The Voice of e-Commerce

Thursday, October 12, 2006

Whose Ticket Is It, Anyway? New York’s Consumer Protection Board held a hearing last week on the resale market for tickets to entertainment and sporting events. In New York, the market for event tickets is a morass of complexity and corruption, and cries out for the kind of competition and transparency that e-commerce can provide. In 1999, state Attorney General Elliott Spitzer shined a bright light on the shady underground market in New York City, where most high-demand theater and concert tickets are diverted by industry insiders using “corrupt” and “unfair” methods. Based on the Attorney General report, New York’s legislature liberalized the ticket scalping laws last year, making it legal (at last) for you to sell your ticket at up to 45% over face value. But the new law expires next spring, so the Consumer Protection Board is holding hearings to assess the situation and recommend new legislation. Here’s a summary of my testimony: Eliminate price caps for all primary and secondary ticket sellers. If ticket owners are restricted on how and where they can resell, fewer tickets will be available for resale. And for most New Yorkers, the resale ticket market is the only way that they can catch a live game in Yankee Stadium, at Shea, or at Giants Stadium, where season tickets are sold out for the next 25 years. Moreover, an open market will allow flexibility for venues, entertainers and teams to price original tickets closer to true market value. Prior state law prohibited innovative pricing methods and web auctions to capture some of the markups that go to secondary market speculators. Prohibit venues and teams from adding resale restrictions to their ticket policies. Ticket owners should not be forced to use only a venue-approved service to resell their tickets. If you bought the ticket, you have a legitimate property right for that seat, and you should be free to sell that right for any price and on any exchange. Consider this analogy to a similar property right that’s protected in New York: Venues, entertainers, and teams sell tickets in ways that are similar to how landlords rent their apartments. Both want to restrict consumer behavior, whether in a theater, stadium, or a post-war apartment in Brooklyn. Entertainment venues often prohibit concert-goers from bringing in outside food and beverages, just as landlords tell tenants “no dogs allowed”. New York law, however, does not allow apartment landlords to restrict open markets in sublets. In 1983 the New York legislature said that apartment landlords cannot unreasonably deny tenants the right to sublet their apartments. Given that the Yankees have begun “evicting” season ticket owners for reselling their own tickets, New York needs to ensure that ticket owners are allowed to resell tickets on any exchange—not just a service that’s exclusively authorized by venues, entertainers, and teams. Other Testimony eBay, StubHub, and RazorGator testified about their single-minded focus on building consumer trust in online ticket transactions. These exchanges aggressively enforce safe trading policies, and have proven to be ideal partners for state regulators charged with enforcement of consumer protection laws. The most amazing testimony came from an attorney for the NFL, who came to tell us why the NFL wants total control and restrictions on resale of game tickets. She actually said that ticket resale is hurting teams like the Buffalo Bills, who can’t always reach sell-out status for home games, so they can’t show these games on local television—according to the league’s “blackout” rules. Got that? The NFL wants to stop you from re-selling your own tickets, because of a rule set BY THEIR OWN LEAGUE that cuts into their television revenue! The NY legislature will take this up next spring, as will several other states that restrict ticket resale. Join NetChoice to stay informed and be ready to tell your legislators that an open ticket market is the best policy.

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