Scalper Lobbying Group Fires Shot at Ticketmaster in Wake of FTC Workshop Announcement

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Angry about programs like Verified Fans, the National Association of Ticket Brokers claims all problems stem from "initial ticket supply."

A lobbying group for ticket scalpers has launched a broadside against Ticketmaster, seizing on an announcement that the Federal Trade Commission is holding a workshop on ticketing to eviscerate the primary ticketing giant on a host of grievances over programs like Verified Fan.   

News that the Federal Trade Commission is holding a workshop on online ticketing next year in Washington set off a storm for the ticketing company earlier Thursday (Oct. 4), leading to a 3.9 percent drop in parent company Live Nation's stock price and a terse statement from Ticketmaster that the event was not a formal FTC investigation or probe, but "an industry wide workshop."      

The workshop announcement comes as Ticketmaster is still dealing with the aftermath of an investigative report by the Toronto Star and CBC looking at the company's secondary business. So far, Ticketmaster faces two class action lawsuits from the series and a bipartisan Senate inquiry following a secret video filmed at a Las Vegas secondary ticket conference.       

The event, Ticket Summit, competes with the World Ticket Conference, held 10 days later at a hotel across the street from TicketSummit in Las Vegas. The World Ticket Conference is organized by the National Association of Ticket Brokers and led by lawyer Gary Adler, who represents several hundred independent ticket brokers that resell sports, music and theater tickets both online and in retail locations. Last year, one of NATB's members Jason Nissen was accused of operating a Ponzi scheme by the U.S. Attorney's Office with the Southern District of New York and charged with multiple counts of fraud. His arrest followed the arrest of Joseph Meli, who pleaded guilty to one count of fraud in connection with a scheme to sell concert tickets on the secondary market.

Ticket resale was once a major money generator for a professional class of ticket resellers, but many independent brokers now are exiting the business as they face increased competition from large consolidated ticket resellers like DTI (which co-owns the competing Ticket Summit) and from primary ticket sellers like Ticketmaster who have released tools like Verified Fans to combat professional ticket resale.   

Calling the workshop "welcome news," Adler's statement attempted to connect Ticketmaster's recent PR headaches -- including a New York Times story that accused the company of violating a Department of Justice consent decree -- with a laundry list of complaints it says hurts consumers, but has also restricted scalpers' ability to make money flipping tickets. Adler said consumer complaints about tickets selling out seconds after being listed for sale, only to be listed on resale sites at high markups, was solely Ticketmaster's fault.

"The frustrations that consumers face today in accessing the tickets they want and at a price they consider reasonable," Adler wrote, is "almost entirely from practices related to the initial ticket supply and how it is tightly controlled at every turn," adding that the ticket market has been "overwhelmingly monopolized by the Live Nation/Ticketmaster giant." 

Adler has been a vocal critic of Ticketmaster's Verified Fan program, which makes it difficult for scalpers to buy up tickets in bulk for resale. He's also been highly critical of Taylor Swift's Reputation Tour, calling it a "total disaster" in a Feb. 8 post on his blog criticizing how the "Blank Space" singer priced her tickets for the stadium run.

"In stumbling hard to grab the entire pie," Adler wrote, "initial sales and all resale of tickets" show "the Reputation Tour was doomed from the start." 

Unfortunately for Adler, he got it wrong: The Reputation Tour is now the highest-grossing U.S. tour by a woman, excluding residencies, according to Billboard Boxscore. Pulling in more than $200 million from 27 concerts reported to Billboard in August, the tour is on track to be one of the highest-grossing tours of 2017, with the total gross expected to grow significantly following the close of the Reputation Tour this weekend in Dallas.

"It’s somewhat surprising that the NATB is accusing Ticketmaster of bad behavior considering the lengths Ticketmaster has gone to create liquidity and validity in the resale ticket markets, making it easier for their members to sell their ticket inventory, " said Patrick Ryan with Eventellect, a ticket distribution company that has large-scale resale deals with teams like the Los Angeles Dodgers and competes against NATB members.

"Tickets remain headline news when there are immediate sellouts and fans have a hard time finding tickets at face value after the public on sale," Ryan said. "But there isn’t proportionate headlines when tickets sell for below face value or when teams and/or promoters run special discounts. Hopefully the focus at the workshop isn’t just on the highest demand of events."

Adler's full statement on the FTC workshop and Ticketmaster is below:

For anyone who enjoys live events and purchases tickets, or who works in the ticketing business and competes with the giant Ticketmaster, it is welcome news today that the Federal Trade Commission will convene a workshop to examine the anticompetitive practices that NATB has been warning about for a long time. The DOJ is already reportedly investigating Ticketmaster against complaints that it may be violating the consent agreement it entered into when it merged with Live Nation, and now the FTC has announced it will look into practices that limit ticket availability on the primary market and mislead consumers about ticket prices and availability. The FTC specifically announced that it will explore ways to address deception beyond traditional law enforcement, and this is terrific because hopefully for the sake of consumers and a competitive ticket market, much needed change will result from this process. The frustrations that consumers face today in accessing the tickets they want and at a price they consider reasonable or at market value stem almost entirely from practices related to the initial ticket supply and how it is tightly controlled at every turn. This primary market for tickets, from sports to music, is overwhelmingly monopolized by the Live Nation/Ticketmaster giant. The lack of vibrant competition in the market combined with Live Nation/Ticketmaster’s hands on so many levers to restrict ticket sales and resale is why tickets are more difficult to access and more expensive to purchase, a situation that harms consumers and needs fixing. We look forward to participating in this FTC workshop.

— Gary Adler, Executive Director and Counsel, National Association of Ticket Brokers