Rosen’s Key to Show Biz: He Has All the Hot Tickets : Marketing: The chief of Ticketmaster took a shaky company and turned it into the industry giant through his computerized service.

Fredric D. Rosen doesn’t seem like a man well connected to the entertainment industry. Athletes and entertainers, whose posters dot his walls, never visit his Mid-Wilshire offices in Los Angeles, and he spends most of his time encamped with telephones and computers.

But as chairman and chief executive of Ticketmaster Corp., the pugnacious Rosen has become a key part of the entertainment field by marketing a unique computerized ticketing service that has made his once nearly bankrupt company one of the largest such operations in the world.

Along the way, Rosen, 47, has dramatically affected the way many events--including sports and live concerts--are promoted. This month, for example, his firm begins hawking music videos along with some concert tickets. But the former corporate lawyer has also emerged as a controversial industry power broker--an entrepreneur who manages access to the best seats in the house, for a price.

“Fred Rosen is the type of individual who people feel very strongly about,” said admirer Brian Murphy, president of Avalon Attractions, Southern California’s largest concert promoter. “They either love him or hate him. But he’s got the biggest ticket-selling operation in the country; the reality is you deal with him” because his system is so good.

But the system, which uses computers and 650 telephone sales agents to market tickets, has come under fire from some Washington state consumers and New York lawmakers who complain that Ticketmaster adds fees as high as 55% to the base price of a ticket and doesn’t refund those fees when events are canceled. Ticketmaster has also enraged rival Ticketron, whose chairman--Washington sports mogul Abe Pollin--says Rosen is the only businessman who has made him mad enough to sue.

Rosen, who notes sheepishly that “when you get big, people take pot shots at you,” calls the claim of high service fees “unwarranted, because people are paying for service.” He says that consumers “can go to the box office” to avoid fees.

As for Ticketron, which computer giant Control Data Corp. recently sold to an investment group headed by Pollin, Rosen observed: “Ticketron is a dinosaur. People are dissatisfied with their service. Their technology was 12 years old in 1980.”

Battling opponents is nothing new for Rosen, who said he knew little about the ticketing or entertainment business in 1982 when he undertook some legal work for Ticketmaster, which is owned by Chicago’s wealthy Pritzker family. He said he takes his business cues, not from law or business manuals, but from the ancient Chinese book “The Art of War,” by Sun Tzu.

Since becoming head of Ticketmaster in 1982, Rosen has used aggressive tactics to boost the company’s annual revenue to about $80 million from $1 million. Last year, Ticketmaster sold 25.6 million tickets by mail and from 850 outlets in 37 states.

Ticketmaster grew largely at the expense of Ticketron, which last year had a loss of about $2.5 million on revenue of $45 million. But Ticketmaster’s revenue growth has also been aided by unreasonably high ticket surcharges, critics say.

“If I needed a haircut, I’d go to a barber instead of going to Ticketmaster and getting scalped,” quipped Robert G. Prentiss, a Republican minority leader of the Albany County Legislature, who is backing a state measure that would cap ticket service charges in New York at 10% of the base ticket price or no more than $4.

A survey conducted last month by the New York State Consumer Protection Board found that surcharges increased ticket prices as much as 55%. Fees also vary greatly. One Manhattan Ticketmaster outlet added $5 in surcharges on a $14 ticket for “Walt Disney’s Magic Kingdom on Ice Show” but added $2.75 to a $8.50 ticket at a circus event at the Nassau Coliseum.

The highest surcharges occur when a consumer orders tickets by phone and pays with a credit card, Rosen acknowledges. Such customers often pay a single handling charge on top of service fees for each ticket ordered. Those who obtain tickets in person from a Ticketmaster outlet, usually a major department or record store, pay only the service fees, and in most cases fees can be avoided by going directly to the box office.

Ticketmaster encourages credit card orders because they generate demographic data--such as a purchaser’s name and address--which event promoters can use to target their advertising more carefully.

That kind of information helped Michael Rowe, general manager of the Meadowlands in East Rutherford, N.J., increase restaurant sales at the sports complex. Using data from customers who had ordered concert tickets through Ticketmaster, Rowe wrote letters urging concert goers to come early and eat in the Meadowlands’ restaurant.

Similarly, Rosen has arranged conference calls with stadium operators and concert promoters so that they could monitor hourly ticket sales computer data to determine whether there was sufficient demand to add an extra show.

Such service is important because ticket vendors compete--not for consumers but for the ticket business of event promoters and arena managers.

Ticketmaster did not have many clients a decade ago. But it received a big breakthrough in Southern California when the Forum, which had been Ticketron’s first fully computerized client, dumped Ticketron in 1983 and joined Ticketmaster.

“One of the reasons we made the change was that we were interested in getting our accounting system integrated with our computers, and Ticketron was reluctant to do that,” said Louis Baumeister, who manages the Forum. “Fred was willing to work with us.”

Rosen soon moved Ticketmaster’s headquarters to Los Angeles from Arizona. Within a year, the company had signed up arenas and promoters in more than a dozen other states.

“Southern California gave us the impetus and visibility to take our ticket-selling concept across the nation,” Rosen said. “People were more receptive to change here. And since Southern California is probably the largest concert market in the U.S. . . . our success here was extremely important.”

A reinvigorated Ticketron, as well as the controversy over ticket service fees, keep Rosen from resting on his laurels, however.

Peter A. Jablow, president of Ticketron, said there is “an opportunity for Ticketron staff to perform at the top of their capabilities without being stifled,” now that the firm is out from under Control Data’s corporate bureaucracy.

Additional competitive incentive comes from a bitter personal rivalry between Rosen and Pollin, who once owned a Ticketmaster franchise that served the Washington Bullets, the Capitals and the 19,000-seat sports arena where the teams play. Pollin sued Ticketmaster in 1989 over the terms of the franchise agreement. He later became so angry at Rosen’s alleged belligerence in the dispute that he urged a Washington investment firm, the Carlyle Group, to buy Ticketron so he could compete, head to head, with Rosen.

Although he now declines to elaborate publicly on his dispute with Rosen, Pollin clearly is not enamored of him.

“I won’t lower myself to respond to Fred Rosen or get in the gutter with him,” a testy Pollin said. “We have our work cut out to compete with (Ticketmaster). But competition is the name of the game.”

Pollin said he plans to launch a new computerized ticket system that would let promoters obtain customized data about ticket buyers and sales outlets. Pollin has also recruited other investors to Ticketron, including the vending and arena management conglomerate Ogden Corp. Pollin hopes Ogden’s deep pockets and arena mangement connections can help Ticketron compete better.

Despite competitive antagonisms, Ticketron and Ticketmaster may soon be forced into an uneasy alliance to combat calls to regulate their business.

New York, the largest ticket market in the nation after California, is the only state to propose regulation of ticket vendors thus far. But Massachusetts, which regulates scalping and ticket reselling, has invoked those rules to penalize the Boston Red Sox for imposing a $2 surcharge on tickets purchased by credit card holders, according to a spokesman for the state attorney general’s office. The spokesman said didn’t know whether that law could be applied to companies such as Ticketron and Ticketmaster.

Rosen said he doubts there’s much political support for limiting fees. Pollin, too, objects to regulation: “As a general rule, the more government stays out of business, the better off we are.”

The California Department of Consumer Affairs says it has not received any complaints about ticket surcharges. Russ Soloman, president of the Sacramento-based Tower Records chain, which handles Ticketron at some locations and Ticketmaster at others, said he hasn’t heard any gripes either.

Ticket service fees, however, are under fire in Tacoma, Wash., where lawyer Thomas S. Wampold has filed a class-action lawsuit on behalf of about 72,000 ticket buyers demanding that Ticketmaster return about $187,000 in fees from an October, 1988, Michael Jackson concert that was canceled.

The lawsuit, which also names Jackson and the city of Tacoma as defendants, claims that Ticketmaster refunded only the base price of concert tickets and allegedly kept the ticket surcharges.

“When you buy a shirt from a department store and take it back . . . they refund all of your money,” Wampold said.

In court papers, Ticketmaster has argued that it is entitled to the service fees since it provided the service of selling the ticket. The company also argued that it is not liable because it was acting as an agent for the city of Tacoma, which operates the concert arena.

Rosen said the lawsuit is the first of its kind against his company after a canceled event and called Wampold a publicity seeker.

Despite the fireworks surrounding the company, most of Ticketmaster’s clients say they plan to stick with Rosen.