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Ticket scalping continues to frustrate promoters

A federal court in Australia ruled on Monday that eBay can negotiate the sale of tickets for concerts and other events at a value above face. The ruling is another blow to event promoters around the world who are fighting ticket resale, even as legislation and court decisions are increasingly rolling back strict sanctions for resellers.

The concert promoter involved in the action, Creative Festival Entertainment, is the promoter behind Australia’s Big Day Out concert series. In an attempt to thwart resellers, Creative marked each ticket with a cancellation policy that if the ticket is resold above face value, the ticket will not be accepted at the event. To justify the arrangement, Big Day Out producer Ken West said the runners were making “big profits” at the expense of true fans.

EBay Inc. filed a lawsuit to prevent the provision from being enforced. The ruling was not so much in favor of scalping as it prohibited Creative from arbitrarily canceling tickets, although West says it amounts to the same.

Scalping has always been a challenge for concert promoters and bands to get their tickets into the hands of fans at face value, and not at a markup. And yet it has traditionally been a losing battle even in the face of some creative outlets to thwart resellers.

On one stage, the bands began offering pre-sale tickets only to fan club members. But as U2 found out when they launched their Vertigo Tour, the resellers simply paid the $ 40 membership fee and bought the tickets anyway. Ditto for the Rolling Stones Onstage Tour, which required fan club members to pay a hefty $ 100 premium for tickets. Ticket brokers paid the premium and passed the cost on to buyers.

The internet has not helped things much because it has allowed any individual to become a broker with just one click. No longer do you need to queue outside Tower Records or wait on the phone for a Ticketmaster operator. Now, not just businesses, but individuals can buy tickets at face value and post them later that day on eBay or other auction sites.

While it is easy to condemn resellers, in the United States, for example, ticket brokering is not illegal in every state. And in states where scalp is illegal, including Florida, Massachusetts, and Illinois, the statues are pretty loose. And even then, in the case of online resellers like eBay, those laws are only enforceable if the buyer and seller reside in the same state.

Ticketmaster, one of the largest hosts for ticket sales, has made the switch to the auction sale itself, which, ironically, has allowed Ticketmaster to operate as a reseller. Ticketmaster advocates the practice in exactly the same way that eBay does. Simply put, selling tickets at auction allows the seller to get the market value of the tickets. Ticketmaster allows the demand to set the price.

In fact, the only real difference is that Ticketmaster pays a fair share to promoters and artists, while eBay and other brokers do not. But the bottom line is that the best concert seats cost 25 percent or more above face value at auction.

As Creative Festival Entertainment discovered, there is no viable solution for ticket reselling. Even companies that have anti-scalping policies in place have little recourse beyond obtaining a court order against the broker to stop reselling the tickets. Critics who say consumer laws don’t go far enough to discourage resellers now have another reason to be discouraged.