Clarence Fanto | The Bottom Line: NY probe shines spotlight on fixed ticket industry
LENOX >> Concertgoers seeking tickets for hot acts — Adele, U2, Paul McCartney, James Taylor, Kanye West and many others — are often stymied when the public sale begins.
Chances of scoring a good seat at face-value prices are similar to the spin of a roulette wheel, or so I used to believe. Turns out the odds are even worse because the fix is in, and only the well-connected and the well-heeled get the best crack at landing a decent ticket, or even any ticket.
The consumers' best friend, New York Attorney General Eric Schneiderman, deserves great credit for his report issued this past week, a worthy followup to his efforts to lower the boom on the online phenomenon of fantasy sports gambling.
Not only are "secondary market" buyers – the polite word for scalpers — making it nearly impossible for regular folks to win the ticket-buying lottery, but automated, illegal computer "bots" are doing the greatest damage.
Profiting from pope
The AG's most notorious example from his three-year investigation: Free tickets to a public appearance by Pope Francis during his visit to New York City last year were sold for thousands of dollars apiece.
Other key points from his report:
• A common practice in the music industry, though not illegal, is to put on hold hundreds or even thousands of tickets for performers and sponsors to distribute as they see fit. At least 16 percent of tickets are reserved for insiders like venue employees and promoters, on average, while 38 percent are used for pre-sales to holders of a particular credit card.
• For many popular acts, up to half of the available seats are never offered to the general public. At Saratoga Performing Arts Center, 54 percent of the tickets to most concerts are tied up in holds and pre-sales. For 10 shows by top acts such as Coldplay and Fleetwood Mac, up to 70 percent of the tickets were reserved for pre-sales. Remaining seats for the public to scramble over are generally the least desirable.
• On sites like StubHub and TicketsNow, third-party brokers resell tickets at about 50 percent above the listed price, and on occasion more than 10 times the face value.
• A single high-tech broker used illegal "Ticket Bot" software to purchase online 1,012 tickets within one minute to a U2 concert at Madison Square Garden on Dec. 8, 2014, despite the arena's claim of a four-ticket limit. By day's end, that broker and one other had 15,000 tickets to U2's North American shows. Naturally, the tickets were marked up by at least 50 percent.
• Venues and sellers like Ticketmaster add convenience charges, service and processing fees averaging 21 percent to the face value of tickets. Among the 150 venues examined by Schneiderman's office, in some extreme cases, the fees exceeded the actual cost of the ticket.
"Ticketing is a fixed game," Schneiderman stated. "My office will continue to crack down on those who break our laws, prey on ordinary consumers and deny affordable access to the concerts and sporting events New Yorkers love. This investigation is just the beginning of our efforts to create a level playing field in the ticket industry."
He has urged eBay subsidiary StubHub to delete "speculative" ticket listings for a Bruce Springsteen concert as brokers sought to sell seats they didn't even have.
To her credit, Adele has tried to prevent the sale of scalped tickets.
Legal but unethical
Over recent years, James Taylor has expressed to me his concern about practices that may not be illegal but prevent fans from getting tickets to his generally sold-out appearances. A limited number of pre-sales to his online fans are one technique that ensures at least some seats are sold at face value. A look at StubHub reveals the exorbitant prices being asked by re-sellers for his July 3 and 4 Tanglewood performances.
Candidly, it's hard to fathom how Schneiderman or any other attorney general can overturn long-standing music industry ticket-selling norms that may be unethical but don't violate current laws. It is encouraging to note that in several cases, the New York AG won $80,000 and $65,000 settlements with two unlicensed brokers who flouted the law.
I've encountered some concertgoers and sports fans willing to pay extra, calling it their choice in a free-market economy.
But for the rest of us, it's worth noting that performers, trams and leagues have the power to curb abusive ticket practices.
My go-to expert on sports points out that teams and leagues encourage pricing markups.
For example the Golden State Warriors, basketball's hottest team, has over 20,000 people on a waiting list for season tickets. Yet, as the ads drum constantly: "The games are never sold out."
NBA teams are partners with Ticketmaster in resales, just as Major League Baseball partners with StubHub. Teams profit handsomely from over-priced resales and they actively encourage season ticketholders to partake in the resale market.
Bottom line: The pro sports industry should be held to higher standards, to put it mildly.
Despite a society riddled with economic inequality in so many areas of daily life, it seems that having a shot at buying a ticket on a level playing field is reasonable and only fair.
Performers should take whatever action they can to ensure the loyalty of their fans and to strike a blow against those seeking to exploit the public and rig the system.
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