OTL: How the wild world of Super Bowl ticket brokering can burn regular fans

An Outside the Lines investigation found a wild world where brokers are scrambling to acquire Super Bowl tickets they've already sold to fans -- sometimes weeks or months earlier -- in a little-known practice called "ticket speculation." ESPN

IT'S SNOWY AND 14 degrees below zero the day before Super Bowl LII in Minneapolis. A man in a silver puffer jacket and a diamond-encrusted watch scurries into the NFL headquarters hotel and greets Drew Rosenhaus, one of football's most powerful agents.

"Things going smooth?" he asks. "Very good," Rosenhaus responds before adding, "Make a lot of money. 'Secure the bag,' as our clients say."

And with a fist bump, the two part ways. "We service a lot of Rosenhaus' clients," the man says. "Whatever they want."

His name is Mike Lipman, and he describes himself as "one of the larger ticket brokers in the United States." He turns to scan a lobby bustling with middle-aged men before staking out a couch and some chairs for his small team, pointing out other brokers who've already set up camp. There's one at a couch and another at a high-top table near the bar. They're all loaded down with cellphones, tablets, laptops and, by the looks of it, plainclothes security. Runners with backpacks and satchels come and go, dropping off money and picking up tickets.

It suddenly becomes clear what's happening here: Nearly everyone in this packed lobby is wheeling and dealing, trying to acquire tickets less than 24 hours before the game. These are not ordinary fans trying to get tickets but rather brokers trying to secure tickets they, in many cases, sold to fans weeks or months earlier. The practice, wholly unregulated, is called "ticket speculation," and it can be found around nearly every type of high-demand event, from the Super Bowl to the Masters Tournament.

"They're speculating on the teams ... They're selling tickets they do not have." Mike Lipman

The scene in Minneapolis last February was a rare glimpse into the dynamics underlying Super Bowl ticket speculation, a wild, secretive world in which brokers leverage inside access to acquire tickets that can be flipped to regular fans, often for many times their face value. And Lipman was the rare broker willing to serve as a sort of tour guide during a yearlong Outside the Lines investigation.

Outside the Lines found no state or federal laws that prohibit the sale of speculative tickets, and sellers are not required to disclose that they don't actually possess tickets at the time of sale. In many cases, fans have no way of knowing until a broker doesn't deliver.

"They're speculating on the teams," Lipman said. "They are trying to predict what the future price is, what teams are going to be in there in six months to a year in advance." What few fans know, he said, is "they're selling tickets they do not have."

WILLIAM GAMBOA AND David Fischer learned about the downside of speculation the painfully expensive way. The two best friends have been Seattle Seahawks season-ticket holders for about two decades and were in the stands when Russell Wilson overcame four interceptions to lead Seattle in a 28-22 overtime victory over the Green Bay Packers in the 2014 NFC Championship Game.

"Greatest game ever," Fischer said. "I remember we were out in our tailgate lot popping champagne."

"We were all saying, 'We're going to the Super Bowl!'" Gamboa added.

While celebrating, they and two other friends searched online for tickets to the Super Bowl matchup in Glendale, Arizona. Gamboa was ready to finally tap an account he'd started just for this occasion. Instead of birthday or Christmas gifts, he'd asked his wife to deposit money in his Super Bowl account. "To see the Seahawks in the Super Bowl, win or lose, is what I wanna do," Gamboa said.

They started with StubHub, but Google led them to SBTickets.com, where seats were going for $800 less. "I'm not typically the type that just jumps in and buys the first thing I see," said Fischer, who runs a compounding pharmacy. The site's "100 percent guarantee" persuaded him the transaction was safe.

They spent $3,000 per ticket -- $12,000 for the four. "It's a lot of money," Gamboa said, "but you don't know when they're going to go again."

The tickets were "zone seats," where a seller promises seats in a general area of the stadium instead of specific seat numbers. Gamboa and Fischer said they didn't question the email they received from the company confirming their purchase and telling them they could pick up their tickets in downtown Phoenix the Friday before the game.

Thinking they were all set, the men requested time off of work, booked their flights, found a place to stay and packed their bags. But on the Thursday before the game, as he was headed to the airport, Gamboa texted an uncle who had also bought tickets to see if he wanted to meet up in Phoenix. The uncle wrote back: "We're not going."

The uncle explained that his ticket broker had emailed to say he couldn't fill the order and would issue a refund, plus an extra $500 for the inconvenience. Gamboa then heard of another uncle with a similar story.

"I hope this isn't happening to us," Fischer and Gamboa said to each other. Standing in the airport, Fischer called the phone number he'd been given by SBTickets.com and asked, "Is this something that is going to happen with you guys?"

Fischer remembered the woman on the other end telling him, "Nope. We're good to go. You come on down. We're excited to see you guys."

They flew to Phoenix unaware that the secondary market for Seahawks-Patriots tickets had gone berserk.

FOR AVERAGE FANS, Super Bowl tickets can be purchased from the NFL only if attached to "experiences" that cost far more than the face value of the cheapest seats. Experiences, often nothing more than a ticket, a room and entry to a tailgate party, are sold through On Location Experiences, a company partly owned by the NFL, its owners, a few investment companies and celebrities.

In Minneapolis last year, the cheapest On Location packages started at $6,299 per seat and sold out before fans -- or perhaps brokers -- even knew the game would pit the Philadelphia Eagles and New England Patriots. Face value for similar 300-level seats was $950. The most expensive On Location packages, at more than $13,499 each, were sold out within 24 hours of the AFC and NFC title games.

"The simplest way to explain how the Super Bowl works is there's no primary market. You cannot buy a ticket at face value," said Lipman, who owns TicketsofAmerica.com and White Glove International, which specialize in obtaining the hardest-to-get tickets straight from the source -- players, teams, sponsors and other partners who are allocated seats by the NFL. "The primary market is only for sponsors, players and people that have ties with the individual teams."

Most fans therefore turn to large ticketing sites that, when it comes to the Super Bowl, often list seats sold by ticket brokers. And many of those brokers depend on middlemen like Lipman to find them their tickets.

NFL players are one of Lipman's best sources. He has spent years establishing relationships with players and sponsors, inviting them to charity events and coordinating travel for their families with the hope of cashing in favors on tickets.

Under the terms of their collective-bargaining agreement, every current player has the option to buy two seats at face value. If they're playing in the Super Bowl, they can buy up to 15 tickets.

"The bigger players and veterans don't sell their tickets," Lipman said. "Their families go and they really don't need the money. But you've got some players that need it, like to have the extra spending money. ... They take that ticket and they resell it for double, triple face value."

NFL spokesman Brian McCarthy quoted the section of the CBA that says player tickets are "for personal use and not for resale." The provision is "subject to reasonable safeguards to avoid scalping of the tickets," according to the contract. He said he wasn't aware of any players who've been punished for selling their tickets.

McCarthy said the league allots 75 percent of Super Bowl tickets directly to the league's 32 teams, with each Super Bowl team getting 17.5 percent of the tickets, the host team 5 percent and the other 29 NFL teams just over 1 percent apiece. The remaining 25 percent of seats are doled out by the league office. They're sold to players and provided to business and media partners. About 500 tickets are donated to military families and youth football groups, he said.

McCarthy said the On Location experience packages were one way for the league to address fan frustration at ticket scarcity.

"We understand the demand for the most sought-after ticket in sports entertainment, which is why we're trying to be reasonable with the tickets we distribute," he said.

In Minneapolis, Lipman worked the phones on Saturday morning before the game to scoop up seats ahead of the competition.

"Wake up!" he told one potential source. "Money doesn't sleep! Let's make some money!"

Lipman turned down one player who wanted $2,750 apiece for 200-level seats. But he tracked down a couple of Patriots willing to sell their tickets as well as passes to a postgame celebration that would be valid only if they won. He jumped into an SUV with a couple of business partners to meet the players at the Patriots' hotel. He declined to name any of them.

Security was tight around the hotel, so Lipman told his partner to drop him off near a Starbucks. There, he'd meet with someone in the players' entourage who could escort him into the hotel. "[Bill] Belichick doesn't play around," Lipman said of the New England coach. "They have this down to a science. They don't want to be Mickey Mousing around with tickets. That's why we do their dirty work for them. I'll be back in 15 minutes."

He returned with several manila envelopes. As the SUV slogged back toward the NFL headquarters hotel, Lipman and his partner sorted through the tickets and passed stacks of $100 bills. Lipman had plenty of security surrounding him as he settled back in with about 50 tickets to sell.

Simultaneously throughout Minneapolis, thousands of fans in Eagles and Patriots jerseys stood in line to pick up tickets they'd paid for and ordered from various companies. The longest line was at StubHub's pickup center, where a line filled with hundreds of customers snaked through the tunnels beneath Target Field. Some of the same runners seen at the NFL hotel could be seen coming and going from the various pickup locations. At one, they walked past the line and disappeared into a back room located directly behind the table while fans were picking up their ticket orders.

That's the big secret behind Super Bowl tickets: Fans may pay for tickets far in advance, but brokers might not have their seats until just before kickoff.

"It's a common practice for the major events," Lipman said. "For World Cup soccer, Super Bowls, the Masters. They're selling tickets they do not have."

In a different example, Nebraska's attorney general recently filed a complaint against a company called Secure Ticket Purchase, which does business as Box Office Ticket Sales. "Consumers who place an order for speculative tickets are largely unaware that Secure Ticket Purchase does not have the tickets or any rights to the tickets at the time of the consummation of the sale," the complaint alleged.

The company agreed to a $125,000 settlement with the state in December, including language that it would not make any statements during a speculative sale indicating that it already possesses tickets. The company's attorney, Andy Hilger, said Secure Ticket Purchase "vehemently denies the allegations that its business practices were either unfair or deceptive to its customers."

"This action is now closed by agreement of the Nebraska Attorney General and Secure Ticket Purchase LLC without any finding of wrongdoing or liability of any kind," Hilger said. He added that the company "does not take orders for NFL tickets without ensuring delivery by its trusted third-party vendors who have permanent seat licenses or otherwise a contractual right to obtain the tickets."

LIPMAN REMEMBERS THE week leading up to Super Bowl XLIX well. Months before anyone knew which teams would end up in the game, brokers predicted they'd be able to secure wholesale tickets in Phoenix for as low at $1,500 and flip them for about $3,000 to double their money. Remember, that's what Gamboa and Fischer paid to SBTickets.com.

But once the Seahawks won the NFC championship, prices skyrocketed. "Having a fanatic West Coast team like Seattle in a West Coast venue in Phoenix, you had tremendous demand for Seattle fans to go," Lipman said.

He said he got out early and lost about $1,200 per ticket after making good on all his orders, but those who waited ended up thousands of dollars underwater for each seat they'd sold. Online, tickets were going for $10,000 and up. On the street, scalper prices were even steeper -- $16,000, according to a video shot by one fan. "They couldn't fulfill their obligations," Lipman said. "They busted their orders."

A StubHub spokesperson told Outside the Lines the company took a $5 million loss to fulfill orders its vendors had promised. Most other ticketing platforms notified customers they couldn't deliver on tickets. Some offered refunds. But others, including SBTickets, kept insisting all was well up to game time.

"As a Seahawks fan, it was the worst day for sure." David Fischer

A day before the game, Seattle fans Gamboa and Fischer still didn't have their tickets and were becoming increasingly alarmed at the inflated cost of everything around the Super Bowl, from hotels to restaurants. A few miles in an Uber cost them $60. It seemed like every bar they went to wanted an $80 cover charge and $25 for a rum and Coke. Even as he drained his special bank account, Gamboa rationalized it would all be worthwhile as long as they got into the game.

"I started calling, sending emails, trying to get some clarity," Fischer said. "Like, give me the specific location. Give me some more specifics. And I wasn't getting clear answers." On Sunday morning, Fischer received an email from SBTickets. "They said, 'We're still trying. Still go down near the stadium before the game.'"

Gamboa shot video of his dejected friends walking through the parking lot. They knew what was coming, but Fischer said they were still devastated when the email arrived three hours before kickoff. "They basically said, 'We've tried to fill all the orders, and that's it.'"

In all, the four friends spent almost $25,000 on tickets, transportation, lodging and food. They ended up watching the game in a hotel lobby two blocks from the stadium. And just when they thought things couldn't get any worse, the Patriots' Malcolm Butler picked off Wilson in the end zone with 26 seconds to go and the Seahawks blew what had looked like a sure win.

"The ultimate kick in the face," Fischer said. "As a Seahawks fan, it was the worst day for sure."

"IT'S BEHIND THE curtain," said Washington State Attorney General Bob Ferguson, who ended up bringing legal action on behalf of Gamboa, Fisher and others who didn't receive their tickets to the game. "It's only when the curtain is drawn back, when something goes wrong, that everybody realizes, 'Oh my God, this is how it actually works.'"

Ferguson attended the game and remembers people complaining outside the stadium. As the night wore on, he heard more and more stories of people who said they didn't get their seats, and by the time he returned to Seattle, his staff was flooded with complaints.

"It became very clear to me that there was a whole lot more speculation going on than I was certainly aware of as a football fan," the attorney general said.

An Outside the Lines review of court records and consumer complaints sent to his office revealed fans spent more than $1.1 million on Super Bowl tickets they never received. Almost three dozen companies were named in complaints to Ferguson's office, including Vivid Seats, the official ticket provider for ESPN.

But Ferguson said, "the worst-case scenario was SBTickets.com" because his office "had the most complaints from them" and the company didn't pay refunds to its customers until after the state sued. Ferguson accused SBTickets of violating the state's Consumer Protection Act.

"In very simple terms, our law says you cannot engage in unfair or deceptive business practice," he said. "When SBTickets advertised on their website, '100 percent guaranteed you're getting your ticket,' that's deceptive. Because folks didn't get their tickets. They could not guarantee them because they were speculating." The company's sole owner was Paul Jones, who launched SBTickets around 2013. According to court records, the company reported only $820 in revenue that year, but earned more than $3.2 million by 2015.

In a series of emails to Outside the Lines, Jones blamed his inability to deliver Super Bowl XLIX tickets on a failed agreement with New York ticket reseller Jason Nissen. "I was operating under an Agreement with Nissen's company to exclusively provide my inventory that year," Jones wrote. "My supplier of inventory failed to deliver."

In federal court records, Jones claims to have paid Nissen's company $1.1 million that year. The same records say Jones lost $1.1 million when he refunded money to his Super Bowl customers.

In March 2018, Nissen pleaded guilty to federal charges that he engineered a $60 million Ponzi scheme that involved promises he could deliver large quantities of high-demand tickets. In reality, prosecutors said, Nissen used victims' money to pay other investors.

Jones, who declined multiple requests for an in-person interview, wouldn't elaborate in emails about his relationship with Nissen. Outside the Lines confirmed that Jones is listed as a creditor in the current bankruptcy case against Nissen's company. The Washington attorney general's office says neither Jones nor his attorneys ever mentioned the Nissen connection. Instead, Jones settled with the state when he agreed to the ticket refund, and he signed a consent decree prohibiting him from selling speculative tickets to Washington State residents under penalty of a $100,000 fine.

Many of Jones' former clients, including Gamboa and Fischer, also filed a class-action lawsuit that sought reimbursement for expenses they racked up in Phoenix. SBTickets later filed for bankruptcy, resulting in a settlement that, when divvied up among 138 plaintiffs, netted them $211.15 each, meaning Gamboa and Fischer each lost close to $3,000.

"It was almost like a slap in the face," Fischer said of the moment he received his settlement check two years later. "Like one more reminder of this awful experience."

IF YOU TYPED SBTickets.com into a web browser before this weekend, you were automatically redirected to a website selling Super Bowl Tickets called fanhospitality.com, which Jones founded in 2017, according to his LinkedIn biography. But as of Sunday, the SBTickets address had gone inactive.

In Minneapolis, Outside the Lines went to the ticket pickup location for Fan Hospitality on the day before last year's Super Bowl. It was at a hotel a few blocks away from the NFL's headquarters hotel. There were signs for both Fan Hospitality and a ticketing marketplace, TickPick, posted throughout a ballroom. Jones was stationed at a computer behind a screen, directing employees who appeared to be fulfilling orders for a line of fans.

The next day, at a pregame tailgate party hosted by the two companies, hundreds of Eagles and Patriots fans drank beer, dug into nachos and played party games. Jones crossed the hotel ballroom to climb on the stage. TickPick CEO Brett Goldberg joined him before announcing to the crowd, "We sold 2,500 tickets this year!" Goldberg then turned to Jones. "Paul Jones is here!" he said. "The head of business development for TickPick!"

In an email, Jones later confirmed his employment for TickPick but added, "I do not speculate or sell Super Bowl tickets." He said he sold Fan Hospitality to TickPick in 2017. Neither he nor TickPick's Goldberg would say if Jones has an ownership stake or any equity in either company.

Outside the Lines found hundreds of Super Bowl LIII tickets for sale on both Fan Hospitality and TickPick since at least October 2018. McCarthy, the NFL spokesman, confirmed the league doesn't distribute the tickets until January.

On the TickPick site, where tickets started at $3,195 as the NFL's wild card weekend finished up, shoppers were greeted with a notification that seats purchased would be available within a mile of Atlanta's Mercedes-Benz Stadium -- exact location to be provided the week of the Feb. 3 game.

Last October, the site told potential customers, "The NFL does not allocate exact seat locations until the weeks leading up to the big game. Our authorized Super Bowl sellers are required to list their tickets as zone listings. Please review our Super Bowl Seating Chart Blog to find out exactly which sections a seller is allowed to fill your order with!"

As of early January, after TickPick received questions from Outside the Lines about its procedures, the wording was more explicit: "Our authorized Super Bowl sellers may not have secured their tickets yet and are required to post as zone listings until they have received their exact locations."

In an email, Goldberg said TickPick "considers speculative tickets to be tickets that are listed for sale or sold before an individual actually owns tickets or before the tickets have been allocated to that individual." When asked how the company could have listed tickets long before they were distributed by the NFL, he referred to the company's user agreement, which tells sellers, "Under no circumstances may you list speculative tickets."

"Speculative ticket sales on the TickPick marketplace are not allowed and we have processes in place to monitor this activity," Goldberg said in the email.

Ferguson, the Washington attorney general, defines a speculative ticket seller as "someone who sells an item that the seller does not own at the time of sale; before delivery of the item is required to the buyer, the seller purchases the item from a third party."

Ferguson said questions raised by Outside the Lines prompted his office to open a new investigation to discover if Jones is in violation of the consent decree, an investigation that is ongoing. The decree prohibits Jones or any company he owns or controls from "selling, offering to sell, or advertising for sale a ticket to a Washington consumer to any event" where he doesn't own or have a right to purchase the ticket within 48 hours.

In an email to Outside the Lines, Jones said he has been "absolutely in compliance with the Consent Decree, which in no way constitutes evidence, fact, or an admission of guilt."

Neither Jones nor TickPick's Goldberg would say if Jones has an ownership stake or equity in either company.

Gamboa and Fischer were furious when they saw video of Jones at last year's Super Bowl. Fischer said the industry should be required to disclose they're selling seats they don't possess. He, Gamboa and Ferguson all agreed that, without some regulation, what happened in 2015 will happen again.

"If people want to gamble, go ahead, but let me know that I'm gambling before I do it," Fischer said. "The fact there's going to be another ticket fiasco like this, and somebody's going to have the same situation as us, is crazy."

Producer Arty Berko of ESPN's Enterprise and Investigative unit contributed to this report.