Last week, a discrimination trial in federal court between Kroenke Sports Enterprises and a former employee offered a behind-the-scenes look at how the shadowy, sometimes shady ticket-brokerage business works, with scalpers often going straight to the source.
Plaintiff Deborah Steele's lawsuit hinged on proving that she was fired from Kroenke Sports -- which controls tickets for the Denver Nuggets and the Colorado Avalanche, Mammoth, Crush and Rapids, plus all concerts and events at the Pepsi Center -- not for scalping tickets, as her former employer claimed, but because she was a fifty-year-old woman. The company, however, maintained that Steele was let go after a whistleblower revealed that she'd been selling tickets to ticket brokers -- an act not only considered unseemly in the business, but one that violates a Denver ordinance.
On the stand, Paul Andrews, head of marketing for Kroenke Sports and a named defendant, described the series of events leading up to Steele's termination, beginning with a phone call he received in February 2004. That's when Jayson Allen, a broker with Alliance Tickets in Englewood, told Andrews that his employees had been providing tickets to brokers, specifically Alliance Tickets. "A woman named Deb" and "a tall black man" had been sending frequent faxes to Alliance and calling a private number in the back of the office, the tipster claimed. Andrews said he took the accusations seriously. His ticket-sales employees knew that it was never acceptable to work with brokers, because he'd made a point of telling them so, he testified. They were kept abreast of undercover sting operations, and a book with pictures of people who'd been caught scalping was even kept in the box office. Andrews and others in management made the rounds during events to ask fans where they'd gotten their tickets -- the better to determine which season-ticket holders might be brokers, or selling to brokers. And he noted that he'd been quoted in the dailies after scalping incidents, making comments such as this: "These ticket brokers do nothing but hold people hostage."
Ticket broker lawsuit
Andrews had wanted to meet the informant face-to-face, he told the court. Allen came to the Pepsi Center the next day and said that he feared his life would be in danger if ticket brokers discovered he was reporting this information. He had been a broker for a few years and had come to dislike the business because he saw how unfair it was to the public, he told Andrews. He didn't think it was right that a Kroenke employee with access to tickets should give them to a broker.
Andrews and other managers decided to investigate the matter by having their IT department run a company-wide search of phone and fax records to see if employees had been contacting numbers at Alliance. The probe identified three salespeople: Deborah Steele, Robert Kinnard and Jon Moore.
On March 11, 2004, Andrews asked Steele to come to his office.
"If you tell the truth, we may not prosecute you," he told her. Confronted by the allegations against her, Steele admitted selling to some individuals connected to Alliance Tickets, Andrews testified. She said she'd never received cash or gifts under the table, and that she didn't remember ever being informed of a company policy against selling to brokers. She also told Andrews that she was not the only person in the building who should be investigated.
Andrews immediately suspended Steele, then fired her the following Monday. Kinnard, who also admitted his guilt, resigned with a severance package. Moore wasn't terminated, because he didn't admit to selling to Alliance Tickets, Andrews explained; instead, he said he was trying to buy tickets for clients to an Avalanche game in Detroit.
Four days after Steele was fired, the company put its brokers' policy in writing. "That was the first time it occurred to me that we should write it down," Andrews testified.
Steele didn't believe she'd gotten equal treatment, and she filed suit against Kroenke, claiming she'd been discriminated against because of her sex and age. In court, she testified that her problems on the job started in September 2003, when Kate Becker, her younger, more attractive assistant, told management she would leave the company if she wasn't promoted. At the time, Steele was earning an annual base of $50,000, plus commission as director of VIP sales for the All Access Club, which provided members special access to concert tickets. In order to create a vacancy for Becker, Steele said, her supervisor, Doug Ackerman, encouraged Steele to apply for a new position at City Lights Pavilion, a joint venture of Kroenke Sports and Clear Channel. Steele was offered the job, then told she wasn't "young and hip enough." A younger, less qualified man was hired instead, she testified.
From that point on, Steele felt she was being forced out of the company. That October, her base salary was cut to $30,000, while Becker was promoted to her level. Steele's working relationship with Ackerman deteriorated to the point that she suffered from anxiety attacks on her way to work every morning and had to go on leave.
As for selling to brokers, Steele testified that she didn't know most of her clients personally, but over the years had learned or suspected that a few of them were ticket brokers. But since those individuals were season-ticket holders for the sports teams as well, she assumed that the company was looking the other way.
In his cross-examination of Andrews, attorney Richard LaFond pointed out that as Steele's supervisor, Doug Ackerman (a named defendant in the case) reviewed all of her contracts and thus knew who her clients were. LaFond listed the names of a dozen alleged brokers, some of whom still have season tickets, and asked how if Andrews -- who's been called the "King of Tickets" -- didn't recognize them as brokers, Steele could be expected to know who they were.
"If she is presented a list of season-ticket holders, isn't it perfectly logical for her to think they are valid customers and can be sold All Access tickets?" LaFond asked
"Yes," Andrews replied.
Into evidence, LaFond offered a list of season-ticket holders who were offered pre-sale tickets to a Jimmy Buffet concert -- a promotion led by Andrews. The seventh name on the list was that of Bruce Brown, who was a co-owner of Alliance Tickets. And LaFond didn't stop there. He also suggested that Andrews, who reports directly to Stan Kroenke, had in the past scalped his boss's tickets. "You have sold Mr. Kroenke's personal tickets for excess of face value?" LaFond asked.
"Haven't you bragged to employees about how much you got?"
Since Steele filed her lawsuit, Andrews said, the company has continued to identify season-ticket holders who are brokers and has taken away their contracts. He confirmed the names of seven brokers who have lost tickets or privileges, he testified.
LaFond then asked Andrews to explain the Denver ordinance concerning scalping. "It's illegal to buy or sell any tickets above face value in the City and County of Denver," Andrews replied.
"Is it also illegal to sell tickets to individuals who you know are going to resell them above face value?"
"So you would have been violating the ordinance if you sold Kroenke's tickets?"
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In a statement to the court, Stan Kroenke -- who does not participate in the day-to-day operations of Kroenke Sports -- said Andrews and Ackerman "informed me that selling tickets to ticket brokers was contrary to company policy" when they told him about the investigation and Steele's termination.
During closing arguments on July 28, LaFond told the jury that Kroenke Sports conducted "a sham investigation and found exactly what they were looking for: any reason to throw her out the door."
But defense attorney Raymond Deeny argued that Steele's theory that Kroenke officials plotted to fire her because she is a middle-aged woman was preposterous. "Whenever you hear conspiracy, beware," he said. "The conspiracy probably doesn't exist." Steele knew she was dealing with brokers and knew it was wrong, but chose to run her shell game anyway, he told the jurors.
They must have believed him. After hours of deliberation, the jury reached a unanimous verdict: Kroenke Sports was not guilty of age or sex discrimination in its decision to fire Steele.