Sports fans are victims thanks to Stubhub and legalized ticket scalping
“Scalping", often defined as reselling tickets for higher than face value, is illegal in many parts of America. It’s illegal much like “happy endings” at 24-hour massage parlors. So long as its done discreetly, you shouldn’t have to worry about being locked up.
The good thing about an online ticket brokerage or auction site is that if you don’t feel like camping outside a stadium for 72 hours or don’t know the “guy behind the guy", you can still get to those front row seats to REO Speedwagon’s latest tour. Finding tickets used to be the hard part. Now it’s finding tickets at face value.
Today, anyone can scoop up 20 tickets to every single sporting event before the season begins at a venue that usually sells near capacity. Then without actually going to any of these games, you can sell huge lots of tickets above face value for a profit. Go to any online ticket brokerage and you’ll see lots of 12-16 or even more seats together. Are we supposed to believe some coach bought tickets for his entire AAU basketball team, for every game, in the same seats, then had a change of heart, and will now try and make a few bucks off of it to maybe pay for their jerseys? Of course not. It’s just one of many shady-yet-legal ways to make a few bucks on the internet.
This, along with season ticket holders who don’t show up to all their games, is probably why “sold out” venues often look 2/3 full.
Reselling tickets at face value is legal in most parts of the U.S. and eBay justifies why it’s okay for them to do it on their site.
I was at the Verizon Center in Washington D.C. catching a Capitals game and there were StubHub advertisements on the scoreboard, spitting in the face of all of us who paid double of what we should have after huge lots of tickets were bought out, probably in August. Financially, venues shouldn’t care about these brokerages, because they are probably selling more tickets this way. This is why I’m paying $30 for $10 bleeders at midseason NBA games in Chicago or $25 for $8 foul line seats at Comerica Park. If they had any interest in protecting the fan, they would do something about this. The New England Patriots have sued StubHub, and the New York Yankees revoke season ticket holders’ tickets if their tickets are found on StubHub. On the other hand, the New Jersey Nets and Chicago Bears encourage fans to go to the site.
Golf is affected too. On the good side, you can secure Masters tickets, which can take a lifetime to get without knowing the right people for $5,000. For an average tournament, like the Buick Open at Warwick Hills, tickets range from $85-185 depending on the round at StubHub. The PGA Tour site lists these same tickets at $30-35 a day. Doesn’t this mean the law is being broken?
Curious, I gave StubHub a buzz and asked them how their site manages to dance around this. I was informed that two states, Connecticut and North Carolina, have very strict laws, and when sellers list where they are selling the tickets from, if it one of these states, they are more closely monitored. For the rest of the states, they simply said “each state is different” and that sellers are informed to “abide by their state’s laws". I spoke with people from two different departments and neither was either willing or educated enough to give me specifics. StubHub makes one thing perfectly clear however: they are simply a third party and not the seller themselves (read: you ain’t suing us!)
According to this article from the Detroit Free Press, ticket reselling was ruled legal so long as it’s equal or below face value. Above face value is punishable by a $500 fine or 90 days in jail. I have reported the tickets in question at the Buick Open to StubHub and rest assured I will receive an excuse as to why this is allowed within 24 hours.
Two things are clear in all this: 1. the laws are pretty fuzzy with plenty of holes. 2: the little guy, and I’m not talking about Tadd Fujikawa, loses out in all this.
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Stubhub has helped revolutionize the industry because they have safeguards in place that prevent buyers and sellers from ripping each other off. Many other above-ground on-line resale companies hold themselves to the same high standards as Stubhub has in place. That means consumers get better prices and safer transactions than they did seven years ago.
It is easy to target secondary ticketing market sites because the tickets go over face value. However, on-line sites of today offer a better and safer alternative than what has existed in the past and clears the way for an overall more transparent experience for the consumer. The future of the secondary market appears to favor the consumer which is why we support the continued roll-back of anti-resale restrictions.
I appreciate your feedback. I would agree that online sites make it easier to find tickets. I don't share your sentiment on value, however. $10 tickets are going for double and triple the cost for games that might not even sell out if it weren't for mass brokerage buying. In the end, the market dictates the price of course, but I think this ultimately takes away some power from the average sports fan who isn't savvy enough to find a way to make a few bucks off tickets. Professional games have become priced out of many family's budgets and in my opinion from what I've seen shopping on the site, StubHub doesn't help. It's much like file-sharing on the internet in a way. It can provide an alternative to the market in a positive way, but is ultimately abused by many users.
Billy, I don't find it ironic at all that StubHub advertises with us through Google, because any company that agrees to advertise with an editorial publication that has columnists and bloggers should know anything is fair game. Those ads next to my blog are also generated via keywords much like if you have a free email account that scans your emails that are open and gives you ads based on the topic of the email.
2.) SeatSmart: Nice cut-and-paste. I'd like to hear your (not your company's) reasoning as to why driving ticket prices up "favors the consumer".
3.) Billy: Brandon's not a lawyer, nor did he earn a degree in business, I'd guess. He's a journalist. Last time I checked, business and law classes weren't required for a journalism degree. Shouldn't you be doing something more productive with your JD/MBA than trolling blogs to defend companies that exploit consumers? Brandon's company is making money off of the advertisements, not his blog. Sure, his company pays his salary, but his salary doesn't increase or decrease as a direct result of the number of hits that StubHub gets from worldgolf
Thanks for the info about Stubhub and eBay. Do you always comment on blogs before reading past the 3rd sentence?
As far as my blog and StubHub advertisements go, I believe what's up there is Google Adsense, which pays by the click, or something. Not 100% sure.
My Answer is that it's increasingly difficult to buy from TicketMaster and the venues itself at the last minute because other brokerage firms buy up masses of tickets. Try buying tickets to a decent NBA or MLB game that week and it's slim pickin's. Sure, I could have the foresight to buy the tickets in August, but what if I just found out I'm going to be in a certain town next week where the Pistons are playing? Then I'm screwed. My best bet is to buy from a scalper after tip-off on the street. - which is also illegal in a lot of states.
Ticketmaster, pretty much a monopoly in its own right, is becoming a middleman as a result of these brokerages. If I had to take a guess, for every person that is selling their tickets just to get rid of them, there's about 20 tickets for double the face value coming from brokerages. I'd love to find an actual statistic on this. I'll look around. These sites are a great theory in concept, but horribly abused. Fans lose more than they win.
Good point. I'll concede that I'm wasting my time. If a company is big enough, we really shouldn't question them or call them out about anything because they obviously have the resources to trump a tiny little blog like mine. From now on, I'll stick to rewriting press releases from Nike, Apple Acushnet, etc.
You look hot. I bet you're even hotter in person. Can we meet up sometime?
MYTH #1) It assumes that the brokers are responsible for buying up most of the tickets.
Reality: If you look at ANY listing on stubhub.com, ticketsnow.com or any of the popular broker sites you will find that they hold only about 5-10% of the total tickets sold for the event, meaning that 90->95% of the tickets are going to the fans. (Keep in mind when you see multiple listings on multiple sites, that are using a shared inventory system, so all tickets are listed on one site are the same ones you see on another. Ticket brokers don't stop the average fan from getting a seat... but cater to the less obsessive fan who decides at a time later than the onsale time to buy their tickets.
MYTH #2: Attending events is a right that needs to be protected.
Reality: Events, Tickets, much like a playstation 3 is a LUXURY and not a necessity of life or even a need. In our society, luxuries are set by the fair market. Playstations sold for $2000 and up for people who wanted them by Christmas, but you didn't hear anyone complaining that gamers needed to be protected. Stubhub.com (for example) actually offers protection to the fans, guaranteeing the tickets and offering significant compensation if something goes wrong with the tickets (they will give gift certificates for nearly double the price paid if the tickets turn out to be fake and immediate replacements can't be found). THAT is protecting a consumer.
MYTH #3: Ticket brokering hurts the average fan.
Reality: Ticket brokering HELPS the average fan. The average fan now has access to tickets they wouldn't normally have. Obsessive fans still have plenty of opportunities to purchase either season tickets, mini-seasons or any vareity of ticket options made available to them. The average fan is someone who doesn't necessarily plan, and would probably be facing the inability to attend these events, but for their availability, which, as discussed above is now in a protected and safe environment, instead of cash being exchanged in a back alley.
Along this same line, ticket brokering actually helps keep average prices DOWN. Why? Because the tickets are SOLD, where, but for someone willing to take a risk on a team or event, they might not be. The team/venue would need to find a way to make this money and would be forced to raise ticket prices for everyone on a more consistent basis. The teams, venues and even the ticket companies, count on some speculation. Many teams even call their season tickets "investments"
Ticket brokering also provides many benefits to the venues, the local community and results in increased income tax revenue to both the federal government and the state.
MYTH #4: Ticket scalping is ILLEGAL.
Reality: Not exactly. Some states have anti-scalping laws, but they only refer to transactions taking place within the state. For example, if you live in New York and want to buy tickets for a New York event, if you drive into New Jersey, it is 100% legal to pay any price for tickets to a New York event. California, for example, only restricts ticket resales within a certain distance of the event location. So if someone from New York, wants to buy tickets to an event in Connecticut from someone in California, there is absolutely nothing illegal about that transaction.
The reason for many of these anti-scalping laws wasn't to "protect fans" per se, but instead to stop collusion. By restricting sales within a state, it becomes less profitable for someone working at a venue in New York to grab up tickets before they go on sale to the public and try to sell them out the back door. This does protect the fans, but more from the illegal collusion, than from "ticket brokers", since that same person can cross state lines and purchase them at any price.
MYTH #5: Ticket brokering is SHADY. (It's just one of many shady-yet-legal ways to make a few bucks on the internet. )
Reality: Since when is buying a product and then attempting to resell it for more money... shady?? Is this not the entire basis of a free market economy? Ticket brokering may have been shady at one time, since it was a back alley cash deal, but the internet has brought extreme transparency to it. Prices are now much lower, as local brokers are forced to compete with national brokers. Ticket limits ensure that no one broker buys up huge blocks of tickets. People, if they use a little common sense, aren't scammed by fraudulent tickets or falsely advertised ones.
Finally, if you haven't already figured out, the answer to your Buick Open question is that the transaction is perfectly legal, so long as the buyer and seller do not reside in Michigan.
Brandon, I hope in the future when you address an issue such as this, you do a little more research into what is really going on before making assumptions that turn out not to be true.
The main point is people out there are buying tickets with zero intention of going to a game, simply to resell. The more people you put between the fan and original ticket price, the more fluctuation it will see. Sure, a fan might benefit if someone scoops a bunch of tickets to a crap event, but any event worth while is inflated.
Even though in my article I state that the laws are "vague", I should also say that just because something, anything, has been made a law, it doesn't necessarily mean it serves the public in the best way. Laws are made for different reasons and with different interests.
In closing, let me also point out that I do mention positives in my article about these sites. But like with many capitalistic endeavors, many people get screwed too.
As far as the Buick Open, yes I did receive a response. Here it is:
Thank you for contacting StubHub.
We request that sellers list tickets in accordance with all applicable local, state, federal, and international laws, statutes, and regulations. However, because laws differ from place to place, we cannot offer information or legal advice regarding how the law applies to you. Please check your local laws regarding the legalities of selling and pricing tickets before listing tickets on StubHub. You can find information on these laws through your Attorney General's office.
Please feel free to contact us if you have any further questions or check out our Seller Learning Center if you'd like to learn more about selling tickets at StubHub.
Have a wonderful day Brandon.
This answer is exactly what they told me over the phone. Do you see what is ridiculous though? If I live in Michigan, I can't sell a ticket to my neighbor. But if I sell it to someone in Toledo, it's legal. Huh? Why? Let's try not to use legal terminology for this one. Instead, common sense.
People buy hundreds of thousands of things every day with no intention of using them, but simply to resell. What makes tickets special? Why does a sporting event or concert deserve special protections beyond all the other LUXURY items?
"But like with many capitalistic endeavors, many people get screwed too. "
Who is getting 'screwed'? You don't HAVE TO go to a sporting event, it is a choice. There are many options available for people who don't wish to pay over face, such as season tickets, mini-plans, etc. When you can prove to me that someone LITERALLY died because they didn't get to sit at the 50 yard line at a bears game, you may have a point, but until that day, attending events isn't a necessity of life. In fact, someone did LITERALLY die because they drank 2 gallons of water in an attempt to get their hands on a Nintendo WII, yet there isn't an outcry to try and regulate the video game industry.
The only way people get "screwed" is when they are FORCED to partake in the activity. One could say the gas companies are SCREWING consumers because gas is considered a necessity of our society. Drug companies are accused of screwing consumers because they charge high prices for life saving drugs. In these areas we can have a debate about who is getting screwed, but event tickets? You've got to be kidding me.
"This answer is exactly what they told me over the phone. Do you see what is ridiculous though? If I live in Michigan, I can't sell a ticket to my neighbor. But if I sell it to someone in Toledo, it's legal. Huh? Why? Let's try not to use legal terminology for this one. Instead, common sense. "
Okay, I will make this very simple for you. There are two types of laws... federal laws and state laws. Federal laws apply to the whole country. State laws only apply to the state in which they are enacted.
If two states have different speed limits (say California is 65 and Arizona is 75). You cannot get a ticket from California for driving 72 in Arizona. Simple, right? A state cannot make a law that reaches across its borders.
Anti-scalping laws are STATE LAWS. There are no FEDERAL anti-scalping laws. They are state laws, because, as I mentioned earlier, they were enacted to prevent collusion, not to protect consumers from the high cost of events. Since there is no FEDERAL anti-scalping laws, once you leave the jurisdiction, you are free to charge whatever you want for the property you lawfully purchashed, just like any 99% of the products in America.
This is why state anti-scalping laws should be ABOLISHED, since they serve no real purpose in the modern world. There are many ways for States to draw more benefits from the resale market, not limited to taxes, licenses, while enacting real protections for consumers such as fraud reporting, etc.
The facts are actually quite simple. The vast VAST majority of tickets go to the fans. The small % (5-->10) that the brokers wind up buying help in numerous ways, keeping average ticket costs down, giving access were none was before, etc.
A couple of examples to illustrate.
The Lakers take on the hottest team in the NBA, Dallas on Sunday March 11th. A total of 658 Tickets available... That is a whopping 3.2% of the tickets
Or later in the season, they take on Phoenix. A total of 938 Tickets for sale... A monsterous 4.6% of the total tickets. Those brokers really bought out the venue, didn't they?
The MOST tickets I could find available in my quick search was for the Sacramento game A total of 1410 tickets available, or 7% of the total tickets sold.
You need to be honest with your readers and yourself. The reason people can't get tickets as easily as they used to has very little to do with the less than 10% of tickets that brokers buy, but instead the speed at which transactions can be processed and that you simple can't fit 100,000 people into a 20,000 person arena.
In the end, this isn't a matter of whether I personally sleep well at night or not, but instead the facts vs the myths, such as you presented them.
Do you like the Pistons? When I checked our ticket price comparison search engine just now, a family of six could have purchased tickets for $14.30 each against the LAKERS! This is a hot game as the Lakers are always a big road draw. See for yourself: http://www.seatsmart.com/apps/WebObjects/SeatSmart.woa/wa/league?id=4
How about the Red Wings? They have a rivalry game against the Blackhawks in about two weeks. You could have paid Ticketmaster $49.75 for the worst seats in the upper deck, or you can get them from a “scalper” for $40.70. This is good for fans.
Tigers? This will be a great year to be at Comerica Park to celebrate the success of last year and make another run at it this year. There are plenty of tickets on the secondary market for opening weekend for $10 and under. But don’t try getting that from the Tigers themselves – their cheapest seats are $10 plus Ticketmaster fees of somewhere between $2 and $5 each. (not announced yet.) This too is good for consumers.
It is easy to focus on a ridiculously over-priced ticket and rave about it, but the reality is, having a lot of sellers helps consumers. Stubhub and sites like it have given fans access to great tickets and have helped lower the prices overall of tickets on the secondary market.
And hot games are not necessarily excluded. A LOT of people got into Yankee-Red Sox games last season for way BELOW face value. This is arguably the most heated rivalry in American sports history and people were safely getting in for half of the normal cost. Before Stubhub and the dozens of other sites that guarantee your tickets, I never would have bought tickets for half cost because that was always a sure sign you were about to get ripped off. But now, it’s not!
If we, as fans, tell ourselves, we are not savvy enough to get good prices on good tickets, it becomes a self-fulfilling prophecy. At SeatSmart, we try to empower consumers to understand their options and use their live entertainment budget wisely. One way to do that is for bloggers to help their readers find positive ways to use the secondary market. We hope you will get on board and we are happy to help if there is anything we can do.
This is not merely the opinion of me or our company...it is a fact that is supported by economic theory and data that we have seen in tracking the industry over the past five years.
went onsale and they only had 50.00 tickets left. So, yes, now if I want to
see them I'm going to have to pay a lot of money to see them. Does this suck.
Hell yeah it does. I can't prove where all the tickets went (to just general
consumers or to brokers or re-sellers). But, it still sucks. How is charging
someone 3500 bucks for a seat that was 225 to begin with fair or benefiting
the general public? It's not. It benefits that person who finds someone stupid
enough to buy the ticket. But bottom line is I can't afford a field seat. If
people weren't allowed to jack up the prices I could. So, please someone
tell me again how paying more for a ticket is benefiting me because I don't see it.
I am trying to get NFL tickets to watch the Lions play. The season hasn't even started, yet all the tickets are sold out. Check stubhub, anywhere between 10%-20% of the maximum capacity of the stadium is listed on the site with prices ranging from 2x as much to 20x as much. As mentioned, this includes tickets I was looking at trying to get over 3 months in advance. This is the same for every other game in the season. Most scalpers are season ticket holders and get first crack at getting season tickets the next year before the consumer does. See how it now becomes VERY hard to get a ticket by normal means?
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