I, For One, Welcome Our New Ticket Overlords

10 Comments / Economics, Miscellany, Professional sports / By

Michael Giberson

Steven Pearlstein’s column in the business pages of today’s Washington Post takes note of Ticketmaster’s growing efforts to become the officially-sanctioned secondary market for an increasing number of teams, venues, and performers. As we have mentioned here before, active secondary markets for tickets can be a good thing for consumers as well as sellers.

Having “officially sanctioned” secondary markets can be a good thing too. The designation of a particular secondary market will help coordinate buyers and sellers who would otherwise more likely be dispersed over multiple marketplaces. Bringing them to one place should facilitate trading and reduce the bid-ask spread. Such a market can be more efficient.

However, it is one thing to observe that having a dominant place to trade can be a good thing for consumers and quite another to assert that, therefore, it should be illegal to trade on any site not officially sanctioned. Stamping out the competition will clearly benefit the secondary market operator — increasingly this is Ticketmaster — but likely at the expense of consumers and not to their benefit.

Not surprisingly, Ticketmaster is lobbying for the change. (See the Wall Street Journal, listen to NPR or read the NPR story transcript.) Ticketmaster, which once was all in favor of laws against resales (i.e. sometimes called “scalping”), now has the more refined position that an officially sanctioned company should be allowed to resell tickets, but the law should prevent anyone else from doing so.

As Ticketmaster’s president says in the NPR story:

Whoever is putting on the event fundamentally has the right to have certain conditions that have to be accepted by the buyer of the ticket. And a ticket, in most cases, is actually a revocable license and always has been. It’s got privileges and terms of use associated with it.

I agree. If performer or athletic team wants to collaborate in squeezing cash out of their fans to the benefit of Ticketmaster, they should be free to do so.

But fans should be reluctant to support performers or teams that favor calling the cops to prosecute fans that trade tickets. An active secondary market is good for fans and can be good for performers, too. I’m more likely to become a season ticket holder if I can readily unload tickets I am unable to use. Having an officially-sanctioned secondary market may make it easier for me to readily unload tickets. However, if you are going to sic the cops on me if I resell to my co-worker down the hall rather than pay another service charge to Ticketmaster, maybe I’ll pass on those season tickets.

10 thoughts on “I, For One, Welcome Our New Ticket Overlords”

  1. Ammonium

    I would imagine that enforcement of non-transferability would be extremely costly for Ticketmaster to enforce. They could make it like airline tickets and put each ticket in somebody’s name, but that would probably cause their prices to go down significantly (I often buy four tickets to an event without being sure who is going) and increase costs in order to check identities. Having cops enforce their contracts is just a load of free money for Ticketmaster, courtesy of the taxpayers.

  2. Donald A. Coffin

    Having a resale site (ala eBay) is one thing. Having a single site that blocks other sites, that operates with the original ticket seller to prohibit “unauthorized” resale, that adds an additional set of huge fees (a recent concert ticket purchase of “$47” tickets wound up costing more like $65 per ticket–nearly 40% in fees and charges), and that allows the original seller to revoke the ticket (as has happened with resales of major league baseball tickets–you are, after all, buying a revocable right to attend the event…)–not so good.

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