Sen. Schumer's ticket resale delay bill begs questions and has brokers outraged

New York Sen. Charles Schumer's proposed legislation to impose a two-day waiting period on brokers before they can buy and resell tickets has understandably caused an uproar among ticket brokers.

Schumer's proposal, which also calls for brokers to register with the Federal Trade Commission, is still in its infancy, but what the broker community is saying is that the plan penalizes them while not fully addressing some legitimate concerns over transparency and the need to create a more even playing field for selling tickets.

"It's sad to see that because Ticketmaster and TicketsNow mishandled an on sale [Springsteen shows], the entire industry has come under fire. We have somehow become the problem when just six months ago we were their partners. Ticketmaster has decided to blame the brokers as a way to achieve their merger, and eliminate competition while they do it," said broker Mark Kuta, owner of Naperville, IL-based Ticket America.

Schumer had been a vocal critic of the planned merger between Ticketmaster and Live Nation, but he worked with Ticketmaster on his proposed legislation to the exclusion of brokers. Ticketmaster Entertainment CEO Irving Azoff supports the proposal and has blasted the secondary ticket market in recent weeks, even suggesting that he would consider selling the company's TicketsNow ticket resale subsidiary.

But, Azoff has not said what Ticketmaster might do with its TicketExchange resale site. "Staggering the resale process to commence 48 hours after an onsale is a very important step in reforming the process and bringing transparency to the onsale process," he said in a statement.

“Buying concert tickets has become like taking a trip back to the Wild West – anything goes,” Schumer said in a statement this week. “When the scalping market destroys initial ticket sales and all tickets sold at face value are hoarded by resellers before New Yorkers have a chance to buy them, any attempt to keep prices down by the sellers and artists is made impossible. The bottom line is we need to create a fair system where fans get first crack at good seats at a reasonable price.”

"We look forward to reviewing the proposed legislation and working with Senator Schumer and other legislators on fan friendly legislation," Sean Pate, spokesperson for StubHub, told TicketNews. "StubHub and eBay focus on the fans first by providing fair and equitable access to event tickets, which is the very platform StubHub was founded upon."

Pate added that he hopes Ticketmaster's support of Schumer's proposal will extend beyond the secondary market and also shine a light squarely on the primary ticket market. Brokers and others have long cried foul for the way Ticketmaster has hidden behind promoters and artists and not disclosed how many tickets are initially made available when tickets go on sale. Promoters and artists generally set those limits, but they routinely shy away from disclosing the exact amounts.

As it currently stands, Schumer's proposed legislation does not address that issue, instead proposing to add rules prohibiting "prelisting," or speculative listing, of tickets by brokers before they are available.

“Fans want full transparency about how tickets are sold and distributed, and StubHub supports efforts to provide greater transparency. We hope Ticketmaster's public support for this bill will include a commitment to promote transparency in the initial sale of tickets," Pate said. "That would include providing information about how many tickets are being made available to the general public and where other tickets are being distributed."

Gary Adler, legal counsel for the National Association of Ticket Brokers (NATB), said Sen. Schumer's proposal "appears to give Ticketmaster a two-day monopoly" on ticket sales, and it will hurt consumers in the long run. Adler and NATB President Tom Patania, a broker and owner of Select a Ticket, also hope to work with Schumer and his staff on the issue.

"There are lots of places that sell subscriptions, which are contracts for tickets. Why can't brokers sell those tickets? Why can't consumers buy those tickets in advance?" Adler asked. "Registration is not necessarily a bad thing, but the NATB has had an excellent consumer protection policy in place for some time that works well. Our brokers sell experiences, and if they don't make sure that those experiences are good ones for consumers, they won't be in business very long."

Kuta believes that limiting brokers from buying tickets from the primary market for a couple of days "would have and extremely negative effect" and possibly put brokers out of business.

"If brokers can't purchase tickets from the primary market, whether it be from Ticketmaster or from individuals sellers, then Ticketmaster would be able to sell the tickets that they hold back on their TicketExchange and ask whatever price they want for them, in a sense eliminating competition," Kuta said.

Part of what the Schumer proposal does not appear to take into account, Kuta added, is that brokers are like any other retailer that facilitates transactions in the marketplace. It's not as if there's a federal law forcing Walmart to wait until two days after Target begins selling a particular product.

"We purchase tickets from individuals and resell them to other individuals. This is simply supply and demand," Kuta said. "Take a look at the upcoming Bruce Springsteen show at the Los Angles Sports Arena. Most of the tickets are going for half of the face value if you search the Internet. Is Ticketmaster willing to end all of its ticket auctions and platinum and premier seating options that they have doing for quite some time? There have been many shows in the past where most of the good seats have been held back and placed on the Ticketmaster TicketExchange for higher prices. Why is it that the public never knows how many tickets are for sale for each show? Of course the demand for tickets will go up if only half or two-thirds of the tickets are released for a show."

(The image accompanying this story is from New York Newsday)