With the resounding election Tuesday of Barack Obama as President of the United States, voters put fixing the economy at the forefront of the nation’s priorities. This is particularly true of small businesses, the backbone of the economy, which became a political flashpoint during the campaign as both President-elect Obama and Senator John McCain claimed to have a remedy for how to improve the fortunes of small businesses.
Ticket brokers are quintessential small businessmen, so TicketNews asked some industry insiders how they viewed their future under an Obama administration, and what they thought of the overall economic condition of the ticket industry.
Arizona State University economics professor Dr. Stephen Happel, the ticket industry’s leading academic authority, believes that the Obama election, coupled with the Democrats gaining a tighter grip on the controls of the House of Representatives and the Senate, could have some potentially negative effects on the industry.
“I must admit I am quite worried about what Obama and Congress might do to the economic landscape. I think tax increases are on the way that will negatively affect small business owners like ticket brokers,” Happel said. “One wonders if Ticketmaster will now mount a lobbying campaign to consolidate the industry in the name of greater fairness for consumers and find a receptive Congress and White House.”
Curtis Broome, president of EventMobile.net believes strong businesses can thrive under Obama.
“I’m very optimistic about the future under Obama. Let me first disclose that I have an MBA from Carnegie Mellon, and that I was one of the top students in my class in economics in particular. That said, I’ve always believed innovation and economic value create strong businesses capable of thriving over the long term,” Broome said. “Businesses will likely see an increase in taxes under Obama, however if any given business is creating economic value that is sustainable, then an uptick in taxes will not drive that business into bankruptcy.”
“I’m not really sure that the election of either Obama or McCain would really have any impact on my business other than having to pay more personal income taxes with Obama,” said one East Coast ticket broker. “Unfortunately, I think the real story of the next year or two in this industry will be the squeezing of margins caused by the primary sellers raising box office prices (ticket face values) to try and grab a bigger slice of the pie; the aggregators (TicketsNow, TicketNetwork, StubHub, etc.) beating each other over the head to try and retain market share while passing additional costs onto the brokers; and finally the anemic state of the economy, which is impacting every broker in the country.”
Happel fears that with Democrats in control there’s a chance they might “really screw things up in the economy and produce a long recession,” which negatively impact attendance for major entertainment events.
“The ticket brokering industry will be squeezed in the process. Also bailouts for corporate America by the federal government will likely lead to restrictions on spending for entertainment and so have negative impacts,” Happel said. “I voted for McCain not because I am wild about him but because I prefer Mexican standoffs between the White House and Congress. If Congress was Republican dominated, I probably would have voted for Obama for the same reason. My major hope is that Obama is like Clinton and becomes much more pragmatic and less idealistically liberal once he takes office.”
During the campaign, President-Elect Obama presented various economic proposals for the nation and small businesses, such as eliminating capital gains taxes for start-ups and small businesses; increasing investments in research and technology; helping small businesses better afford health care for its employees; and moving toward creating millions of “green” jobs.
Ultimately, said the East Coast broker, neither Obama nor McCain would had much true impact on the ticket industry. “All in all, 2009 is going to be a difficult year for many brokers, forcing companies to either merge to save costs or to unfortunately go out of business. The smart will survive, those who are not will either earn much less or shrivel away. While we were all thrilled to take orders from the big guys over the past few years, the time has come to pay the piper as we have pretty much lost control of our customers and are forced to take more speculative risks buying inventory in order to compensate.”
(The image accompanying this story is from The Huffington Post)