Lawmakers tackle tickets, scalping and sellers' rights

Posted Monday, Mar. 25, 2013  comments  Print Reprints

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AUSTIN -- When a Texan buys a concert ticket, is it a license to have a great time or does it become personal property that can be sold or traded?

Texas lawmakers plan to take up the question that has triggered legislative fights in other states and could determine how tickets for concerts, sports and other major events are sold, resold or even taken away. An attempt to wrangle tickets to the Houston Livestock Show and Rodeo last month put a spotlight on the problem.

The rodeo discovered that season ticket holders, sponsors and others who had tickets to a George Strait concert were reselling their tickets, some for as much as $11,000. Rodeo staffers decided that reselling the tickets for a higher value violated the terms of the ticket and canceled 5,000 to resell the tickets to someone else.

That set off a backlash from the ticket holders who said the tickets belonged to them. They said they should be allowed to do anything they want with their property, including selling them at whatever price the market would bear. But the fine print on those tickets made the rodeo's revocation and reissue of the tickets perfectly permissible.

While some Texans found the revocation of their tickets outrageous, Tennesseans had a different experience. Garth Brooks put on a flood relief concert, but many of the tickets intended for victims and volunteers ended up with scalpers, who sold them for three times the face price.

The Tennessee Legislature is considering a bill that would allow more restrictions to make sure that only the person who buys a ticket uses it.

Event promoters say the goal is to stop scalpers from buying big blocks of tickets and then reselling them at inflated prices that most people can't afford.

Eventually, some promoters would like them to work like airline tickets, where the purchaser's ID card serves as an electronic ticket and is nontransferrable. In January, Ticketmaster required 400 people who bought tickets for a Kid Rock concert in Michigan to present an ID or the credit card used to buy the ticket to get in, leading to a warning from a local consumer group.

Such rules present a challenge for corporations that buy tickets in bulk for employees or to offer to customers or friendly politicians. Tour groups also oppose tighter restrictions because they often buy tickets in bulk to include in package deals.

But Texas lawmakers pride themselves on property rights and free markets and are considering a bill that would go in the opposite direction.

Rep. Rene Oliveira, D-Brownsville, wrote HB3041, which would ban the ticket seller from stopping the resale or transfer of the ticket, limiting the price the ticket holder can charge for it or requiring an ID to use the ticket.

Next week Oliveira is expected to bring his bill up before the House Business and Industry Committee, which he leads. Sen. Larry Taylor, R-Galveston, has a similar bill in the Senate. The measure is supported by a group called Fan Freedom, an advocacy group that includes ticket resellers, fans and consumer advocacy groups. The group believes that major ticket agencies have too much power over the market.

Both sides of the argument promise that their solution will guarantee greater access to tickets, but for completely different reasons.

Ticket sellers say that with greater power, they can shut down scalpers who buy up blocks of tickets and deny normal fans the chance to buy at the regular price. They also complain that the artist and venue don't get to share in the profit from the higher ticket prices.

Yet supporters of ticket holder rights say ticket sellers are the problem. Tickets for the biggest events can sell out within minutes of going on sale, not because the demand is so high, but because many of the tickets are reserved for fan clubs, sponsors or people enrolled in elite credit card programs. It is not unusual for more than half of tickets to be reserved before they go on public sale.

Texas lawmakers will hear testimony and look into the issue over the next few weeks and decide how to balance what is best for the ticket sellers and buyers.

Other states will certainly be watching to see what Texas does.

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