As the ScoreBig crash threatens to leave thousands of fans stranded, many in the sports and live entertainment industry are waking up to an uncomfortable reality — the only real stopgap preventing a consumer crisis are ticket brokers.
ScoreBig has left many brokers looking at six or seven figure losses and a scary ethical dilemma — do they cancel the tickets of unwitting fans so they can recoup their losses and resell them to someone else, or do they allow the fan to attend the events and hope for some kind of settlement with ScoreBig? It’s a dangerous gamble — if ScoreBig goes into bankruptcy, the company will be liquidated and anything of value will first go to the investors. If brokers cancel barcodes and try to recoup their investment, that means canceling barcodes with no way to contact fans to let them know their tickets have been invalidated.
Patrick Ryan with secondary market consolidation firm Eventellect is warning brokers that a wide-spread cancellation could be catastrophic.
“We can’t give fans a bad experience. Hopefully, someone steps in and provides some resolution, but we need to keep the greater good in mind,” he told Amplify. “All it takes is one family to have a bad experience and they won’t ever return because of the hassle they endured. They’ll go to the movies next time, or watch the game on TV. For the sake of our business, everyone that is able to financially should take one for the fan and wait this out until a resolution is available.”
Many brokers are angry at ScoreBig, and it’s likely the company’s behavior during the final months leading up to Friday’s shutdown will be investigated, litigated and potentially lead to a larger bubble burst within the sports startup scene. It’s certainly going to be a wake-up call for the VCs like Bain Capital and Checketts who have spent millions trying to disrupt ticketing and don’t have much to show for their investment. And it’s probably going to be a nightmare for ScoreBig’s partner organizations to untangle because of the complex relationships and deals in place with Ticketmaster, AXS, Paciolan, sports teams, brokers and markets like SeatGeek and TicketNetwork.
In the short term, there’s potential for thousands of tickets sold through ScoreBig to be canceled by brokers hoping to recoup their losses. Brokers haven’t been paid in months — we spoke to several who said they were out $50,000-$100,000 to ScoreBig.
The crisis has ensnared large firms like SeatGeek, TicketNetwork and DTI. On Saturday, DTI CEO Curtis Cheng issued a statement that said his group would work with ScoreBig to notify the customer that tickets were no longer valid and instruct fans to contact their credit card companies and charge back the tickets. Many worry that a high volume of fraud claims will ensnare other ticketing companies and cause chargebacks to skyrocket. Plus, it sends a dangerous message to the consumer — if you don’t want to pay for tickets, just call the credit card company and cancel them.
Over at the National Association of Ticket Brokers, the group’s Executive Director Gary Adler released a statement Sunday that said “ScoreBig has instructed at least one seller to cancel tickets for today,” but noted that the NATB “discouraged its members from canceling tickets for this weekend’s games and events because fans should not suffer for ScoreBig’s actions.”
Several high-level insiders estimate there are hundreds of thousands of tickets on the market right now for Major League Baseball, the National Football League and college football.
“I would not be surprised if brokers cancel barcodes by the hundreds or thousands and cause denied entries across the country,” one industry observer told Amplify. “They need to be paid on their investments.”
Broker Scott Koziak told Amplify that he was owed about $8,000 from ScoreBig and has decided not to cancel barcodes
“While it is not as much as some other brokers are reporting it is all a matter of scale and likely equally as painful for all of us,” he told Amplify. “I will not, however, be canceling any barcodes. The fans did not create this problem and most have no idea how this industry even works. Most events I am owed for have already happened anyways, and it is not worth it to get pennies on the dollar.”
If brokers do start canceling tickets en masse, it will set off a wave of scrutiny in the industry that might overshadow past scandals like Hannah Montana in 2007 or the 2015 SuperBowl. On TV, you’ll see reporters interviewing crying Ariana Grande fans who got rejected at the door, state attorneys conducting fraud investigations and politicians pushing through new legislation. It could mean political coverage for primary ticketing companies looking to develop new technology that limits the transferability of tickets and squeezes more players out of the secondary space. The public will hear the horror stories of Beyonce tickets cancelled and playoff games invalidated and their trust in the secondary will sink even lower. And in the end, ticket brokers will contemplate all of the consequences of a large-scale ticket cancellation and probably do it anyway.
“The buyer of my tickets is ScoreBig. I have no idea who they provided them to,” one broker who wished to remain anonymous messaged me on Twitter, saying he hadn’t decided if or when he would start canceling tickets. “If ScoreBig had provided me with contact information, I would’ve spent the time to reach out to every buyer and explain the circumstances. I would advise them to contact their credit card company and get a refund. If they wanted to keep tickets, they could purchase through me at a discounted rate.”