Mike Payan is a political activist and a former vice chair of the Sussex County Democratic Party.
We music fans disagree about a lot, but one thing most of us do agree on is that we don’t like Ticketmaster.
Ticketmaster is the gorilla in the room when it comes to ticket sales, accounting for 70%-80% of all the concert tickets sold in North America. Yet it also has a lousy reputation among fans, artists and lawmakers alike. Taylor Swift has called it out. So has Joe Biden.
That’s why it was so gratifying to see a coalition of state attorneys general challenge Live Nation, Ticketmaster’s parent company, over alleged monopoly practices. Delaware Attorney General Kathy Jennings joined that bipartisan effort before the U.S. Department of Justice reached a settlement with the company earlier this year. Some of the states kept the suit going and, in April, secured a historic federal jury judgment for fans who had been overcharged.
So, why is the Delaware legislature now trying to undo their hard work?
At issue is a bill before the state Senate, Senate Substitute 2 for Senate Bill 181, which would impose a “price limitation” of 110% on all concert ticket resales. That means, if you buy a ticket to a concert and sell it to someone else, you can only tack on 10% of the original price.
At first glance, it sounds like a smart idea. Concert ticket prices are rising, inflation means fans have less money to spend, and everyone knows scalpers can take advantage of consumers. Fans are right to be furious when tickets disappear in seconds, and hidden fees inflate prices at checkout.
But lawmakers should remember that Ticketmaster itself profits from much of this dysfunction. Tickets often get resold on Ticketmaster’s own marketplace, allowing the company to collect fees three times over. Federal investigations even uncovered allegations that Ticketmaster employees were instructed to “turn a blind eye” toward brokers exceeding ticket-purchasing limits.
To the bill’s credit, SB 181 bans the automated computer programs that scalpers use to purchase thousands of tickets per event, evading purchase limits entirely. That’s a worthwhile reform. The problem is the bill’s resale price cap, which could ultimately strengthen Ticketmaster’s dominance by hurting smaller competitors far more than the industry giant.
Ticketmaster’s parent company supports a price cap on ticket resales. That should be our first clue that this bill will ultimately backfire in ways that hurt the consumer.
While most ticket companies make most of their profits off ticket sales, Ticketmaster is an enormous company with other profit centers it can draw upon. That includes owning most of the nation’s largest amphitheaters, a robust artist management business and parking venues at events, and even selling water at concession stands. Ticketing does not even comprise 20% of its annual profits.
Such immense market power is why Jennings and the other attorneys general sued in the first place. Ticketmaster has elbowed its way into every part of the entertainment industry — and then tried to make it harder for anyone else to compete.
Yet Ticketmaster wants even more: total control of the ticket market. This is where Delaware’s price cap goes from consumer protection to corporate trap.
Ticketmaster’s smaller competitors are less diversified and focused more exclusively on ticket sales. Thus, they stand to lose a lot more in revenue if the price limitation goes into effect.
The result will be to diminish and maybe even sink Ticketmaster’s competition. This will give Ticketmaster even more dominance and allow it to jack up ticket prices even higher.
What Ticketmaster is doing is quietly exploiting our legislature to try to make itself even more money.
It’s not just Delaware: The company is currently trying a similar stunt in the District of Columbia, a move opposed by progressive Mayor Muriel Bowser’s administration. A similar bill was placed before the Maryland House of Delegates’ Economic Matters Committee, where it received close scrutiny from members before being held until the legislature adjourned for the year.
But their efforts are especially frustrating here. Whatever you think of our hometown son Joe Biden, it was his administration that launched the lawsuit against Ticketmaster that the states carried forward and ultimately turned into a major courtroom victory for consumers in April.
Our state has long punched above its weight when it comes to music, from Bob Marley growing up in Wilmington to Dave Grohl vacationing in Rehoboth Beach. We can’t now let ourselves be taken advantage of by a corporation that wants to make these and so many other musical acts more expensive.
The way forward isn’t to cap ticket resales; it’s to keep fighting Ticketmaster’s anticompetitive practices. It’s to stop it from turning a blind eye to bots, which buy up tickets faster than people can and then mark them up. It’s to keep clamping down on its use of fees, which can massively inflate the price of a ticket.
Delaware lawmakers were right to question the actual and unintended consequences of SB 181 and its potential to strengthen the Ticketmaster monopoly and harm consumers at their recent House of Representatives’ Economic Development/Banking/Insurance & Commerce Committee hearing, and they should keep up the scrutiny. As summer approaches, let’s make sure people across our state are able to afford to go to a concert. And let’s make sure big corporations don’t take advantage of our laws.
Reader reactions, pro or con, are welcomed at civiltalk@iniusa.org.
