What's Happening?
A new white paper from the Vanderbilt Policy Accelerator (VPA) indicates that corporate resellers and online ticketing platforms are inflating the cost of live music and sports events by $11 billion annually.
This issue, highlighted by events like Taylor Swift’s Eras Tour and the FIFA World Cup, involves tickets being bought in bulk by professional resellers and then sold at significantly marked-up prices on secondary platforms such as Ticketmaster, StubHub, and SeatGeek. The report details that online ticket platform fees contribute $13.6 billion, with $6.8 billion of that being excess, and resellers add an additional $4.5 billion in excess fees. The VPA's Director of Competition and Regulatory Policy, Brian Shearer, states that platforms initially designed for individuals to resell unwanted tickets have evolved into operations that encourage corporate middlemen to monopolize ticket sales for profit.
Why It's Important?
This inflation in ticket prices significantly impacts American families and consumers by making live entertainment less affordable and accessible. The practice, driven by large corporate enterprises with ties to Wall Street, transforms what was once a casual resale market into a professional industry focused on arbitrage. The report suggests that the current system allows for substantial price-gouging, with a significant portion of ticket costs being unnecessary. This affects not only major cultural events but also numerous concerts and games, limiting public access to these experiences. The involvement of major ticketing platforms in both primary and secondary markets, coupled with high service fees, exacerbates the problem, creating a less equitable market for consumers.
What's Next?
The VPA report proposes policy solutions, including capping the price of resold tickets at face value and limiting online ticket platform fees to 10%. This approach has gained traction globally, with countries like Ireland, France, and Japan already implementing similar bans on resale above face value and fee caps. In the U.S., Rhode Island has adopted these policies, and states such as Vermont, Maine, and Washington, D.C., have taken comparable actions. The music industry, including prominent artists and venue representatives, supports these measures. The report also provides sample legislative language for policymakers and suggests that state Attorneys General and the Federal Trade Commission could use existing legal frameworks to address these practices without new legislation, indicating potential for increased regulatory scrutiny and enforcement.
Beyond the Headlines
The issue of ticket resale inflation extends beyond mere economic impact, touching upon ethical and cultural dimensions of access to entertainment. The transformation of ticket reselling from an individual necessity to a corporate profit-driven enterprise raises questions about market fairness and consumer protection. The alleged involvement of hedge funds, such as the one reportedly owned by the CEO of StubHub, in buying and selling large volumes of tickets on their own platforms, highlights potential conflicts of interest and anti-competitive practices. This situation underscores a broader debate about the role of technology platforms in facilitating market manipulation and the need for robust regulatory frameworks to ensure equitable access to cultural events, which are often seen as integral to societal well-being and community engagement.
