Should Musicians Be Able to Pull The Plug on StubHub, Resellers at NY Shows?

Some New York lawmakers want to give musicians the power to stop resellers from flipping high-priced tickets to their shows on the secondary market.

State Sen. James Skoufis has introduced legislation that prompted allies of major platforms like StubHub to dispatch lobbyists to Albany this week. They argue the measure would empower an ever larger behemoth in the live entertainment industry: Ticketmaster.

“This system is abusive to fans.It’s abusive to artists,” Skoufis said. “It’s abusive to every single stakeholder except for the resellers and the very wealthy individuals who are able to afford those very marked-up resold tickets.”

The resale restrictions are one piece of an omnibus bill that Skoufis, a Democrat from the Hudson Valley, hopes will get a vote before the state Legislature adjourns next month. New York lifted most of its restrictions on ticket scalping in 2007, allowing a regulated secondary market to flourish online.

Lawmakers must reauthorize the ticket resale rules every few years, including this one. Skoufis and Assemblymember Ron Kim, a Democrat from Queens, are pushing to insert more consumer protections into the law ahead of the summer deadline.

But their proposal has spooked resale platforms like StubHub. Dana McLean, executive director of the Coalition for Ticket Fairness, which includes StubHub, said the proposal puts around 2,000 jobs at ticket brokers and resellers at risk.

She also warned that passing the bill could lead to an unregulated secondary market, where consumers could be confronted with counterfeit tickets.
“It’s going to limit the access for fans. It’s going to stifle competition. It’s going to stifle customer service,” she said.

Economists have long puzzled over ways to cut brokers out of the market for live event tickets. If demand for a show is higher than the price set by the artist, promoter and venue, then people who buy initial tickets can realize gains through resale.

Consider Taylor Swift’s recent Eras Tour. The initial price of tickets ranged from $49 to $449, but seats sold on the secondary market sold for thousands, depending on the city. Tickets to see Bruce Springsteen play a Broadway theater sold for as much as 10 times their list price on StubHub.

A secondary market captures the additional money that people are willing to pay above face value, which is known as excess demand. But none of that money goes to artists, noted Randy Nichols, a talent agent. He said artists set prices based on what they think the market demands and what is fair for the fans.

“If that artist should choose to use that yield management to charge an extra $200, they’re likely not just putting it in their pocket. They’re likely taking that $200 and making a better production for the fans,” Nichols said. “The broker is simply taking that money out of our community.”

McLean countered that prohibiting this secondary market would put too much power in the hands of venues — many of which rely on Ticketmaster.

“What we’re really looking to do is protect fans,” she said. “This really empowers Ticketmaster — it empowers the monopoly.”
Representatives of Ticketmaster didn’t return requests for comment.

Other provisions in the Skoufis-Kim bill include a cap of 25% on the amount of fees that either a ticket seller or reseller may impose. Current law prohibits unreasonable fees, but doesn’t specify what percentage is reasonable.

The legislation would also prohibit brokers from selling “speculative” tickets that they don’t yet possess, including tickets for events that haven’t yet hit the primary market. It would also require more transparency about the number of tickets that are held back by event promoters.

Story by By Jimmy Vielkind/New York Public News Network

Image: Drazen Zigic on Freepik