Still More on Secondary Ticket Markets: “Scalping Goes Upscale”

Michael Giberson

If my post of last week didn’t sate your interest in economic commentary on secondary ticket markets, here is a much longer piece put out by the Arizona State University business school: “Scalping goes upscale: The secondary ticket market’s online revolution.”

A sample:

Software upgrades have taken much of the back-alley risk out of these transactions, and have encouraged more season ticket sales not only to corporations, but also to entrepreneurial types, who can effortlessly sell off tickets for popular entertainment and professional and collegiate sporting events. Savvy individual season ticket holders can defray the cost of season tickets, even make money on it, by selling off some choice events at a higher price, notes James Ward, a marketing professor at the W. P. Carey School. “Some do it for a living,” adds economics Professor Stephen Happel, an authority on the secondary ticket market who, with [law professor Marianne] Jennings, has written in the Wall Street Journal on the subject.

Ray Artique, another ASU marketing professor, notes how the secondary market can produce benefits for both team and season ticket holders. Having people in the seats generates additional revenue for the venue and teams. Artique notes that when teams can track how frequently a season ticket holder’s tickets are used, the team can reward ticket holders that show up more often with discounts and other incentives. While bar-coding tickets is sufficient to allow teams to track ticket usage, an easy-to-access (i.e. online) secondary market makes it easier for season ticket holders to help the team keep the stadium full.

The article gives a few moments to Ticketmaster, and the company assures us that while it “believes in a free market economy… for any free market to function fairly there need to be rules that protect consumers against fraud and that safeguard the legitimate rights of those who make live entertainment events possible.” What Ticketmaster wishes to safeguard, of course, is its ability to gain exclusive rights to manage resale of tickets.

“These ticketing companies and team ticket exchanges are basically trying to squeeze out the competitive nature of the secondary market under the guise that they are doing it for the safety and convenience of the consumer,” says Happel. “That’s a crock.”