared they weren't going to get paid for tickets that were out there."
NATB recommended that the brokers do not cancel barcodes on tickets that had been delivered to consumers. "We know that there are countless brokers that did just that and didn't cancel tickets. It was a small minority that did."
"We continued to monitor the situation and sent a letter to ScoreBig," he said. "We have reiterated our position today that the brokers should not cancel tickets. In all fairness, though, you have to recognize that this has placed businesses in jeopardy. ScoreBig was a huge company with ties to the primary market with partnerships with primary ticketers like Ticketmaster."
"For BigScore to be in this situation is bad," admitted Adler. "But to not communicate with the people who bought the tickets and sold the tickets is outrageous and the most difficult factor in this situation."
Adler believes ScoreBig owes brokers millions of dollars. When asked about the current recommendation from NATB to its members about ScoreBig going back online and continuing to sell tickets, Adler said the official position of the NATB was non-intervention. "If it was me personally who is out hundreds of thousands of dollars I wouldn't put more tickets out there. But our official position is that the site is back up and it's up to the brokers. We're trying to get the word out that there are problems and alert buyers and sellers so they can make an informed decision if they want to do business with that company."
One thing is certain: some fans who think they bought legitimate tickets have been turned away at the gate. Several of those fans showed up at the Beyonce concert at Mercedes-Benz Superdome, New Orleans, on Saturday night. Some paid up to $950 for two tickets to see the superstar, only to find out their tickets were not going to get them in the gate.
"The ScoreBig fiasco has hit us," said Mark Arata, box-office manager at Mercedes-Benz Superdome. "We had a handful of tickets that were canceled at Saturday night's show. We traced the original accounts and they appeared to be out-of-market buyers who canceled their tickets. The people said they were bought through ScoreBig. Our position is that the ticket holder of record is the only person that can request a refund. If they took their tickets and sold them on a secondary market, it's buyer beware. They are not authorized markets and you are taking a risk if you are buying tickets through unauthorized channels."
"Every major shows gets ticketing problems with scams but this was out-of-the-ordinary," said Arata. "We had to tell the customers to go to the source of the ticket, there's nothing else we could do."
Drew Silver, Drew's Tickets, Sherman Oaks, Calif., has also been tangling with ScoreBig. "They owe me a lot of money," said Silver. "And they owe a lot of other people a lot of money."
"On Friday they fired everybody and closed down shop," said Silver. "There was no warning. I've been using them for the last six months, but the last few months they've been struggling to get us paid."
Silver said they started paying him less than he should have gotten months ago and last month stopped paying completely. "They said they were going to send checks out last Friday but that was a lie. I've received no check."
"I reached out and no one is answering the phone. They turned off all their social media. The headquarters has been emptied and shut down. When I called the ticketing office (on Friday) they told me the company was closed."
"Someone I know went to their offices in Hollywood and said it was empty. There are normally 40 to 50 people there. My guy saw a handful of people who said they laid-off 90 percent of the staff and told everyone they were closing."
When told ScoreBig was still selling tickets, Silver was not surprised. "Just because they are closed doesn't mean they aren't still selling tickets and ripping people off."
Silver said he is out $100,000. "I'm going to wait and see what happens as far as legal action," said Silver. "ScoreBig says they are looking for a buyer. But the chances are slim to none that they will find one. I've heard they've been looking for months now and no one has been interested. Maybe someone saw their books and realized they weren't making any money. They raised $50 million in capital; where all that money went no one knows."
"Obviously I hope I get paid and the people who bought tickets get into the venues. It's bad for everybody in the system if this this goes south."
Laronge said he tried for months to get the funds he was due only to be shut down by ScoreBig. He said he eventually even threatened to send an email to all 650 members of the National Association of Ticket Brokers (NATB) with the title, "Beware of ScoreBig's financial situation. Use Caution." Laronge eventually canceled many of the tickets he issued to ScoreBig."
"I don't care if canceling is right or wrong," said Laronge. "I sold a ticket to ScoreBig and they sold the ticket to whoever they want. The customer can file a charge-back when they get to the gate. Is it a bad thing for the secondary ticket market? Yes. I don't care. I'm a little peon compared to Ticketmaster and StubHub."
"There's going to be hundreds of people that get denied at the gate. I can afford to eat the $150,000 but why would I do that when I can mitigate it down to $50,000?"
Many angry customers have taken to social media to complain.
"This company is a complete scam," said Eric Johnson in an online rant. "I bought tickets to a football game months ago and what they do is create a shipping label immediately so they can charge for the tickets, but they don’t actually ship the tickets at that time because they don't have them. I mailed them and every time I get a response within an hour stating that my tickets would be available one week from the event. Now it is 3 days until the event and I emailed them multiple times and now I get no response. If you call their fake customer service line they put you in a fake queue for 10 minutes at which time they send you to voicemail."
"We were ripped of our $1,800 in tickets from a Monday night football game. Nobody has returned my call since," said David Wasserman on Facebook.
Thomas Hobbs said on Facebook, "Do not use this company they sell fraudulent tickets and won't refund your money!!!!!!!"
ScoreBig raised $18 million of Series D fundraising, led by Heart Ventures, two years ago. They got another $50 million in funding from Venture Capital groups Bain Capital and Checketts Partners even more recently. The company was founded in 2009.
Interviewed for this story: Jared Smith, (310) 300-3893; Gary Adler, (202) 552-5363; Graeme Laronge, (702) 202-6116; Drew Silver, (818) 990-9170