Jun 1, 2007

Taking a scalping

The word out yesterday is that the Empire State will soon take the actions necessary to toss what are commonly known as its "scalping laws" from the books. The result will be that it is no longer illegal to markup and re-sell an admission ticket to a sporting or concert event at whatever price the original purchaser so desires. Previously, one could only re-sell it at a minimal add-on; now the sky is the limit. You just can't physically make the transaction within X feet of the venue.

While I can understand the "let the market run its course" logic on this, let me present a scenario that might give second thought to such an approach. The following is based on a real world situation that recently occured:

- A popular artist was booked to perform at a venue.
- Ticket sales were announced, beginning at a certain time on a certain date: for this example, let's say it was 10AM on June 15.
- At 10:01AM, the show was Sold Out

Within a day, tickets for this show were appearing on Craigslist and various other online sites at prices that were 3x-10x the face value. At the time, such action was illegal; in the near future, it will be legit. All is cool; this is just the average Joe making a quick buck for himself, right?

Well, not quite. Here is the dirty inside scoop of what actually transpired here:

Prior to that 10AM ticketing start time; the promoter of this show personally bought one-half of the tickets. How? He told the ticketing agency that the actual start time was 8AM; the locally advertised 10AM was a ruse. They were bought 'at the box office', thereby avoiding those dreaded and costly convenience fees.

So, guess who the Craigslist seller of those marked up tickets was? Yep, our promoter friend. A huge sum of money went directly into his pocket.

The band gets screwed here, because their performance fee is based on the advertised ticket price, and their initial price point. They got no portion of the markup. Of copurse, the public is screwed as well.

The ticketing companies love it, and they want to play in this sandbox too. They are already kicking into high gear by setting up their own aftermarket ticket exchanges. One has to ask whether or not any of these markup'd tix were actually "bought" by the ticketing companies themselves? Wouldn't it be nice to find out? Someone get me Mr. Cuomo's phone number.

File this one under Unintended Consequences.


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