NY Attorney General Takes On Ticketing: ‘54% Of All Concert Tickets Are Reserved For Insiders’
Earlier this week we reported on how 6 sales executives had been fired for profiting from the unauthorized resale of tickets at NYC's Madison Square Garden. Unsurprisingly, we're now learning, that was just the tip of the ticket fraud iceberg.
New York Attorney General Eric T. Schneiderman has released the findings of a wide-ranging investigation into the alleged abuses of the concert and sports ticket industry.
The report, entitled “Why Can’t New Yorkers Get Tickets?” is the result of a three-year investigation of the online ticketing business, offering a glimpse at the secondary ticket market where he says ticket companies and brokers profit at the expense of the consumer.
According to the investigation, more than half of all tickets to many popular concerts are never made available to the general public in the first place. Rather, a majority of tickets for major entertainment events are either put on “hold” and reserved for a variety of industry insiders including the venues, artists or promoters, or reserved for “pre-sale” events and made available to non-public groups, such as those who carry particular credit cards.
On average, the investigation found that more than half of all tickets — 54 percent – are reserved for insiders. Those reserved tickets are split between insider holds (16%) and pre-sales (38%).
Ticketmaster fees add 21% and sometimes more than the face value of the ticket itself
In addition, the investigation found that venues and ticket sellers like Ticketmaster regularly tacked on fees that added more than 21% to the face price of tickets, and in some extreme cases, added more than the face-value price of the ticket.
The investigation also looked at third-party brokers who resell tickets on sites like StubHub and TicketsNow, and found that the tickets were resold with average margins of 49 percent above face-value — sometimes more than 1,000 percent.
The investigation found that some brokers used illegal automated software to quickly purchase and resell large amounts of tickets at a significant markup. In one case, the investigation says, a single broker used automated software to purchase 1,012 tickets to a June 2015 U2 show at Madison Square Garden within the very first minute of the sale.
An "unscrupulous system"
"The revelation that the concert and sport ticket industry is unfair is nothing new, however discovering how deep it goes is certainly unsettling,” said Assemblyman Jeffrey Dinowitz, Chair of the Assembly Committee on Consumer Affairs & Protection. “This unscrupulous system is detrimental to the thousands of fans out there who are just trying to see their favorite show or sports team. Ticket vendors charging substantial fees, or withholding tickets to distribute to industry insiders have created a system that is decidedly unfair to the general public."
Calls for transparency
The report makes a number of recommendations, including encouraging concert promoters to be more transparent about how tickets are made available to the general public and for secondary market services to be more proactive in policing their service. The report also urges the state’s Legislature remove its restrictions on paperless ticketing, which is designed to put the kibosh on scalpers, but is rendered ineffective due to the requirement that shows offering nontransferable paperless tickets is also required to offer them in transferable form, undercutting their purpose.
In a statement to the New York Times, Ticketmaster, said that it cooperated with the investigation and that the company supported the attorney general’s efforts to manage bots and the elimination of the paperless ticketing ban. A spokesman for StubHub said he had not seen the report and could not comment.
via Celebrity Access