Proposed ticketing legislation in Tennessee violates rights of fans and the free market Proposed ticketing legislation in Tennessee violates rights of fans and the free market
Legislation will be introduced in the Tennessee state house this week that, if passed, would drastically violate the privacy of fans and ticket brokers,... Proposed ticketing legislation in Tennessee violates rights of fans and the free market

Legislation will be introduced in the Tennessee state house this week that, if passed, would drastically violate the privacy of fans and ticket brokers, infringe upon the ownership rights of fans, and expand and perfect Ticketmaster’s monopoly of the ticketing industry. The bill, titled the “Fairness in Ticketing Act of 2012”, would impose draconian measures upon the ticketing industry, limiting the ability of consumers to find tickets at a fair market value.

Portions of the bill violate consumer privacy, as it requires ticket resellers to provide more information about the ticket’s origins. According to WSMV-TV in Nashville, the “bill would require… notice of who currently owns the ticket.” This requirement would violate the privacy of fans and put artists, who often benefit from reselling tickets, in a legally grey area.

For her most recent tour, pop star Katy Perry included a rider in her contract, which was made public by the Smoking Gun, that required venues to set aside tickets for her to sell to the public through any “so-called ‘secondary market’ seller of tickets”. Under the proposed law, these particular tickets would have no specific owner, unless it were Perry’s production company or Perry herself. The bill does not specify whether or not the owner of a ticket may be a corporation rather than an individual, yet many artists, promoters, and other agencies regularly purchase tickets with the intent of reselling them in the secondary market.

The proposed legislation also gives venues unprecedented power to determine which ticket brokers can resell their tickets, limiting competition to those brokers supported by the primary market.

The bill also empowers venues to utilize “any ticketing methods for the initial sale of tickets, through any medium, whether existing now or in the future.” Under the proposed law, venues would choose the method of sale, whether it is the current paperless technology or some future method. Consumer advocates believe, according to the Boston Herald, that “paperless tickets infringe on the consumer’s right to sell their tickets for fair market value, or give tickets to sporting events and concerts as a gift.” Future technologies might limit the rights of fans even further and in more drastic ways.

The proposed legislation is also a step backwards in the fight for the rights of live event fans as it gives venues the authority to decide to use paperless tickets as they see fit. Already a hot button issue in ticketing legislation, paperless ticketing is a practice endorsed by the primary ticket market and promoted as a safeguard to prevent brokers from taking tickets away from fans.

However, upon further investigation, the American Antitrust Institute reported in a published white paper, written by James D. Hurwitz and presented to the U.S. Federal Trade Commission in January of 2012, that paperless ticketing “unjustifiably limits consumer choices” by violating a fan’s right of ownership over the ticket he purchases.

The Fan Freedom Project, an advocacy group founded as a way to give a voice to live event fans, proudly declares on their website that “We, the fans, own the tickets that we buy.” Paperless tickets, however, strip away these ownership rights because they do not allow a consumer to readily transfer a ticket, either as a gift or through reselling.

In a written statement, Fan Freedom Project president Jon Potter said “the amendment has several positive aspects for consumers. Unfortunately, the amendment does not similarly address anti-consumer challenges presented by primary ticketers, including Ticketmaster and sports teams who are trying to take ownership of the ticket resale market in order to stop resales by season ticket holders that are often below face value.”

The Fan Freedom Project, along with their network of supporters, wants policymakers to focus on the issues of the ticketing industry. They wish to draw attention to what they perceive to be the real issue, a lack of transparency in the marketplace, especially in regards to how many tickets are actually offered for sale to fans. Fan Freedom Project president Jon Potter told Billboard that “fans have the right to know how many tickets are available in the market.”

Fan Freedom members are not the only individuals to take issue with this practice. Florida Representative Matt Gaetz also spoke out against the issue when the sunshine state was considering a paperless ticketing bill. Gaetz was quoted as saying, “That ticket belongs to you, and you usually have the right [to sell it].”

If passed, Tennessee’s proposed legislation violates a second property right by stating that, “a ticket represents a revocable license… [that] may be revoked at any time, with or without cause, by the ticket issuer.”

Lon Belvin, owner of popular ticket brokerage TixCity, agrees with Potter. “Ticketmaster emails fans every week to tell them when events go on sale. That’s not enough,” Belvin recently told TicketNews. “They need to post how many tickets are available when the tickets go on sale, and then everyone would see what they are really putting out there to fans.”

Nashville’s Channel5 investigated Ticketmaster’s practices for major acts, such as Taylor Swift and Keith Urban. In 2009, Channel5 showed that “out of more than 13,000 seats at [Swift’s] Nashville show, there were really only 1,600 set aside for sale to the general public.” Channel5’s investigation can be read on its website, and focused on internal ticketing documents.

Similarly, Channel5 investigated a 2009 benefit performance by Keith Urban for which televised ads promised that tickets would cost just $25 and go on sale on Wednesday, September 2 at 10 AM. Channel5 discovered that “by 10 a.m. Wednesday, out of less than 15,000 seats, more than 10,000 had already been sold.” As with Taylor Swift, Channel5’s investigation of ticketing practices at the Keith Urban benefit included an examination of internal documents.

The proposed Tennessee legislation does not promote transparency in the primary ticket market as a way to hold Ticketmaster responsible to its consumers. Instead, the legislation would further empower the already dominant primary seller by allowing venues to choose paperless ticketing. Currently, one of the only secondary ticket market websites that supports the resale of paperless tickets is TicketsNow, a site that is both owned and endorsed by Ticketmaster.

Without being forced to openly reveal the number of tickets available during public onsales and given that their secondary market supports paperless resale, this proposed bill positions Ticketmaster to further solidify their monopolistic hold on the industry.

Andrew Langer, president of the Institute for Liberty and former Florida Director for Defenders of Property Rights, issued a written statement regarding the proposed legislation in Tennessee: “This proposal is crony capitalism at its worst, a brazen attempt to flex corporate muscle as a way of destroying competition. Rules that are created to infringe on individual rights have to advance some legitimate public purpose. The only purpose these rules have is to feather the beds of big ticket companies.”

With the Fan Freedom Project and other advocacy groups gaining traction in their support of consumer rights and fair market competition, ticket brokers around the country are joining together in opposition of this and other proposed legislation. The current status of the bill is available on the Tennessee General Assembly’s website.