Van Halen Caught Up In Scalping Scheme

The Van Halen classic “Runnin’ With the Devil” might very well be changed to “Runnin’ With the Scalpers” now that the rock band has been alleged to have conspired with ticket scalpers during a fall 2007 tour in order to reap an extra $1 million, according to a report by the Wall Street Journal.

The plan, part of a Ticketmaster initiative named “Project Showtime,” was devised to grab a piece of the exorbitant prices charged by scalpers, which sometimes surpass a general ticket’s face value by hundreds (often thousands) of dollars.

Van Halen’s part, according to the paper, was involved in farming out up to 500 of the best seats from about 20 of its concerts with original frontman David Lee Roth to secondary ticket brokers.

Irving Azoff, Van Halen’s manager and Ticketmaster’s chief executive, is said to have spearheaded the scheme in the summer of 2007.

Under the proposed plan, the scalpers (who prefer the term ‘brokers’) would keep 30% of the marked-up ticket sale price for themselves, and the remaining 70% was divided among Ticketmaster, the band and its handlers, the paper reported. Van Halen’s involvement in ’07 was actually part of a test run.

Ticketmaster, which is now pursuing a merger with Live Nation, was negotiating with ticket brokers such as Ace Ticket, a Boston-based broker, Barry’s Tickets Service in Los Angeles and Elite Ticket Service in New York to launch the above-mentioned “Project Showtime.”

The project also included negotiations with concert-promoter AEG Live, and Madison Square Garden-parent MSG Entertainment.

Promoters and others in the mainstream concert business have long looked with envy at the steep markups scalpers charge for hot concerts. The Internet has made such resales easier and even more lucrative, allowing brokers to buy tickets for events in distant cities and list them on Web sites like eBay Inc.’s StubHub.com.

But brokers can also be left holding the bag when they bet big on a show that flops or an outdoor event that is rained out.

One of the main reasons “Project Showtime” fell apart was because Ticketmaster execs were gun-shy about going into business with the leaders of an industry they had long opposed, which makes sense. From a purely illegal standpoint, the deal makes sense. But clearly the trust meter in the room between the brokers and Ticketmaster was registering a 1 out of a possible 10, so everyone just walks away thinking about ‘what if…’

Of course, before the deal was completely shelved for good the ticket brokers had already been given tickets to scalp, and rock stars Van Halen pocketed an extra $1 million.

Do you feel any differently toward Van Halen after hearing about this deal with ticket brokers?