Baseball Arm to Acquire Tickets.com

It’s like scalping, only in reverse.

Investors who have owned shares of Tickets.com since the Internet boom in 1999, when the stock soared to $256, now get to sell them for the markdown price of just over a dollar.

The Internet arm of Major League Baseball said Tuesday it had agreed to acquire the Costa Mesa-based online sports and entertainment ticket seller for $66.5 million, or $1.10 a share.

That’s about a 33% premium over Monday’s closing price of 83 cents. The shares rose 25 cents Tuesday on news of the deal, to $1.08 in the electronic Pink Sheets market. Stockholders who control about 82% of Tickets.com’s shares had agreed to tender their shares, the company and Major League Baseball said.

MLB Advanced Media, a privately held firm owned equally by all 30 Major League Baseball franchises, said it would operate Tickets.com as a wholly owned subsidiary and planned no major changes. MLB Advanced Media operates the MLB.com website as well as sites for each teams.

Bob Bowman, chief executive of MLB Advanced Media, said the league decided to take a direct role in peddling tickets online in hopes of boosting sales.

“The world is going digital, commerce is going digital and the tickets are going digital,” Bowman said. “Instead of being a market taker, why not try to be a market maker?”

Major League Baseball expects online sales to reach 15 million tickets this year compared with 11.2 million in 2004 and 4.7 million in 2003. In total, it sold 73 million tickets in 2004, said MLB Advanced Media spokesman Jim Gallagher.

Bowman also said major league teams’ relationships with three other online sellers, which the teams negotiate independently, would probably not change.

West Hollywood-based Ticketmaster, a subsidiary of IAC/InterActiveCorp, has agreements to sell tickets online with a dozen clubs, including the Los Angeles Dodgers and the Los Angeles Angels of Anaheim. Irvine-based Paciolan Systems Inc. sells tickets for five teams, including the San Diego Padres. The third company, Audienceview Software Corp., sells tickets for the Toronto Blue Jays.

Tickets.com reaps about 20% of its revenue from its deals with 12 baseball clubs, including the Boston Red Sox, Oakland Athletics and San Francisco Giants, according to Chief Executive Ron Bension.

Bension said the company would retain its management team and keep the name Tickets.com. It will continue non-baseball business, which includes selling tickets for the 2006 Winter Olympics in Italy.

Tickets.com was a creation of Idealab, a Pasadena company that poured millions into start-up companies during the Internet boom of the late 1990s.

Tickets.com’s stock hit a high of $32 the day after its initial public offering in November 1999 -- the equivalent of $256 when adjusted for a subsequent 1-for-8 reverse split. By the end of 2000 it had lost nearly all of its value in the dot-com crash, plunging to under $1.

Recently the company has had difficulties reporting financial results on time. The company filed its 2003 results this week and said it had a loss of $5.3 million, or $1.71 a share, on revenue of $67 million.

Times wire services were used in compiling this report.