Congressional Hearing on Ticketing to Cover Transferability, Speculative Tickets

US Capitol Building
Yasin Ozturk/Anadolu Agency via Getty Images

A general view of The US Capitol Building on Jan. 21, 2020 Washington, D.C.

Expect plenty of finger-pointing Wednesday when a half-dozen ticketing executives go before a powerful congressional subcommittee to discuss long-standing consumer complaints about the live event ticketing business.

Executives including Amy Howe, president and chief operating officer at Ticketmaster, AXS chief executive Bryan Perez and Stubhub vp and general counsel Stephanie Burns will be joined for by executives from Vivid Seats, TicketNetwork and to discuss how increased competition and the blurring of lines between primary and secondary tickets led to unpopular practices like speculative tickets and hidden fees.

Titled “In the Dark: Lack of Transparency in the Live Event Ticketing Industry,” the hearing before the House Energy and Commerce subcommittee on Oversight and Investigations comes amid renewed interest in passing a decade-old bill that would dramatically rewrite the rules of the ticket business.

If passed, representative (D-NJ) Bill Pascrell’s BOSS Act would enshrine ticket scalping as a legal right for fans and brokers, while also restricting practices like speculative ticketing and requiring increased transparency by both primary and secondary sellers.

But the most contentious portion of Wednesday's hearing will undoubtably focus on ticket transferability and technology from companies like Live Nation and AXS that can make tickets nearly impossible to resell.

Restricting transferability can “can limit ticketholders’ ability to sell tickets they can no longer use due to unforeseen circumstances and frustrate consumers wishing to buy tickets as gifts for others,” reads a six-page memo from the House committee’s staff released Friday, citing a Black Keys show last year where “hundreds of fans were turned away from a Black Keys concert at the Wiltern because they unknowingly purchased tickets on the secondary market that were nontransferable.”

But not everyone is in agreement, including Ticketmaster’s Howe, who is expected to argue that “transferability restrictions allow consumers to access tickets at a face-value price” set by the artist for their fans, the report explains.

The issue highlights a larger debate about how much control Ticketmaster should have over tickets once they are sold to fans. As the most dominant ticketing company in the United States with the biggest market share, Ticketmaster already maintains a powerful position in the supply chain and companies like Stubhub and Vivid Seats say that allowing the company to decide which shows can and cannot be resold gives the company a complete monopoly on tickets.

Officials at Ticketmaster argue that its the artists who dictate the rules on transferability and say tools like Safetix are only utilized by a small percentage of acts that want to make low priced tickets available to fans.

The hearing will also cover disclosure issues within the primary and secondary ticket business -- sites like Stubhub tell fans very little about who is selling their seat or which tickets are controlled by broker groups taking out huge positions on tickets as a way to set prices. On the flipside, many brokers and resellers often complain that Ticketmaster doesn’t adequately disclose how many tickets it puts on sale at any given time and how many it holds for presales and fan clubs.

“We launched our bipartisan investigation because of concerns about potentially unfair and deceptive practices occurring in the primary and secondary ticket marketplace. Unfortunately, the investigation has thus far validated our concerns,” Committee chairman Frank Pallone, Jr. (D-NJ) and subcommittee chair Diana DeGette (D-CO) said in a joint statement. “Consumers face a number of disturbing practices in the industry, including a systemic lack of transparency and fairness. This hearing will give us the opportunity to hear directly from companies about troubling practices in the live event ticketing marketplace and push them to put consumers first going forward.”

The hearing starts Wednesday at 7 a.m. EST and can be watched via livestream here.