When ScoreBig shut down Friday, the death threats from angry scalpers started almost immediately. One broker trapped several customer service employees in a room at ScoreBig’s LA office and demanded to speak to his account rep. Later, a top executive got a call at his house threatening his family if the broker wasn’t made whole. Another said a broker told a colleague he would “beat the shit out of him” if he wasn’t immediately paid $15,000 owed to him.
“I told my buddy ‘Dude, just pay the guy, it’s not worth it,” our source told us. “And he basically said ‘well, our money is tied up right now.’ That’s when I knew things were really bad over there.”
Amplify has interviewed a number of current and former employees at ScoreBig who paint a picture of a company with out-of-control spending and ominous signs of trouble. On Friday, ScoreBig officials were forced to let go of most of their staff and effectively shut down operations. The move outraged many independent brokers, who hadn’t been paid in months. Some brokers started canceling tickets sold on the site as a way to recoup losses. Amplify has been in contact with over a dozen fans who say they showed up to an event only to learn their tickets had been invalidated.
“I’m devastated and this was my only plan to do something fun before my new baby was born,” said Ashantae Washington, whose tickets to see Beyonce in Atlanta had been canceled by a broker trying to get their money back. She never made it into the show.
“I literally had a panic attack and almost passed out,” she said. “Not to sound dramatic but it’s a big loss for me.”
An executive at ScoreBig who spoke to Amplify said the company is struggling to find a buyer or a way to liquidate its assets so that it can pay brokers and avoid more cancellations.
“Right now, it’s important for the brokers to be level-headed and patient,” he told Amplify. “This is real, this is serious and everyone has the right intentions. We are working hard to fix this.”
Officials with DTI and TicketNetwork confirmed that they are in talks with ScoreBig to cover $2.5 million to $4 million worth of outstanding ticketing inventory for events that haven’t taken place, everything from baseball playoffs to concerts, the NFL and college football. According to a guidance memo from the National Association of Ticket Brokers, “ScoreBig’s senior secure debt holder seized operations of the company and was meeting to determine next steps, including but not limited to the liquidation and/or sale of its assets.”
DTI, TicketNetwork and the NATB are all concerned that widespread ticket cancellations will bring unwanted scrutiny. Earlier this year, New York Attorney General Eric Schneiderman released a scathing report about the role of brokers in the ticketing industry, and a bill before both chambers of Congress would create new restrictions on how tickets were procured. While some brokers have started canceling tickets, others are assessing their losses. LA’s largest ticket broker Barry Rudin with Barry’s Tickets told Amplify that many brokers would take a hit as a result of the ScoreBig crash.
“I think it’s horrible and sad,” he told Amplify. “I think it was a bunch of hardworking nice people who failed.”
He told Amplify the shutdown came with no warning, and that he had been in conversations with company officials about a payment schedule just days before it went under.
“They could have slowed down their sales until they got the funding, but they kept moving along like everything was ok,” he said. “Desperate people do desperate things.”
Employees at ScoreBig said signs that the company was in trouble came to a head Monday of last week when most ticketing inventory on the site was taken down. After a week of rumors, company officials showed up to the company’s West Hollywood headquarters on Friday and told employees to clear out their desks.
“Employees were given no warning on the company’s demise,” one source told us. ScoreBig’s 70 employees “walked in Friday morning, were told this was the last day and that they’d receive half a pay check.” Health insurance would end promptly on Oct. 1, even for employees who had worked at the company since its launch six years ago.
Behind the scenes, the company’s top brass scrambled to find money to fund the company. Talks with Time-Warner to buy ScoreBig collapsed and the company was burning through cash at an alarming rate. Payroll was between $750,000 to $1 million a month and the company’s expenses were adding up. Besides their Los Angeles office, ScoreBig rented a pricey office near Times Square. CEO David Goldberg lived in Bethesda, Maryland and was commuting back and forth each week on the company dime.
“The company also spent big on partnerships, including approximately $7 million a year to integrate with Ticketmaster and appear as a purchase option for events and teams that are clients of the two companies. A high-ranking official at Ticketmaster said the deal was much hyped but never resulted in significant sales.
“We did the deal because they believed teams would want this service, but no teams actually signed up,” the TM official told Amplify.
Our source within ScoreBig said claims of overspending are exaggerated and added that the company is working hard to prevent more ticket cancellations. Making the situation more difficult is that the company’s VP of Finance was on a long-planned vacation in Africa when the company went under.
“We have so many constituencies to satisfy,” our source at ScoreBig said. “The real challenge is managing all of the little guys and trying to make them whole so that they don’t keep canceling tickets.”
Yesterday, the NATB sent ScoreBig a letter (read it here) calling the situation “a crisis” and complained that “ScoreBig’s decision to not provide any notice or information to buyers or sellers before or after creating this crisis has made the situation even more difficult.”
Executive Director Gary Adler wrote that the NATB “wants to work with ScoreBig to assist purchasers. To accomplish this, ScoreBig must provide contact information for ticket purchasers to all events that have not yet taken place” and said it was incumbent on ScoreBig “to issue notice to all of its customers making them aware of the current situation” and said “they should issue an immediate alert informing buyers that they have a risk that the seller of their tickets will not get paid by ScoreBig, thereby putting their tickets at risk of being cancelled.”
Our source at ScoreBig said the company is weighing what do and is “concerned about the privacy of our customers. That’s something we don’t take lightly. Many of the brokers we deal with are small operations and they’re simply not in a position to clear up these transactions.”
Meanwhile the situation is worsening as more fans are reporting canceled tickets to Amplify. One buyer named T Jackson was denied access to the final regular season home game of the LA Dodgers.
“This was a highly anticipated game due to it being Vin Scully’s last home stand, so to be denied access was a huge disappointment,” he told Amplify. “It’s very unlikely I will ever risk missing another game by purchasing tickets through a broker. Lesson learned.”
Amplify heard from three people who had their tickets denied to the Monday Night Football matchup between the New Orleans Saints and the Atlanta Falcons at the Mercedes-Benz Super Dome.