The Month In Ticketing: Brokering Discussion

Craig F. Walker / The Denver Post / Getty Images –
Ticket Masters: The secondary ticketing business in North America saw numerous developments in September. In this 2014 photo a ticket broker solicits business outside of a Colorado Rockies baseball game in Denver.

Author’s Note: This article was published in the 10/15 edition of Pollstar. Since it was printed, Ticketmaster President Jared Smith has responded to Senators Jerry Moran and Richard Blumenthal on behalf of Live Nation CEO Michael Rapino.

September was a month of shakeups within the ticketing business. New York Attorney General Barbara D. Underwood filed suit against Don Vaccaro’s TicketNetwork and Ticket Galaxy for speculative ticketing and AXS announced that it will formally be entering the secondary ticketing market, effectively ending its partnerships with StubHub. The Wall Street Journal also reported that private equity firms TPG and Rockbridge Growth Equity were considering selling their stakes in AXS. But those stories didn’t match the impact of Ticketmaster being targeted with a series of reports from the CBC and Toronto Star, which led to two U.S. Senators writing a letter to Michael Rapino.

The series of investigative reports from the CBC and the Star dug deeply into the company’s relationship with professional ticket resellers. A key element of the reports was video of a Ticketmaster employee from the Ticket Summit in Las Vegas essentially telling undercover reporters the resale division would not enforce terms and conditions from the primary side.

Some brokers had “a couple of hundred Ticketmaster accounts,” and “I think our biggest broker right now has probably grabbed around five million [tickets],” a TM rep told the reporters. The reports also pointed out the existence of TM’s TradeDesk platform, which is available for use by brokers after approval and registration.

“It is categorically untrue that Ticketmaster has any program in place to enable resellers to acquire large volumes of tickets at the expense of consumers,” Ticketmaster representatives told Pollstar in a statement soon after the reports were published. “Ticketmaster’s Seller Code of Conduct specifically prohibits resellers from purchasing tickets that exceed the posted ticket limit for an event. In addition, our policy also prohibits the creation of fictitious user accounts for the purpose of circumventing ticket limit detection in order to amass tickets intended for resale.”

“We do not condone the statements made by the employee as the conduct described clearly violates our terms of service.”

Still, the reports prompted Sen. Jerry Moran of Kansas, the sponsor of the BOTS Act of 2016, and Sen. Richard Blumenthal of Connecticut, a co-sponsor of that bill, to ask numerous questions of Live Nation CEO Michael Rapino, requesting a response by Oct. 5.

The senators expressed concerns around accusations that TM “recruits and employs professional ticket scalpers to circumvent the ticket purchasing limits on its own primary ticket sales platform in an effort to expand its ticket resale division,” and “provides a web-based inventory for scalpers to effectively purchase large quantities of tickets from Ticketmaster’s primary ticket sales website and resell these tickets for higher prices on its own resale platform.” They requested specific information regarding TM’s purchasing limits, how it detects bots, how purchasing limits affect TradeDesk, how TradeDesk is regulated, and how the company’s Professional Reseller Handbook plays into deterring illegal activity.

Ticketmaster announced Oct. 4 its intention to participate in a Federal Trade Commission workshop on online ticketing in March 2019 to educate consumers and lawmakers on various aspects of the ticketing industry.

TM has publicly been in the resale business since it bought TicketsNow in 2008, and sources told Pollstar that since then the company has had a resale division that deals with brokers.

Patrick Ryan (whose company, Eventellect, manages ticket inventory on Ticketmaster Resale, StubHub, SeatGeek, and all the leading ticket platforms) said the articles and senators’ questions bespeak an incomplete understanding of all that TM does in the current ecosystem to control bad actors.

“Ticketmaster has always held its suppliers’ [standards] above all others,” he told Pollstar. “You had to have the ticket in hand. Not just by and large – always – they made sure the inventory was valid, they made sure it was in the person’s possession. They went to great lengths to prevent bad broker behavior.”

For better or worse, brokers are still a big part of the ticketing ecosystem, Ryan said, and the positive steps the industry has taken in the last 10 years often get overshadowed when large segments of the public feel like tickets are too expensive or unavailable.

Brett Goldberg, co-CEO and co-founder of TickPick, told Pollstar it’s tough for marketplaces to set rules about who can or cannot resell tickets.

“If someone gets more than eight tickets in a legal way, is that violating the limit? It would be extremely challenging for [the marketplace] to police that. Say there are five friends who have season tickets, and one of them is pretty good at buying tickets and selling them. Those guys and gals pool [phone numbers and credit cards] and create a brokerage. They share their TM resale platform and have five accounts. Are they breaking the rules?

“Sometimes, you have aggregated companies that represent tons of people. [Someone] could go to a broker and say, ‘I have season tickets. I want to go to these games, but you can manage the rest of them. Here is access to my account, sell these for me.’ Should that be legal or wrong, for brokers to help season ticket holders sell their tickets?”

These cases and the fact that some states have laws protecting the consumer’s rights to resell tickets, all seem to indicate that operating in the primary and secondary markets gives companies access to more fees and revenue, but also puts them in an awkward position. They want good relationships with the rights holders and the brokers, who each have choices of different marketplaces.

“There are some ticket-resellers who don’t post on Vivid, StubHub, SeatGeek, etc. Some only post on Ticketmaster, Stubhub, or SeatGeek,” Ryan said. “The number of professional resellers is very large and they all have their own philosophies about where and how much they sell their tickets for. So [TM] needs to have relationships with these brokers.” Ryan said sports ticket resale can be up to 75 percent of all resale activity in some cities and that less than 10 percent of pro sports teams don’t have a true resale strategy.

Goldberg and Ryan agreed that Ticketmaster needs the trust of brokers so that they will list inventory on their sites, but Goldberg cited cases of some teams pulling tickets from season ticket holders who had not gone to any games. Because TM has an official relationship with the NFL, the idea that teams could demand information from the company and begin canceling tickets might scare away brokers, but Ryan said most brokers using unethical practices like bots or speculative tickets avoid official marketplaces anyway.

Ryan reinforced a position he has previously put forth in Pollstar, that TM consistently doesn’t get credit for the good it does, citing the Verified Fan system, the recent Twenty One Pilots onsale, and the Waiting Room experience for Garth Brooks’ Notre Dame show as great successes.

“[This situation] is just very unfair criticism of Ticketmaster,” Ryan said. “Getting into a building has never been simpler. AXS has great mobile ticketing, as do Ticketmaster and StubHub. It’s really nice to be able to decide at the last minute if I want to go to a game, I don’t need access to a printer and I can purchase for friends. These innovations cost AXS and Ticketmaster millions of dollars and it’s driving incremental revenue for teams and promoters. Yet it doesn’t seem like we want to talk about all of the good things happening.

“The Ticketmaster resale team has some of the finest people in the space. I am personally offended by the wide paintbrush being used to color these people as bad people. They are good business people and their treatment by some after this news story is unfair.”