Cubs' arrogance hardly at a premium

May 30, 2003

BY GREG COUCH SUN-TIMES COLUMNIST Advertisement

The check number is 0000550638, dated July 1, 2002. It is made out for $755.81 to American Sign Shops on Clark Street. On the upper left-hand side, it says Chicago National League Ball C (Club).

So it comes from the Cubs' checking account.

This is the smoking gun in the Cubs' ticket scam. One check for $755.81 confirms a sham as a sham. And the Cubs are doing it with such galling arrogance, as if they are above it all, above you catching them. Even if you do, so what? They are the Cubs.

American made the sign on the side of the Wrigley Field Premium Ticket Services' building. Premium is the company the Cubs set up to broker tickets, scalp them basically, at prices as high as 30 times face value.

But American Sign sent the bill for $755.81 to the Cubs. That had to be a mistake because all along the Cubs have claimed they set up Premium as a wholly separate company.

It had to be that way under state scalping laws. If you put on an event, you can't charge more than face value for your tickets. The Cubs say they aren't doing that; Premium is.

So the sign company should have billed Premium, right? Not the Cubs. It shouldn't have sent the bill specifically to Paul Rathje, an employee of the Cubs who doesn't work for Premium.

But then there is that canceled check, straight from the Cubs' checking account to the sign shop.

Looking to straighten this out, I marched down to American Sign and asked the owner who he worked with from Premium in making this sign.

''From what?'' he said.

Premium Ticket Services. You built their sign.

''Paul Rathje,'' he said. ''I dealt with him.''

Just so I understand, the Cubs say that they are not Premium, they are separate from Premium and really have very little to do with Premium. And then they paid Premium's bills and did Premium's work.

Look, the scalping, consumer fraud and antitrust laws were set up for a reason. Not just as a minefield for Goliath corporate accountants and lawyers to tap dance around neatly, but actually to protect David.

They were set up to protect the little guy from being duped by a bait-and-switch, to keep him from being defrauded. This isn't a game to be won by technicality, but a means to keep the people with all the money from using their muscle to wring every last penny from everyone else.

The Cubs say that brokering is legal and they set up a broker, so what's the problem?

What they actually have set up, in substance if not form, is another box office. The Cubs wanted to sneak these prices--$1,500 for a $45 front-row ticket to next Saturday's Yankees game--by their fans.

Accountants and lawyers use the term ''arm's length transactions'' as a barometer in such cases. If the Cubs are truly separate from Premium, then their transactions should be at arm's length.

Arm's length?

Cubs executive vice president Mark McGuire is Premium's president. Guess how much Premium pays him for this extra work. Nothing.

Although Premium has its own account, I have a stack of copies of canceled checks from the Cubs' checking account paying Premium's bills--$1,431.70 to an architect firm, $958.05 to a computer company, $565 to a design company, $4,730.64 from the Cubs to Tickets.com. Some of these might be set-up costs, but if Premium is separate, shouldn't it be paying?

To stay within scalping laws, tickets Premium sells must be on the re-sale market. So the Cubs sell their tickets at face value to Premium, to themselves. That's one sale. And then Premium re-sells.

The Cubs have explained their accounting on all of this. When they ''sell'' their tickets to Premium, those tickets have never been printed. Also, Premium never actually ''paid'' for them.

They were sold to Premium on a sort of credit. The numbers were pushed from one book to the other, but no money ever changed hands. Instead, a ticket-printing machine like the ones in the Cubs' box offices was set up at Premium. And when someone bought tickets at Premium, the tickets would be printed right there, with the face value price on them, but sold at scalped prices.

Anyway, Premium wasn't a very effective broker and actually sold only about 10 percent of its supply last year. What did Premium do with the tickets it couldn't unload?

Mostly, it ''returned'' them to the Cubs for a full ''refund.''

Returned and refund have to be in quotes because no tickets were ever printed, so there was nothing to actually return. Just a bunch of numbers one computer click away from moving to another ledger. And no money passed hands, so there was nothing to actually be refunded.

Guess how many ticket brokers are able to return unused tickets for a full refund to the Cubs' box office?

One. Premium, which is wholly separate from the Cubs.

Guess how many ticket brokers have been granted free, unlimited worldwide use of the Cubs' logo?

One. Premium, which is wholly separate from the Cubs.

Guess how many ticket brokers had their bills paid for by the Cubs?

If the Cubs have figured a way around the law, well, pats on the back for McGuire. Pats for the silence and do-nothingness of Cubs president Andy McPhail.

The arrogance is that the Cubs didn't even bother going through the effort of setting this thing up for appearances. Why is it that skirting laws is all their conscience calls for?

In reality, this thing is blowing up in their faces. Bad public relations, a tough judge in the scalping lawsuit against the team (trial date: Aug. 12), and now word is that Premium, thanks to customer anger over the scam, isn't doing well.

The Cubs argue they have set up Premium to somehow protect themselves from the big, bad brokers swarming Wrigley. Now, several brokers say that people keep coming into their shops saying they want the brokers to get their money, not the dirty Cubs.

These brokers were considered the scum of the earth before Premium came around. What does that make the Cubs now? The stuff on the bottom of scum's shoes?

Meanwhile, the box office has been saying forever that Yankees tickets are sold out. They said so to fans who slept the night in their cars to get tickets on the day they first went on sale. In fact, the games weren't sold out, and the Cubs had just pushed tickets to Premium. But last weekend, Chip Caray said on TV that Yankees tickets were available.

What happened? A woman behind the box office window said Tuesday that some tickets had been made available over the weekend but now were gone. Meanwhile, one independent broker is said to have suddenly landed 500 Yankees tickets.

Could it be that Premium can't even sell the hottest sports ticket in town in years and is now returning those tickets to the Cubs' box office to be sold at face value?