TicketNetwork just shrugged when its brokers reneged

One of the biggest names in the $5 billion ticket-resale industry has a Super Bowl-sized headache to match.

Don Vaccaro runs TicketNetwork, a Connecticut-based online ticket-resale company that handled hundreds of Super Bowl orders whether buyers realized it or not. And many say they initially had no idea who they were buying from until TicketNetwork connected them via its software to seat-selling brokers nationwide.

Those brokers later reneged on dozens of orders sold via TicketNetwork, which allowed them to list tickets on multiple websites through a licensing agreement. But once Super Bowl deals headed south, those without promised tickets say TicketNetwork merely shrugged.

“They kept telling me it was the broker’s problem,’’ Seattle resident Danny Glasser said.

Glasser’s experience with Vaccaro’s TicketNetwork is the latest costly, confusing chapter in the secondary ticket-market scandal that left fans who had purchased tickets to the Super Bowl on Feb. 1 empty-handed and cost them thousands of dollars. Many, like Glasser, were Seahawks fans.

Glasser bought two tickets for $9,400 on the popular Seat Geek website, which TicketNetwork uses to market tickets on behalf of brokers, only to discover TicketNetwork issued his receipt. The auto-generated receipt told Glasser his order had been processed by NW Ticket Pros of Bellevue, a broker that TicketNetwork proclaimed as “part of our outstanding service network.’’

But outstanding the service was not.

Four days before the game, NW Ticket Pros owner Andrea Schreck informed Glasser his tickets weren’t coming and refunded the cost. But Glasser wanted to attend the game and phoned TicketNetwork demanding replacement seats.

Glasser said he was told that since he’d received a refund, the best TicketNetwork could offer was 10 percent off their remaining tickets — the cheapest costing $12,000. Glasser passed and wound up buying from StubHub for “several thousand” more than his initial order.

He figures somebody should cover that extra cost.

“I thought I was buying from Seat Geek, but it turns out it’s these TicketNetwork guys,’’ he says. “Then, the broker they put me on to doesn’t come through and they try to wash their hands of the whole thing.’’

Modern ticketing software makes it increasingly difficult for consumers to figure out exactly who they are buying from. Major online resale sites can guide big-city buyers to sellers from the smaller towns a thousand miles away via Vaccaro’s software.

The responsibility of TicketNetwork for brokers it markets for and directs orders to is one of the bigger ethical issues arising from Super Bowl “short selling” problems and it’s the latest controversy for Vaccaro, 52.

He’s no stranger to complaints and litigation. Vaccaro’s TicketNetwork empire, founded in 2002, took him mainstream from ticket “scalper’’ origins that date back to 1979. Vaccaro, then 16, stumbled across Jethro Tull tickets on sale for $10, bought 20 of them, and later resold the seats for $25 to $50 apiece.

Once outlawed in many states, ticket “scalping” today is a legal online “reselling” industry with men like Vaccaro at its high-tech forefront. Brokers nationwide now license TicketNetwork software that lets them list seats for sale on various websites, including their own, while Vaccaro’s computers and staff transfer the orders, handle complaints and offer advice on maximizing profits.

TicketNetwork also owns and lists broker tickets on TicketLiquidator, a resale website contributing to what Vaccaro claims is more than $100 million in annual company revenue. Vaccaro also runs an annual Ticket Summit trade show in Las Vegas that brings brokers together.

But Vaccaro has also faced complaints by consumers and rival brokers that he cloaks his identity behind multiple online websites and Internet addresses like BuyBetterTickets, CheapPricedTickets, LowBudgetTickets, TicketsPlus, TicketSpot, Trusted Tickets, SuperBoleteria, ezEvent, PrimeTix and SuperBillets.

His critics say Vaccaro uses his many companies to secretly buy up tickets to events, thwarting “scalping” restrictions at many venues that limit sales to eight per customer. A Connecticut newspaper in 2011 published photographs of TicketNetwork employees picking up stacks of tickets at numerous drop boxes owned by Vaccaro.

The paper’s story on Vaccaro’s tactics appeared soon after TicketNetwork was offered $7.75 million in grants and loans by Connecticut Gov. Dan Malloy as part of the state’s “First Five” job creation initiative. TicketNetwork withdrew from the program in 2012 after Vaccaro was arrested on state hate-crime charges following a drunken altercation with a security guard at an Oscars party in Hartford.

Vaccaro took a leave of absence as TicketNetwork CEO and entered an alcohol-abuse program in exchange for having the charges dismissed.

Last summer, TicketNetwork and two partners settled a Federal Trade Commission lawsuit for $1.4 million and agreed to refrain from using websites with URLs similar to those of sport venues and concert halls. Consumers complained they’d been misled into thinking they were buying directly from the venues.

Last month, the parent company of online competitor CHARGED.fm, sued TicketNetwork for running a disparaging article about it in “The Ticket News,” a Vaccaro-owned website purporting to be an industry news-gathering service but serving largely to promote his business interests. The lawsuit stated that Vaccaro’s companies maligned CHARGED.fm so it would lose customers and have to partner with TicketNetwork.

Vaccaro declined to be interviewed about his Super Bowl problems. TicketNetwork spokesman Darnell Goldson initially asked for a list of questions ahead of time — which The Seattle Times provided — but they went unanswered.

Goldson said TicketNetwork is “in litigation” with brokers that defaulted on ticket orders. Vaccaro did release a statement to The Times blaming the NFL for ticket distribution issues that plagued the Super Bowl and caused hundreds of fans to go without seats they’d paid for.

Brokers often “short sell” Super Bowl tickets before having any, then buy their inventory the week before the game when street prices typically drop. They fill higher-priced orders and profit on the difference.

But street prices this year soared beyond $10,000 and never really fell. Brokers walked away from orders, or lost thousands per seat honoring deals.

TicketNetwork and TicketLiquidator are named in at least 10 of 138 complaints to Washington attorney general Bob Ferguson regarding Super Bowl short sales. TicketLiquidator is the primary respondent in two complaints, while others seek money directly from brokers Vaccaro’s companies directed them to.

As with online aggregators like Vivid Seats, TicketNetwork says it merely brings buyers and sellers together. But its ability to market seats over a plethora of websites and platforms, coupled with stringent and somewhat confusing agreements with brokers, has raised deeper questions about its responsibility.

TicketNetwork says it guarantees refunds of 125 percent when brokers cancel, but Glasser said he was refunded just 100 percent and was not offered more. Some Super Bowl refunds were paid directly by TicketNetwork, now seeking reimbursement for that money from brokers that defaulted.

TicketNetwork two weeks ago filed a $294,000 lawsuit against DEM Ticketing, a broker in suburban Pittsburgh that’s generated the second-biggest monetary amount ($120,000) of Super Bowl related claims in Washington.

The lawsuit, filed in Connecticut, claims DEM Ticketing “did not fulfill orders for at least 21 customers, forcing TicketNetwork to provide refunds and, in some instances, remit additional payments to the customers.”

TicketNetwork states in the suit that its licensing agreement compels brokers to fill all orders and “pay additional costs, fees, fines and penalties associated with its failure to provide those tickets.”

But not all Washington residents feel 125 percent is adequate compensation.

Issaquah resident Janet Stephens says she and her husband, Clay, had no help from TicketLiquidator recovering extra costs from broker 1stRowSeating in San Diego after it reneged on tickets. Stephens says 1stRowSeating’s 135 percent refund offer barely puts a dent in their travel costs.

She’s irked there was no way of knowing her seller’s identity until their credit card information was provided. “Even if we wanted to avoid these guys again down the road, there’s no way to do it,’’ Stephens said.

That complaint was echoed by Grandview residents Heidi and Steve Van Boven, who purchased four seats for $12,600 on Seat Geek. TicketNetwork then passed the order on to DEM Ticketing, the Pittsburgh area broker Vaccaro’s company is now suing.

The Van Bovens received the auto-generated receipt stating DEM Ticketing was part of an “outstanding service network.’’ Van Boven says when she phoned TicketNetwork soon after, a representative assured her they’d done business with DEM Ticketing “for years.’’

But corporate documents in Pennsylvania show DEM Ticketing formed only five months before the Super Bowl. Its two named corporate officers, David Marks and Brian Miller, had no prior experience running a ticket company.

Industry sources suggest TicketNetwork collects fees up to 25 percent from sales by brokers licensing its services. A Hartford Business Journal profile of Vaccaro in 2011 said TicketNetwork receives 10 percent from the broker and 15 percent from the customer.

The Van Bovens believe TicketNetwork’s commissions raise ethical concerns. After DEMTicketing defaulted on their initial order Super Bowl morning, the desperate Van Bovens phoned TicketNetwork.

A company representative found them four new seats within its broker network — for $50,000, four times the initial price they paid.

The Van Bovens paid $10,900 in service fees for the new seats. Had DEM Ticketing fulfilled their initial order, the fees would have been $2,100.

It’s unclear whether that entire $10,900 went to TicketNetwork as commission. But Heidi Van Boven says TicketNetwork shouldn’t be profiting when its brokers botched the initial order.

“They should have paid to get us seats,’’ she said of TicketNetwork. “Instead, they leave that to us and then make even more money off the sale than they would have had the initial deal been honored.’’

One complaint to Washington’s attorney general involved a Missouri broker, Big Red Tickets, that reneged on a sale of three tickets for $6,279 to a Fox Island resident via TicketLiquidator. Though Big Red Tickets reimbursed the resident, Andrew Blair, to cover added expenses, the broker states in documents that TicketLiquidator’s commission off the sale amounted to $1,569 — 25 percent.

Spurned ticket buyer Glasser says if TicketNetwork can profit like that, it can afford to reimburse those now out thousands.

“They keep claiming these guys are part of this great network they run,’’ he says. “Then they should stand behind it when things go bad.’’