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Rival to Ticketron : Ticketmaster Emerging as Force in L.A.

Times Staff Writer

It was April 12, 1983--opening day for the Chicago White Sox--and Ticketmaster’s chairman, Fred Rosen, was worried that all 38,306 fans would be sitting in the same seat.

Fearing a last-minute snafu, the 41-year-old New York lawyer-turned-entrepreneur had come to Comiskey Park to see the fruits of his small, upstart company’s first major triumph over Ticketron, the nation’s giant computerized ticket agency.

For the record:
12:00 AM, Feb. 06, 1985 FOR THE RECORD
Los Angeles Times Wednesday February 6, 1985 Home Edition Business Part 4 Page 2 Column 3 Financial Desk 2 inches; 44 words Type of Material: Correction
In a Jan. 31 story about Ticketmaster Corp., The Times identified Peter Gadwa and Albert Leffler as founders of the company. The founders’ group also included Gordon M. Gunn III, Thomas W. Hart Jr. and Dan E. Reeter. Gadwa and Leffler are the only two original founders of Ticketmaster still working for the company.

“Seeing all those people there with your tickets . . . was like something out of fantasyland,” said Rosen from his Wilshire Boulevard office. “At the time, the company had a good name but it wasn’t respected.”

Then came Los Angeles.

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In July, 1983, Ticketmaster signed the Forum--home of three professional sports teams. Rock concert promoters Avalon Attractions, the Long Beach Arena and Entertainment Center and the Irvine Meadows Amphitheatre followed.

‘It’s Business 101'

Steadily nibbling away at chunks of Ticketron’s business, Ticketmaster now boasts of having captured almost a dozen of its competitor’s former clients, the most recent prize being the 6,250-seat Universal Amphitheatre, a Ticketron stronghold for 10 years.

“You don’t get very many chances to find somebody asleep at the switch, and in this case we did,” said Rosen. “What I’ve done is not brain surgery--it’s Business 101. It’s just a business that has been ignored.”

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Rosen says Ticketmaster, a privately held firm that does not disclose its earnings, has sold $30 million worth of tickets in Southern California since it set up shop here almost two years ago.

Reflecting on the company’s splashy start, Rosen said: “You don’t have to explain who you are every time you walk into a room anymore. Now, it’s not ‘Who are you guys?’ but ‘What are you doing?’ ”

So what makes Rosen--an admitted workaholic who once tried to make a go of his father’s gourmet dog food business--run?

“Money is some of it,” he says with a grin. “But it’s the game. I want to win.”

Founded in Scottsdale, Ariz., in 1976 by Peter Gadwa, a computer programmer, and Albert Leffler, a specialist in box offices, Ticketmaster initially licensed computer programs and sold the hardware for ticketing systems in other cities.

In 1982, Chicago’s Pritzker family (principal shareholders of Hyatt Hotels and Braniff Airways) became the dominant shareholders of Ticketmaster. It was at that time that Rosen was brought in as the chief executive and the company’s focus switched to the lucrative computerized ticket business.

Today, Chicago-based Ticketmaster Corp. operates in 30 U.S. cities plus Canada and Europe.

Rosen claims that Ticketmaster has also cornered two-thirds of the prime Southern California ticket market, something that Ticketron executives dispute.

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While they concede that it came as a blow when Ticketron lost its contract with the Universal Amphitheatre earlier this month, executives deny that Ticketmaster poses a major threat to the nationwide company that has dominated the business since it began in 1968.

“I have no question that we are and we will continue to be the No. 1 company out there,” said Ticketron President William Schmitt in a telephone interview from the company’s New York headquarters. “But you’re always concerned about your competition and you keep making improvements.”

Schmitt said a new computer terminal that can spit out tickets in seconds will be installed in Ticketron’s 700 nationwide outlets and box offices over the next two years.

Al DeJardin, vice president of Ticketron’s Western region, said: “It’s impossible to measure (the market). We sell more tickets than they do, even today. We are here to stay and we will make every attempt to acquire back the business that we have lost.”

90 Outlets in L.A. Area

Ticketron, a division of Minneapolis-based Control Data Corp., has 90 outlets in the Los Angeles area and sold 8 million tickets in 1984, according to DeJardin. Some of its clients include the Greek Theater, the Pacific Amphitheatre and the Los Angeles Sports Arena.

Both Ticketmaster and Ticketron have contracts with three of Los Angeles’ major professional teams--the Dodgers, Raiders and Rams.

“Ticketmaster is a more aggressive company,” said Marc Bension, vice president and chief operating officer of the Universal Amphitheatre, which has entered into an exclusive four-year contract with Ticketmaster. Referring to Ticketmaster’s monthly magazine and various promotions of upcoming events, Bension added: “They really go out and tackle the marketplace.”

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Louis Baumeister, who negotiated the Forum’s deal with Ticketmaster, said that, although Ticketmaster and Ticketron pitched a similar price for their services, he switched to Ticketmaster because Rosen was willing to give a little extra in other areas.

“We were looking to streamline our ticketing and accounting procedures,” Baumeister said. “There was a little reluctance on Ticketron’s part to take that step. Ticketmaster was willing to experiment and do it.”

Rosen, Baumeister added, “is a very energetic guy. When he tells you he’s going to do something, he more than likely will get it done.”

For George Matson, general manager of the Long Beach Arena, Ticketmaster was “a breath of fresh air.”

“They were just as much concerned with events that sell 100 seats as the ones that sell 14,000 in an hour,” Matson said, adding that Ticketmaster was willing to computerize the ticketing for local arts groups like the Long Beach Civic Light Opera, saving them money and the effort of having the tickets printed by hand. “And once the Forum switched, that added a tremendous amount of credibility to them.”

Ticketmaster’s Southern California operation includes 105 outlets in Los Angeles, Orange and San Diego counties and in Las Vegas. The company has also been successful in beating Ticketron to the punch for clients that have used neither company in the past: the Los Angeles Clippers basketball team, the Los Angeles Philharmonic and the Hollywood Bowl, for example.

Ticketmaster gets a service charge for telephone orders ranging from $1.50 for a Dodgers ticket to $3.50 for a concert, and a small percentage of the actual ticket price. A $1 handling fee is also added on when telephone orders are mailed to the customer. The charge at the outlets is somewhat lower.

$40 Million in Sales Seen

In comparison, Ticketron charges an extra $2.50 for rock concerts and Broadway shows for telephone orders (no handling charge for mailing) and $1.50 for Dodgers and Angels baseball games. At its outlets, the service charge ranges from as little as 95 cents for a ticket to the Ringling Bros. circus to $1.75 for a concert.

Ticketron’s DeJardin said that Ticketmaster’s higher service charges “helps them to create some of these deals that they have taken away from us. The public, in essence, is the one paying for these deals.”

Despite the higher charges, Rosen said he expects his Southern California operation to sell $40 million worth of tickets during 1985, turning a profit for the parent company by next year.

“The money is out there,” said Rosen. “There is something about L.A. . . . The distances between places makes the radio everybody’s friend. So music is more important to people.” And the booming concert business, Rosen said, is one reason the Los Angeles market is financially ripe.


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