Backstreet Boys’ Dispute With Promoter Offers Insight on Scalping

SFX is not alone in its involvement with brokers.

A major ticket scalping scandal erupted eight months ago involving Hollywood-based House of Blues Concerts, the nation’s second-largest concert promotion company. The management of the Backstreet Boys caught the company’s Universal Concerts division selling more than 1,000 tickets for its Oct. 31 concert at the Pepsi Center in Denver directly to brokers, who resold them for as much as $350 each.

The incident was exposed by the Denver Post in November--just three months after the company bought Universal Concerts from Seagram Co. Under Seagram, Universal had implemented a broad season ticket program in 1996 that made it easier for brokers to pay extra fees to license large blocks of prime seats, sources say. The company made no effort to screen applicants nor did it bar anyone from reselling the tickets, sources say.

Lisa Bullock, a former ticket manager at Universal’s Denver office, contends that senior Universal managers ordered her to withhold thousands of tickets to concerts in 1998 and 1999 by Elton John, Pearl Jam, Shania Twain, the Spice Girls and Jimmy Buffett from public sale, according to the Denver Post. Many of those tickets ended up in the hands of brokers and were resold at inflated prices, sources say.

“This is something that all those poor kids who stand all day in line for tickets need to know: They’re getting cheated,” Bullock said in a phone interview. “They’re never going to get those good seats. The fans are getting screwed--and so are the bands.”

The firm initially denied involvement in the Backstreet Boys episode. But after an internal investigation, the company admitted it had erred and donated $75,000 to a charity at the Backstreet Boys’ request. House of Blues Concerts President Jay Marciano said the company revamped its ticketing policies as a result.

“We made a mistake,” Marciano said. “After reviewing our ticketing programs and procedures, it was clear that we needed to take stronger steps to discourage brokers from reselling our tickets. So that’s what we did.”

The Denver scalping incident, however, soured the Backstreet Boys on the company.

“We switched promoters last year after we caught . . . Universal Concerts selling tickets to the Backstreet Boys show directly to scalpers,” said Jeff Kwatinetz, co-founder of the Firm, the management company that represents Backstreet Boys. “They took the remedial action we requested by donating money to charity. I think it would be naive, however, to believe that scalping isn’t going on widespread at other venues across the country.”

After the incident, the Backstreet Boys decided to schedule all new dates on its national tour with industry leader SFX.