Venues and ticket resellers gear up for legislative slugfest

Monday, February 4, 2013 at 2:43am

Buying a ticket is one of the more common American consumer experiences. To concerts, theater performances and sporting events, tickets are the way you get in the door.

The box office, these days, is everywhere — see the Internet or digital tickets on your smartphone — which would suggest that obtaining tickets is easier now than ever before. But the myriad options available to those looking to purchase tickets has come at a price.

As it turns out, those tickets listed “For Sale,” at a discount, on a website bearing the name of one’s favorite artist may not exist yet. The increasingly frequent instant sell-out is often a mirage. Tickets may be easier to buy, if you’re willing to look, but they are also much easier to sell — a fact that has brought about a whole new list of deceptive tactics for the buyer to beware.

The brave new world of ticket sales has put at odds the multi-billion dollar industries  built around them. Their fight is over the price of tickets, when they’re sold, how they’re sold, and even what you’re selling when you sell a ticket. And all the while the fan — the interests of whom are ostensibly the sole concern of each side — is in the middle, just trying to get in the door.

 

 

 

People bearing “I Need Tickets” signs have long been part of the scenery that comes with sporting and entertainment events. As long as there are venues with a finite number of seats, it seems likely there will be individuals looking to leverage that scarcity for a bit of extra cash.

But the burgeoning secondary ticket market on the Internet — which reportedly accounts for billions of dollars in transactions each year — is the domain of a new kind of scalper, and the impetus for an escalation of hostilities between factions within the ticket-sales industry.

With the new legislative session just getting under way, Tennessee is set to serve as one front in a political proxy-war between ticket-sales giant Ticketmaster and StubHub, the most prominent site for ticket reselling on the web.

Both have started nonprofit organizations dedicated to fighting over the regulation of the secondary market, in state legislatures in Florida, New York and Massachusetts, among others. As their names suggest, both sides claim to be primarily concerned with what’s best for the fans — from StubHub comes the Fan Freedom Project, and from Ticketmaster, the Fans First Coalition.

Often, StubHub, by way of the Fan Freedom Project, has been on the offensive. In Florida and New York, for instance, they have supported legislation prohibiting ticket vendors from putting restrictions on the resale of tickets, such as using paperless tickets exclusively, and making tickets non-transferrable. They also supported a Massachusetts bill that would have done the same, and also required venues to disclose the total number of tickets issued, and the number that will actually be available to the general public.

(Often, a large number of tickets are held back for fan club members, or other presales for, say, American Express cardholders. A NewsChannel 5 news investigation last year found that of 14,000 total seats available for a Justin Bieber show at Bridgestone Arena, just 1,001 were available to the general public by the time tickets went on sale.)

But in Tennessee, things are headed in the other direction. The Tennessee Sports and Entertainment Industry Coalition, a 74-member group, is pushing the Fairness in Ticketing Act, a bill they claim would address many common ticket resale tactics that aren’t aboveboard. The high-powered TSEIC member list includes management agencies and artists from The Black Keys to Eric Church and Jason Aldean; venues such as Ryman Auditorium and the Orpheum Theatre in Memphis; and the state’s three major professional sports teams, the Predators, the Titans and the Memphis Grizzlies, along with their associated venues. Many among the group are Ticketmaster partners, though some are not. The Fans First Coalition, and Ticketmaster, support the legislation but have been less overtly involved in pushing it than the Fan Freedom Project has been in opposing it.

The bill was originally filed during the 2012 legislative session, but was sent to a Senate study committee, which heard testimony on the matter from both sides at a hearing in November. Sponsors Rep. Ryan Haynes (R-Knoxville) and Sen. Ken Yager (R-Harriman) filed the Senate bill on Friday. A companion in the House is expected later.

The legislation aims to distinguish between the fan who attempts to offload a ticket due to unforeseen circumstances, and the hardcore scalper. It would require ticket brokers — defined as anyone who resells more than 60 tickets in a year — to register with the state. Registration would be used to make sure such brokers pay sales and use tax on transactions, but also to require that they disclose certain information about the tickets they’re selling, such as the face value and exact location of the ticket, and whether the seller actually has the ticket in their possession.

 

 

Coalition members said they believe requiring increased disclosure by the reseller would cut down on deceptive practices run amok in the secondary market.

One such tactic is speculative sales, like those being offered on the newly announced Beyonce concert at Bridgestone in July. The uninitiated buyer wouldn’t know it from browsing the ticket options on AllGoodSeats, but the sellers do not possess the tickets they’re selling. Since they haven’t yet gone on sale — either to exclusive fan clubs or the general public — no one does. But for 10 times more than face value, in many cases, an anonymous, and often out-of-state, individual will sell you a specific section and row. (Bold as the venture is, few are brazen enough to offer a seat number.)

What they’re really selling is a bet, a high-priced wager that they will be able to obtain the ticket you think you bought when the real thing goes on sale. In the more insidious cases, industry members said, are sites that use artists’ names (check out JustinBieberTickets.com, for example). And in other cases, resellers will build false venue websites that look identical to a particular venue’s real site, further lending speculative sales the appearance of legitimacy.

Clarence Spalding, of the Music Row artist management firm Spalding Entertainment, said in advance of a recent Jason Aldean tour, numerous sites could be found using Aldean’s name to sell speculative tickets before they had gone on sale. Spalding, whose roster includes Aldean and Rascal Flatts, also managed multi-platinum country duo Brooks and Dunn for 20 years.

The night before tickets went on sale for the duo’s final Nashville show, at Bridgestone Arena, Spalding said he received a call from a local broadcaster who told him it appeared the act was scalping their own tickets. A man in Dickson had reported that tickets to the show were available for $300 on a site bearing the Brooks and Dunn name. That couldn’t be, Spalding said, because tickets hadn’t gone on sale yet, and the group had worked to keep the price of admission to $25 in the hopes that no fan would be priced out of the farewell show. Nonetheless, Spalding said, the broadcaster was all but convinced — after all, the man in Dickson had a screenshot of the website.

What happens next will be more familiar to fans who have logged onto Ticketmaster, or a venue site, less than five minutes after the start of a ticket sale, only to find that a show has already sold out. Under the gun to obtain tickets they’ve already sold, the most sophisticated scalpers will deploy “bots” on the day tickets go on sale. The bots are essentially software designed to gobble up tickets faster than any single person could.

By snatching up an already limited supply, bots ratchet up demand. What already would have been a coveted ticket becomes an instantly sold-out show.

British folk-rock quartet Mumford and Sons is an undeniably popular act. But the proof is in the full house that saw them play three straight shows at the Ryman nearly a year ago, not the mere minutes it took for all three shows to sell out. Many of those tickets initially went to people with no intention of stepping foot in the Mother Church.

Spalding said after reviewing ticket sales for one of his artists, his firm found that one person from the same Internet Protocol (IP) address had used multiple credit cards and multiple variations of their name to buy upwards of 400 tickets.

“To simplify it — if we were in the old days, it would be people lining up at the box office and these guys coming in, and 30 of them jumping in front of you, and another 40 jumping in front of your friend, and another 50 jumping in front,” he said. “And when we go back and do the check on who bought the tickets — we can’t do it right then, but the following day we can pull these — what we find is you have people in Philadelphia, Cleveland, Las Vegas, New York, buying these tickets.”

 

 

The TSEIC and the Fan Freedom Project actually agree about opposing the aforementioned deceptive and misleading tactics in the secondary market. But while members of the industry coalition said the bill is needed in order to “bring the secondary ticket market out of the shadows” and “create a level playing field for consumers,” opponents say the transparency it calls for is one-sided, its supposedly consumer-friendly aims disingenuous, and its application overbroad — “like using a cannon to shoot a fly” as one Fan Freedom representative put it at the Senate hearing in November.

The primary points of contention are two lines in the legislation: The first addresses the methods in which primary tickets are sold, and the second concerns what we talk about when we talk about tickets. (Both were included in last year’s bill, and according to the framers of the legislation, will appear again in the new bill as well.)

One is a line stating that tickets are a “revocable license” that may be revoked at any time by the ticket issuer, with or without cause. Proponents of the bill argue it’s simply a statement of current law. They cited a 1916 Tennessee Supreme Court decision in the case of J.M. Boswell v. Barnum and Bailey, which identified a ticket as a “mere revocable license.”

“It is true under the great weight of authority that the right of the purchaser of a ticket to enter and remain at a theater, circus, race track, or private park is a mere revocable license,” wrote Justice Grafton Green in delivering the court’s opinion. “The proprietor of an amusement enterprise may deny admission to any one, and one having entered may be forced to depart on request, and, if he refuses to depart, he may be removed with such force as is necessary to overcome his resistance.”

The bill’s opponents do not disagree, insofar as a venue has the right to kick out an unruly drunk, or otherwise disruptive ticket holder. They object, however, to codifying the right of ticket issuers to revoke tickets, citing fears that venues and sports teams could use that power to control the market.

“What does that mean when the Tennessee Titans decide they don’t like season ticket holders selling tickets for below face value, if they still have inventory at the box office?” said Chris Grimm, spokesman for the Fan Freedom Project. “And they start revoking fans’ tickets, because they’re trying to dump tickets to a terrible game on a rainy Sunday, late in the season when the Titans have no chance of making the playoffs.”

Similarly, Grimm said the group opposes another section of the bill, which states that ticket issuers can use any lawful method they choose when selling tickets. Again, coalition members said the section simply reiterates a right venues and ticket issuers already have. But the Fan Freedom Project sees a Trojan horse.

“What we think this does is this puts into law the right for the ticketing industry — ticket issuers, artists, venues, sports teams — it gives them the legal power to sell tickets that carry restrictions,” he said.

In other words, if passed, the bill would effectively serve as legislative approval of paperless, non-transferable tickets, which they said would be used to control, if not eliminate, the resale market.

The fight over paperless ticketing is somewhat curious in light of the seeming inevitability that tickets will go digital. Eventually it’s likely there will be a fight over the transferability of paperless tickets, but not over whether tickets should go digital. For now, though, paperless ticketing has been used by certain venues, artists, and ticket issuers like Ticketmaster as an anti-scalping tool.

There’s no denying the method cuts down on illegal resale tactics, or at least reduces their effectiveness. But opponents say the practice and the legislation burden the consumer and unfairly eliminate competition.

In most cases, paperless ticketing requires a person to come to the venue with the credit card they used to purchase their tickets. For someone wanting to sell off a single ticket, or even give a ticket to a friend at the last minute, that could mean having to physically go to the venue to allow the new ticket user to get in.

In a letter to the Senate study committee in October, Elizabeth Owen, former director of the Consumer Affairs Division of Tennessee, said allowing ticket issuers to use any method they choose restricts consumers for the sake of increased profits for Ticketmaster and others.

“With traditional methods eliminated (i.e., handing off a ticket, emailing a printable ticket, or leaving a ticket at Will Call), consumers are forced to use the ticket issuer’s website to transfer tickets from one person’s credit card to another person’s credit card,” wrote Owen, who now works as a consumer advocate with the Fan Freedom Project. “Under this transfer method, ticket issuers can use technology as a scapegoat to limit consumer choice in the secondary market, which means more profit, because the event producer and Ticketmaster are now the only source for the resale of tickets.”

Coalition members, however, point to the success of Michael Marion, who runs the Verizon Arena in Little Rock, Ark. According to an article by industry gadfly Bob Lesfetz, Marion uses paperless ticketing for the best 4,000 seats in the arena, for every show. Lesfetz reports that Marion has had little trouble dealing with the problems cited by naysayers, and that the method has been a hit with fans.

 

 

In her office on the third floor of the James K. Polk State Office Building, Kathleen O’Brien presented The City Paper with the results of a Yahoo search for “Lion King Nashville.” The international Broadway blockbuster will be playing at the Tennessee Performing Arts Center this summer, but the venue’s site, where tickets are currently on sale, didn’t appear on the first three pages returned by the search.

O’Brien, president and CEO of TPAC since 2005, pointed out that many of the sites were offering “discounted tickets” that were actually considerably more expensive than what was available through the theater. That’s a problem, she said, for a number of reasons, not the least of which is that new or less frequent customers — the ones that traveling Broadway productions are more likely to attract — are getting ripped off.

For one thing, should a problem arise with the ticket — perhaps it’s a counterfeit ticket, or ends up being for a different seat than was originally advertised — the ticket holder will understandably expect TPAC to help sort it out. The theater is happy to try, O’Brien said, but the situation is complicated. Though they may not have realized it, the ticket holder is not actually a TPAC customer, meaning the theater has no record of the transaction or the customer to work with.

And she said there are further negative effects on venues and the businesses around them. Nashville is full of relatively cheap entertainment options, so venues like TPAC — which has not been a Ticketmaster affiliate for four years — try to keep ticket prices as low as possible. If customers pay three times face value for a ticket to Lion King, O’Brien said, will they spend as much on dinner before the show, or drinks after it?

“What we’re trying to do, and what the Ryman is trying to do, and what Bridgestone is trying to do, and all of the venues that sell tickets — we’re trying to provide an experience, with a family or whoever, with some type of entertainment or sports event,” she said. “We’re trying to provide a service and an event. What secondary ticket brokers are trying to do is make money.”

Perhaps sensing the obvious retort, she continued.

“Are we trying to make money?” she said. “Of course we are. We have to. That way we can bring the next show in. But we’re not trying to do it off the back of our patrons. That’s the difference.”

The Fan Freedom Project, and the 150,000 live-event fans they claim to have on their side, argue that venues, artists and the state can address the secondary market evils they cite by using current law. Indeed using bots is already illegal, as is the unauthorized use of a trademark in a website URL.

“If the ticket industry wants to stop scalpers, artists should look at their fan club lists and start kicking people off their fan club lists who are clearly scalpers,” said Grimm. “Ticketmaster should file complaints with the authorities about who’s using bots. Bots are illegal in Tennessee, and whenever there is clear evidence of bot use, they should absolutely report that and revoke those tickets. They should go after the people who are really doing harm, and not treat all the fans like they’re scalpers.”

Both sides accuse the other of disingenuous behavior in the name of consumer protection. While the Fan Freedom Project opposes what they see as thinly veiled attempts to legalize market control by Ticketmaster, industry coalition members say their opponents are simply objecting to a pre-emptive strike in the ongoing fight. They say the Fan Freedom Project opposes codifying the definition of a ticket as a revocable license, and the rights of a venue to use any ticketing method, because the group is actively working to prohibit those things in other states. As for transparency, coalition members say opening up the ticket manifest to the public, as Fan Freedom Project members call for, would simply help professional scalpers know how much more they can charge for tickets (which in turn, would benefit StubHub, which takes a percentage of each transaction on the site).

When it comes to who’s looking out for the little guy, though, O’Brien suggested it’s the artists, sports teams and venues that have a stronger claim. The anonymous scalper reselling tickets by the hundreds isn’t walking through the doors, or sitting in the seats. 

“The individual patron trying to accommodate his or her needs, we want to support. And we want the laws there to support and help you. What we’re not concerned with is having laws favorable to the secondary market, as if it’s the tail wagging the dog. That’s not our concern. That’s not where our loyalties, that’s not where our responsibilities lie.”

 

Correction: A print version of this story references a set of One Direction tickets which were not yet available to the general public. Those tickets had been placed on sale in April 2012. The City Paper regrets the error.
 

5 Comments on this post:

By: rickmuz on 2/4/13 at 8:28

"It would require ticket brokers — defined as anyone who resells more than 60 tickets in a year — to register with the state"

Well my goodness, lets go ahead and pass this then. I mean after all, everyone conducting a criminal enterprise will line right up and register just like the drug dealers register with the department of revenue as they are required to do.

I work in the touring side of the music industry... ATTENTION FANS (And STUPID parents wanting to be your child's best friend instead of their PARENT) do you want to stop scalping? It's real easy, when those idiots beat you by buying up all the good seats when all you want are two... LET THEM BUY THEM, LET THEM KEEP THEM and you walk away. It will only take a few shows NATIONWIDE of these VASTARDS not making any money to put the brakes on the practice.

Scalpers thrive because YOU let them!!!

By: asdk347 on 2/4/13 at 12:05

Just glad someone is addressing this problem, particularly the issue of the automated bots. Wholesale scalping has made the landscape difficult for the average music fan; you see scalpers right out in the open at presales at the Ryman and Third Man. Too bad it's taken the current slump in concert tour profits to get anybody to act on this, but hey, we fans will take whatever action we can get.

p.s. just telling fans to avoid shows by artists they love is not the answer. The solution isn't depriving fans of beloved musicians; it's getting scalping under control. Everyone else pays sales tax - why shouldn't these guys? Also, it makes no sense to claim it's pointless to pass laws b/c people will just disobey them - do you think we should revoke speed limits, legislation against child abuse, or any one of millions of other pieces of legislation currently being flouted by someone? Come on.

By: BobtheFarmer on 2/4/13 at 12:09

PURE AND SIMPLE..... fans is short for fanatics. STOP paying more than face value. This is a problem ONLY because fanatics are willing to pay many times the face value. I agree with rickmuz, if you stop paying more than a ticket is worth, these bozos would be out of business.

It sickens me that people expect the government to protect them with stupid laws to protect them from their own stupid behavior.

By: Bellecat on 2/6/13 at 9:33

Tried to buy a George Strait ticket by phone at the local venue where the show will be held. Was told by the ticket seller that they sold out within minutes of it being posted online. This did not happen back before internet sales-- I could walk into several places that sold tickets and leave with the ticket in my hand. Also, I remember the limiiting of the number of tickets one person could buy. The internet has brought many aggravating scenarios to life which we would never see otherwise. I never buy from the secondary market , so there will be no Strait show for me. It is kind of disgusting when fans cannot get tickets because of the greed for the money involved.

Also, to define a ticket broker as "one who resells more than 60 tickets in a year" is ridiculous. If you "resell" tickets more than once or twice in a year, you are in it for the money, not trying to see the show. Clearly something needs to be done, but it is always about the money and who ends up getting it.

By: alfie on 2/8/13 at 9:00

Wow ... this article is WAYYYY too long. KISS.

What really bums me is that none of the huge overcharge I just paid for a Ryman show (like almost 100%) goes to the venue, the artists, the setup or cleanup crews, etc. Does the Ryman not care or do they feel they can't do anything?