2010-06-24 / This Week's Attitude

Ticket Scalping – In Any Form – Is Unfair To Consumers

This Week’’s Atti tude
By Neil S. Friedman
Summer’s here and the time is right for dancing in the streets, as the classic Motown lyric goes, but summer also means dancing in the aisles as a glut of concerts are staged across the country. With those concerts, scalpers and ticket resellers – legitimate and otherwise – ordinarily anticipate a lucrative season.

The concert business has taken a hit this year and expected to bounce back this season as classic, popular and emerging bands play arena and stadium shows. However, partly due to the drawn out economic recession, sales are lagging after last year’s worldwide record-breaking ticket sales topped $4 billion, and many acts will likely perform with more empty seats in the house than they’d hoped. The slump is also attributed to excessive service charges that jack-up already higher ticket prices by ten percent or more and will also cut into scalpers’ profits over the next three months.

Scalpers – illegal ticket sellers – must have cringed a bit when U2 cancelled 16 dates across North America after lead singer Bono came down with an aching back, and Christina Aguilera and the Eagles postponed or trimmed their schedules.

Scalping has been a part of the live music scene ever since tickets for the most popular acts became harder to obtain, especially in large urban centers where it’s customary to see dozens of individuals hawking tickets outside a venue at twice the retail value. Though local law enforcement and promoters attempt to thwart that sort of ticket reselling, it continues.

In a blow to scalpers – and consumers – the federal government approved the merger of the nation’s two largest concert promoters earlier this year; months after company executives testified before a Congressional committee and convinced them a merger would benefit everyone. (The new company would undoubtedly benefit most of all.). When you come right down to it, it was a concession to big business lobbyists that produced a music industry superpower. The merger between the world’s largest concert producer, Live Nation, and the company that sells the overwhelming majority of concert tickets, Ticketmaster, created Live Nation Entertainment, a company that represents over 200 top music acts, including Madonna, Jay-Z, U2 and the Eagles, and now controls over 135 venues nationally. That means bands that want to perform in arenas across the U.S. now have to deal with a corporation that controls 46 percent of the concert business. In addition, the company has a virtual monopoly with exclusive ticket-selling deals through – tada! – Ticketmaster.

Though the company’s honchos unsurprisingly touted the merger as an improvement for the concert business because it will help keep most ticket prices down, even as it raises the cost for “premium” seats and concert packages, consumer advocates believe the reduction in competition will see an escalation in ticket prices that, in many cases, are already over $200 each for veteran acts. But some emerging and established acts, like Green Day, Kings of Leon and the Dave Matthews Band, are keeping top ticket prices under $100. By the way, though he could charge upwards of $200 for the best seats, the retail price for Bruce Springsteen concert tickets have never topped the century mark, while his peers, such as Jackson Browne, Tom Petty and Sting, double that rate for prime seats.

Pop music is not the only genre affected by scalping and ticket reselling rip offs. Major sports, such as baseball and football also have a fair share of ticket reselling. Twenty six states have anti-scalping laws. As New York’s dysfunctional legislature is still mulling over the new budget, it is also debating a new ticket-scalping law to replace one that expired.

Under that 2007 legislation, ticket brokers and other secondary ticket selling establishments, like StubHub, were authorized to sells tickets higher than retail, but with a limited pricing. Crackdowns are still regularly conducted outside of concert venues. Nonetheless, to consumers trying to get tickets for their favorite band or team, if a ticket is sold at more than its retail value, it’s still scalping, no matter what the law says.

No matter how you look at it, scalping is here to stay as long as there are advance sales, but any law that sanctions selling tickets above the retail price, even in a free market economy doesn’t benefit consumers. To fans, it’s still scalping.

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