M's put prime seats up for online bids

At the same time the Seattle Mariners are hiring undercover officers to bust scalpers outside Safeco Field, the team is selling premium seats it controls at hefty prices on its Web site.

Why is one sale considered a gross misdemeanor, the other not?

Team officials say the club is operating within the bounds of a Seattle ordinance that forbids selling tickets above face value.

That's because thousands of tickets the Mariners are marketing on the club's Web site — as many 111 per game available at up to $125 each — involve never-before-sold charter seats. That means they have no established price and represent primary sales, the team says.

By contrast, scalping that occurs on the streets outside the stadium involves secondary sales — the re-marketing of tickets.

In explaining why what the Mariners do does not amount to scalping, Randy Adamack, the M's vice president for communications, said, "There is no face value on them."

The market determines their value, he said.

Not so fast, say some critics.

"It sounds like a weak argument to me," said Mark Charlesworth, who last year was cited by undercover Seattle police, working on the team's payroll, who were patrolling for scalpers outside Safeco.

"It's a beautiful loophole they've got for themselves," said Charlesworth, who faces up to a year in jail and a $5,000 fine if convicted.

Alan Chitlik, who co-owns two charter seats that cost his group $44,000 in licensing fees, was similarly skeptical.

"What's the expression? 'Walks like a duck, sounds like a duck, quacks like a duck?' But the market decides that it's not a duck? It's outrageous."

The tickets are sold on part of the team's Web site called Ticket Marketplace. When it was introduced in 2001, the team promoted it as a service to season ticket-holders to resell seats they could not use, and to provide buyers with a safe and secure environment for buying tickets.

The team profits from such transactions, taking in 15 percent from the seller and 10 percent from the buyer. The team's use of the Web site to sell tickets it controls has not been widely advertised. In fact, it has been doing so since 2001, the team said last week.

In recent days, the club added a sentence on the Web site saying the club "may elect to offer for primary sale (not previously sold) tickets through this marketplace."

The sentence was added, M's spokeswoman Rebecca Hale said, because "it was our desire to have the language accurately reflect the nature of transactions being conducted on the site. We've never made it a secret that we've been doing this kind of thing. It's not something we've tried to hide."

The tickets the M's are offering are for charter seats, of which there are nearly 1,000. The padded seats are located directly behind the dugouts. The charter-seat section tapers to the outfield corners.

Mariners officials say they may post more than 8,000 charter seats to the team's Web site for the 2003 season.

As of last week, the club had sold 1,800 charter seats on a per-game basis this season, Hale said. The club calls the practice a legitimate marketing strategy that makes great seats available to fans.

First offered for sale before Safeco opened in 1999, the 966 charter seats required a deposit, or license fee, of $12,000 to $25,000 per seat. That entitled the buyer to own them for 19-½ years — along with buying the tickets each year, which this season is $38 or $30 per game, depending on seat location.

Charter seats were the slowest selling of the team's luxury seats (the others are Diamond Club, Suites and Terrace Club). So starting in 2000, the team began offering them in quarter-season options.

As of this season, 70 charter seats are fully unsold, and another 41 are partially unsold.

The team made a strategic decision at the end of the 2002 season to cap season-ticket sales of the remaining charter seats and sell them solely on Ticket Marketplace, Hale said. As many as 111 charter seats per game appear for whatever price the market will bear.

"The online marketing is no different from what airlines, hotels, even Broadway shows do to offer inventory in a new way that will generate business that might not have existed in the past," Hale said.

Recent checks of the site showed that ticket prices for charter seats for some games decline as the games draw near — even though the seats were listed under a column labeled "fixed price."

If the tickets still don't sell within a few days of the game, the M's release them to Ticketmaster and the box office, where they are available at $45 or $32 each, depending on the location. Those prices correspond to the per-game price for box and field seats, respectively.

But when the M's sell them on Ticket Marketplace, the printed price is whatever the buyer pays for them.

The M's split revenues from Ticket Marketplace sales with their software vendor, Liquid Seats of San Francisco, and Major League Baseball Advanced Media. Club officials said that last year the team received royalty checks of between $100,000 and $120,000 as the team's share of secondary sales proceeds (sales tied to reselling by season-ticket holders).

They declined to say if they received additional revenues tied to primary sales. They also said they pay all applicable taxes on such sales.

Meantime, some fans figured out the online arrangement before the M's made it so public and have used it to their advantage.

One fan, who asked to be identified only as Bump, said he and his brother stumbled upon the system in 2001. Ever since, they have been able to impress friends with their ability to score charter seats that end up on Ticketmaster, he said.

"All of our friends think we're great and we have these great seats," said Bump, who likes sitting in the first row down the first-base line. "Everyone wants to be that guy who can get great seats."

As for the club practice: "It's kind of hypocritical," Bump said. "I don't see how they can sit back and say that it's not scalping whether it's on the Web site or the corner of Royal Brougham."

To prove his point, Bump came up with the following scenario: Imagine he saw a seat going for $125 on Ticket Marketplace and ended up buying it on Ticketmaster for $32. Then suppose he tried to sell it on the street outside Safeco above face value.

"They (the M's) can sell it for more than $32 and I can't," he said. "I'll get arrested."

Testing the method

According to a Seattle Times analysis of tickets posted to Ticket Marketplace, for all home games remaining as of June 10, nearly 3,000 seats were offered for sale in Sections 140 and 141 alone, an area just past third base.

Almost all of them are charter seats.

On June 10, The Times paid $60 each for seats 8 and 9 in Row 4 of Section 141. Besides the ticket price, the paper paid a required "buy" fee of 10 percent, plus $14.95 in delivery charges. Total tab: $146.95.

Of a dozen fans sitting near the two purchased seats during the M's-Angels game on June 16, four had purchased their tickets on Ticket Marketplace and eight on Ticketmaster. Of the eight, four had bought them that day, paying $45 apiece. Like The Times, the four who bought on Ticket Marketplace paid $60 each for their seats.

"It doesn't sound kosher to me," said Allen Ressler, a Seattle defense attorney who is seeking to get the charges dismissed against Charlesworth on grounds of selective prosecution by the City Attorney's office.

Ressler claims the city is turning a blind eye to scalping activity on the M's Web site.

Seattle City Attorney Tom Carr says his office does not prosecute selectively. He also noted that the Seattle Police Department — and not his office — is responsible for investigating and referring criminal cases.

The police department has never presented a report seeking prosecution for scalping over the Internet, Carr said. Even if they did, Carr said that in a criminal case there could be proof problems demonstrating "where" a transaction occurs when it takes place in cyberspace.

In May 2001, M's officials met with Assistant City Attorney Michael Finkle to discuss their plans for setting up Ticket Marketplace, including direct sales to customers, said Hale.

"It was their (the city attorney's) belief that this was not contrary to the city ordinance," she said.

Finkle said he didn't give the M's any legal advice. "It's not correct that they got approval from us for anything," Finkle said, noting that Hale was not at the meeting.

Clyde MacIver, a Mariners' attorney who did attend, confirmed that Finkle gave no advice. But he also indicated that Finkle's silence about the Mariners' plans was a sign that the club was on the right side of the law.

"We provided information to them as to what we were doing and to get feedback if they thought that what we were doing was illegal," MacIver recounted. "And we did not get that feedback."

Peter Lewis: 206-464-2217 or plewis@seattletimes.com