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The Secondary Ticket Market | Consumer Beat
Many states are doing away with their antiscalping laws, prodded by powerful teams and corporations eager to get a piece of the multibillion-dollar ticket resale market.
Florida, Louisiana, and South Carolina have scrapped or relaxed many of their antiscalping regulations this year. Illinois did it last year. So did New York, which amended its resale law to allow markups of 45 percent above face value.
"The trend is clearly toward loosening the restrictions," said Gary Adler , a Washington, D.C., lawyer who has been advising the National Association of Ticket Brokers since 1994. "Probably fewer than 10 states have concrete absolute restrictions on ticket reselling now."
What's driving the shift is money. The size of the resale market is growing fast, particularly on the Internet, with industry estimates of annual sales starting at $4 billion and ranging as high as $10 billion. StubHub, eBay, Craigslist, RazorGator, Ticket Liquidator, and a host of smaller agencies and websites are reselling millions of tickets. Even Major League Baseball is in the business with Tickets.com.
With so much money at stake, professional sports teams and companies that once shunned the shadowy world of ticket scalping now want a piece of the action. Ticketmaster, a company that raked in $950 million in fees last year selling tickets to concerts, stage shows, and sporting events, is trying to make millions more reselling those same tickets.
Ticketmaster resold 329,000 tickets last year, well below the 3 million resold by StubHub. But Ticketmaster's resales were four times as high as the year before, and the company is leading the charge in Massachusetts and other states against antiscalping laws that prevent ticket holders from reselling their tickets for whatever they want.
"We think these laws are outmoded," said Sean Moriarty , Ticketmaster's president. "The idea that you can legislate ticket prices has been proven out over the course of decades to not work. The better way to go is to open it up, make it more transparent."
Yet the whole notion of legalized ticket scalping is offensive to many fans. Jim Morrissey , who recently moved from the Boston area to San Francisco, said he understands demand for tickets often outstrips supply. But he says that's no excuse for giving in to greed.
"The teams are taking the easy way out," he said. "It's going to drive the price of tickets way up."
But teams, concert venues, and ticket sellers are telling lawmakers across the nation that scalping cannot be stopped and instead should be embraced and regulated in a way that protects consumers. Some companies say an open market would bring down prices.
Representative John K. Stargel , a Florida Republican who filed legislation eliminating his state's $1 cap on ticket resale prices, said the old law wasn't deterring scalpers and couldn't touch ticket-selling websites operating outside the state.
Billy Wayne Montgomery , a Republican representative from Louisiana, said the bill he crafted with the help of Ticketmaster kept the state's existing antiscalping laws in place but allowed ticket holders to resell their tickets above face value as long as the event organizer gives its approval and the transaction takes place on a website offering full refunds if the event is canceled.
The change in law allowed the 5-1 Saints to launch a ticket exchange this season run by Ticketmaster where season ticket holders can legally scalp their tickets online. Buyers are charged a fee equal to 10 percent of the transaction, while sellers are charged 15 percent.
Michael Stanfield , vice president of ticket sales for the Saints, said the exchange eliminates the possibility of fraud by cancel ing the bar code of the ticket being sold and e-mailing a new bar code to the buyer.
John Walker , senior vice president for the Phoenix Suns, said the team had moral and business qualms about entering the resale business, but decided it was better to be involved than remain sitting on the sidelines. Last season, more than 15,000 Suns tickets were sold on the team's website, at an average markup of 71 percent.
The New York Yankees recently revoked the season tickets of several fans caught reselling their seats on StubHub and other websites, even as the team is developing Pinstripe Marketplace, a website where season ticket holders will legally be able to resell their tickets for up to 45 percent above face value, with the Yankees taking a cut. Yankee officials did not return phone calls.
Legislation Ticketmaster is pushing here in Massachusetts and other states with restrictive scalping laws would limit ticket resales only to websites authorized by the team or event organizer.
Competitors say Ticketmaster's language would give the ticket giant a significant competitive advantage, since it has strong ties to most of the nation's concert and sports venues.
"They're trying to create a monopoly," said Jim Holzman , the president of Ace Ticket of Boston.
Jeff Fluhr , the chief executive of San Francisco-based StubHub, was in Boston last week urging state lawmakers to get rid of the state's antiscalping law and reject Ticketmaster's approach. He cited research indicating prices on StubHub fell dramatically in Illinois the year after resale restrictions were eliminated.
Greg Bettinelli , director of event tickets for eBay, said Ticketmaster's deals with teams are too restrictive. He said fees tend to be high and season ticket holders often can't sell their tickets below face value, effectively placing a floor on prices. Some teams don't pay season ticket holders in cash, but instead give them credits toward future season ticket purchases.
The Boston Red Sox, the Boston Celtics, the Boston Bruins, and the New England Patriots are all well aware of the changes taking place in the ticket market around the country, but they aren't pushing for similar changes here.
Rich Gotham , the chief operating officer of the Celtics, said the club hasn't come down on one side or the other, but he acknowledges the team would prefer to handle all ticket transactions with its customers.
The Red Sox, the Celtics, and the Patriots all let their season ticket holders resell their tickets on team websites, and the Bruins and the TD Banknorth Garden are moving in that direction. But because of the state law limiting markups to $2 plus some service charges, resale transactions are relatively rare. The Patriots last week had only one ticket posted for resale on their website. The Red Sox handled 30,000 resales this past season.
Bruce Mohl can be reached at mohl@globe.com. 
© Copyright 2007 Globe Newspaper Company.
