StubHub Sues Ticketmaster, Golden State Warriors, in Battle of Scalpers

http://www.washingtonpost.com/news/morning-mix/wp/2015/03/30/stubhub-sues-ticketmaster-golden-state-warriors-in-war-of-scalpers/

by gtCameron • 11 years ago

57 22 11 years ago

washingtonpost.com

jeffdavis• 11 years ago

Is there any reason ticket sales happen like this, rather than just selling directly from the venue? Why is scalping a crime, why not just sell at market price to begin with?

pat2man• 11 years ago

Scalping isn't a crime. They violated the terms of use by reselling on a third party website instead of using the Ticketmaster provided exchange.

The question is, can you force someone to resell a ticket on a specific website? My guess would be that the courts will say no.

mox1• 11 years ago

I think on a macro level, teams don't always want to sell every single ticket for maximum dollar. They really want to ensure a year over year constant revenue stream. So they contract with ticketmaster to sell all of their tickets at fairly set rates. The "Market Price" for an event for 6-8 months from now is going to swing up and down a lot.

There's also the perceived unfairness (think what would happen if a popular restaurant doubled its price on Friday and Saturday, people would flip out).

After a while, they realized that a pretty large secondary market had formed for tickets (teams get hot, rival team in town on a Saturday night, etc, etc) and the team / venue wants in on the action. So Ticketmaster created an "official scalper" marketplace to compete with StubHub and friends.

stevesearer• 11 years ago

Interestingly enough fine dining establishments are moving in the direction of tickets with a variable price.

Long, but a worthwhile read on the subject: http://website.alinearestaurant.com/site/2014/06/tickets-for...

"Having either static or dynamically variably priced tables by day of week and time – in a fully transparent manner – simply gives customers the option of paying a bit more for a prime time table or saving a bit of money for an off-prime table. It acknowledges the obvious. No one pays $ 275 for a good seat at a Cubs game, looks up at the nose bleed seats and complains that it’s not fair that those guys up there only paid $ 25. People accept the difference so long as the choice to buy either was their own."

EDIT: There was also some discussion about this on HN a while back: https://news.ycombinator.com/item?id=7853786

picks_at_nits• 11 years ago

Don’t forget that for some businesses, ticket revenue is just one stream, and they’re trying to maximize total revenue, over a very long term.

For example, if you take a sports business and raise ticket prices to a certain level, you will end up with businesses using it to schmooze. Families stop attending. You lose toy sales. Nobody buys bedding sets with the team logos.

And then one day, there’s a new hot place to schmooze, the businesses leave, and you’ve got nothing, because there aren’t any adults with fond memories of coming to games as a kid.

Nursie• 11 years ago

It's not a crime AFAICT, but there are a myriad of reasons people might not want to sell at 'market'

Sports teams and sports associations like to be family friendly, which means keeping prices in check. This is partly self-interest - disenfranchise families coming to your games and interest might drop off.

Many bands, though, would like their fans to be able to come and see them regardless of income level and think a first-come, first-served basis is much fairer than purely who can afford the most.

And then there are people like me who think that inserting yourself between buyer and seller purely so you can hold very limited-release goods to ransom is just a shit thing to do.

matthewowen• 11 years ago

I usually buy baseball tickets via StubHub. Not all seats within a section are equal (closer rows are better): the better seats are typically held by season ticket holders. Most season ticket holders don't go to every game. They sell the games they can't make on StubHub.

As a result, you can often sit in meaningfully better seats for less than you would pay to buy directly from the team.

cowsandmilk• 11 years ago

Additionally, having different prices for every game is difficult and it is hard to predict that a late October baseball game will be important for the playoffs and exciting. Secondary markets can incorporate that information that shows up 2 or 3 days before a game that isn't present in prices set months ahead.

guelo• 11 years ago

Season tickets. Teams prefer season tickets because they force fans to buy the whole season, including the boring games. Plus they get a bunch of the money up front. But most fans can't go to every game, so you get a big secondary market.

TillE• 11 years ago

Is that actually possible? I don't know about other sports or the US, but in Germany or England a football club's season ticket will be some kind of plastic card with your name on it.

They may not necessarily check ID before a match, but you'd still need to trust a stranger with it. However, I know Arsenal runs a ticket exchange to let season ticket holders sell off individual matches (at a fixed price).

zippergz• 11 years ago

Many music artists don't want to give off the impression of being greedy. They know that selling tickets for $500 or $1000 will make them look bad, and piss off a lot of fans. Fans are still pissed off when scalpers buy up the tickets, but then they’re mad at the scalpers rather than the artist. But, the artist can get the best of both worlds by doing backdoor deals with Ticketmaster and others to get a cut of the resale market - it looks like scalpers are doing it, but it’s really the artist. The whole thing is shady.

jedberg• 11 years ago

Ticketmaster is a company designed to be the "evil middleman". There's lots of info around the internet about how most of the money the collect goes to the venue without you knowing it.

I'm pretty sure they are basically sending most of the money back to the Warriors, which is why they are so adamant about people using Ticketmaster.

They don't want to set up their own marketplace because then they would be the "greedy" sports franchise, so Ticketmaster sets it up and take the heat.

jsabo2• 11 years ago

For anyone else who is interested, I tried to find something about venues getting a cut but only found this (which also references a now shut down blog that I haven't checked for an archive of): http://www.laweekly.com/music/ticketmaster-and-servants-band...

Apparently during congressional testimony they mentioned that venues, and sometimes artists or promoters, get a cut of the service fee. They quote some mid-level promoters that dispute the promoter/artist fee but it doesn't really go into the venue statement. In my experience with small shows, the venue's money is baked into the ticket price, not the additional fees.

pkteison• 11 years ago

The quote in that article is fairly accurate, I don't see why you dismiss it. It's congressional testimony so you can get it from the source: http://www.gpo.gov/fdsys/pkg/CHRG-111shrg54048/pdf/CHRG-111s...

"...Ticketmaster’s service charge is, you know, Ticketmaster was set up as a system where they took the heat for everybody. Ticketmaster frequently gets a minority percentage of that service charge. In that service charge are the credit card fees, the rebates to the buildings, rebates sometimes to artists, some- times rebates to promoters. So Ticketmaster has been the—we are like the IRS. We deliver bad news."

pdxgene• 11 years ago

Those cuts are typically referred to as "rebates", and yes, they're standard operating procedure.

There's an interesting history behind how this practice got started, that's a good lesson in how multi-party markets work. Back in the good old days, touring acts typically got a modest percentage of gross ticket sales for a given concert, leaving enough for the promoter and venue to cover costs and make a profit.

At some point (the 80s, maybe?), artist percentages started creeping up closer to 100% (in one ridiculous example, Jimmy Buffet got "105% of gross ticket receipts"), so venues and promoters had to make money on something other than tickets.

Since "ticketing fees" weren't calculated into the gross ticket receipts of which a percentage were due to the artist, they were a green field for exploitation and creative deal-making, like the "promoter rebates" referenced above.

In many cases (almost all venues above a certain size), venues sign exclusive ticketing company contracts that come with up-front bonuses or advances on fee rebates, which make ticketing companies kind of like cash machines (or payday loan vendors?) for venues.

The general public perception of "ticketmaster is evil" is, as with most things when you look beneath the surface, much more complicated than it appears.

Scalping itself is a related but different issue that ticketing companies and venues could certainly limit or end if they had the will, but the system works just fine for them, so there's really not much incentive to change.

[sources: various anecdotes from music industry veterans who will likely deny a lot of the above if pressed ;-]

sosuke• 11 years ago

Out of curiosity, in case someone can explain this to me, I want to ask a question. Tickets for an event went on sale at 10AM from a local venue. You can buy tickets from the venue site, but not pick a location, just a price point. Each time I select a ticket and price point they ask me to enter a captcha. I try again and again to see a no seats message. I go over to StubHub and BigStub only 7 minutes after 10AM and see they have thousands of tickets available for sale at a 50% price increase. They also have better seats than were available to me on the venue's site.

Is the venue just pre-selling tickets to StubHub or BigStub, or are there scalpers buying that many tickets.

calbear81• 11 years ago

Here's an article on Slate about what might be happening (albeit a bit old) http://www.slate.com/articles/business/moneybox/2011/03/tick...

Also, generally there are pre-sales. I get notified about early sales on quite a few events either via American Express or Visa Signature.

slg• 11 years ago

Some scalpers will short sell tickets. They sell tickets they don't have on the assumption that they can purchase tickets later at a lower price. This was a large problem at this year's Superbowl. Tickets normally spike a couple weeks before the game and drop in price as the game approaches. This pattern didn't happen this year and prices actually went up drastically as the game approached. Many of these short sellers that were depending on ticket price dropping ended up having to refund the tickets they short sold at 2x or 3x the original purchase price. That ended up being cheaper than taking the loss on price they sold the tickets at minus the price they would have to buy the tickets at to fulfill their order.

bigbossman• 11 years ago

I have Golden State Warriors season tickets, and use both StubHub and Ticketmaster for ticket resales. Most of the secondary market liquidity is still found at Stubhub, but I would actually prefer that more exchanges occur through Ticketmaster.

Pricing: From a seller perspective, selling through the official Ticketmaster channel provides significantly better pricing. For example, if a customer spends $10 on a ticket through Ticketmaster, I will net $9.50 from the sale (5% commission). On Stubhub, if a customer spends $10 on the same ticket, with the way their fee structure works, I would only net $6.01 (an effective 40% commission).

Security: Tickets sold via Stubhub provide a pdf ticket that shows my actual name. Tickets sold via Ticketmaster reissue the original ticket in the purchaser's name.

StubHub Sues Ticketmaster, Golden State Warriors, in Battle of Scalpers

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