Resale of Event Tickets: Change the Laws or Let the Marketplace Rule?

What should the law do about resale of tickets for concerts, sporting events, and theatrical shows? The recent 12-12-12 concert for which tickets were on the resale market for prices reported to be up to $60,000 brought this long-time question to the forefront.

Because the proceeds of ticket sales for the 12-12-12 concert were going to benefit Hurricane Sandy relief efforts, the huge price markups struck many as wrong because so much money went to the resellers rather than to the charity. Others say the event organizers should have charged more for the event tickets.

The first point is that there isn’t necessarily a common public agreement on whether what is sometimes called “scalping” or the “black market” is wrong. Some believe it’s just the free market at work.

Further, there is little doubt that many state and local anti-scalping laws are not consistently enforced (the scalpers on the sidewalks near stadiums and concert venues make the lack of enforcement obvious). Many laws are on the books that purport to restrict how tickets may be resold (e.g., limits on the markup a reseller may add to the ticket’s face price).

A second factor is the resale market in which artists, promoters, and venues are complicit in selling held back tickets at high prices through ticket resale sites and ticketing agents. The music industry is one partly built for better or worse, on interrelationships. This kind of hidden scalping has become very prevalent.

A third point is the “robots” used by ticket resellers to “crawl” ticketing websites to grab tickets for hot-selling events before the public can buy them.

In a sense there is no easy answer. If tickets are priced to the market, many live events (e.g., Taylor Swift) will be priced far too high for most fans to buy them. If we continue to have a patchwork of poorly enforced laws, few will be satisfied either. The solution may be to use “paperless” tickets (but currently not legal in New York State) sometimes associated with a specific purchaser’s ID in which transfer of the tickets is technologically discouraged.

Many artists, such as Louis C.K. and Sufjan Stevens have used paperless tickets with success. But, it’s true that there are many people invested in the old financial model in which the lack of transparency in the ticketing system provides huge rewards.

With the laws of supply and demand like those of gravity, still in effect, with a finite number of seats available for the hottest events, whether that’s a Led Zeppelin reunion or the Red Sox vs. Cubs World Series Game 7, no amount of legislation will make all the stakeholders – especially all the fans – entirely happy.

In February 2015, our colleague and friend, partner Mark Fischer, passed away. We have made his blog posts available in honor of both his nuanced and wide-ranging knowledge of intellectual property, new media and entertainment law and of his entertaining style. Please read our tribute to Mark in the firm’s Alumni Spotlight publication and his obituary in the Boston Globe.

© 2009- Duane Morris LLP. Duane Morris is a registered service mark of Duane Morris LLP.

The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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