Ticket companies fighting Md. proposal to cap resale prices

Listen to this article

ANNAPOLIS — Ticket companies, including StubHub, TicketNetwork and Vivid Seats, are pushing back against state lawmakers’ proposal to cap resale prices and other measures to limit misleading and deceptive practices in ticket sales.

Lawmakers aren’t looking to target people who resell a $100 concert ticket for $200 to “make a little pocket money,” or to prevent individuals from reselling their tickets, state Sen. Dawn Gile, who’s sponsoring the proposal, said in an interview.

Rather, they’re trying to crack down on ticket brokers purchasing large quantities and selling them for “absolutely outrageous” prices.

“It’s not a free market,” Gile, an Anne Arundel County Democrat, said in an interview. “It doesn’t benefit the venue, it doesn’t benefit the artist, it doesn’t benefit the consumer.”

Ticket companies appeared in their written testimony to lawmakers that they’re open to parts of the proposal but clearly opposed price caps.

“We are concerned that the bill’s price cap requirement for dynamic pricing may have unintended consequences as written,” Tyler St. Clair, a member of Vivid Seats’ public policy team, wrote to the Senate Finance Committee. “Not every performer or team is as popular as Taylor Swift, not by a long shot.”

Kevin Callahan, a spokesman for StubHub, wrote in testimony that the company values its “ability of our users to buy and sell tickets at the prices they deem appropriate, without regulatory interference or manipulation through mechanisms such as price caps or floors,” and he wrote that price caps would drive sales from second-party platforms and onto unsecure sites.

The companies’ representatives also said the measure targets the wrong part of the market.

“This issue popped up because of Ticketmaster and the Taylor Swift Eras concert,” said William Kress, a principal with the Annapolis lobbying firm Kress Hammen Government Affairs.

The U.S. Department of Justice launched an antitrust investigation into Live Nation Entertainment after national outrage over ticket sales for prominent touring artists like Taylor Swift and Beyoncé in recent years, and federal lawmakers later convened a hearing to signal their intent to address the issue.

Predatory practices, though, have extended beyond major shows and globally renowned artists, resulting in prohibitively high prices even at local venues, Gile said.

Concert venues, artist groups and the Consumer Protection Division of the Office of the Maryland Attorney General said during a Senate Finance Committee hearing Wednesday that previous measures to rein in price gouging and ticket scalping have been unsuccessful, and that Gile’s proposal would help prevent exploitation they’ve seen for local shows.

Audrey Fix Schaefer, communications director for Merriweather Post Pavilion in Columbia, said companies have recently purchased tickets worth around $100 and resold them for thousands of dollars. One company sold parking spots, despite the fact that Merriweather doesn’t charge for parking, she said.

Senate Minority Leader Steve Hershey, though, said the proposal was “protecting Marylanders from themselves” and appeared to be in response to an “isolated” incident.

“At the end of the day, consumers have the right to look around at a number of different platforms and make a decision,” he said during Wednesday’s hearing.

Hershey said companies are putting willing buyers and sellers together, and that they have a right to determine the price.

Hershey and fellow Republican and committee member, Senate Minority Whip Justin Ready, raised concerns about whether season-ticket holders would still be free to resell their tickets.

Gile said season-ticket holders would be exempt from a state ban on speculative sales, considering they own what they’re selling, Maryland sports teams have asked for “flexibility” for season-ticket holders.

The proposal has received some criticism for not targeting the primary ticket market, which Ticketmaster dominates.

The primary online marketplace is where event organizers determine the price, revenue sharing and platform that will sell the tickets, and it largely dictates the volume and value of tickets resold in the secondary market.

Brokers can dominate the secondary market because of technology, like bots, to purchase loads of tickets as soon as they go on sale. Federal lawmakers in 2016 outlawed the use of bots to rapidly buy up high-demand tickets, but the law is rarely enforced, according to Gile’s office, and their use still overwhelms the primary marketplace.

Gile said Ticketmaster and the larger primary market will be subject to all-in pricing, among other measures in her bill, but regulating the company as a potential monopoly is beyond the realm of the state legislature and falls to federal antitrust laws.

Gile’s proposal would require ticket sellers to offer all-in pricing with an itemized list of charges, ensuring consumers see the base price and all fees up front and eliminating “unpleasant surprise fees” at the end of a transaction.

Resale sites like StubHub, SeatGeek and Vivid Seats would have to limit their fees to 10% of the initial ticket price.

The new law would also ban speculative tickets, in which brokers “resell” a ticket they don’t yet have, relying on their ability to get tickets when available.

Her office also heard about times in which a venue, like Merriweather Post Pavilion, would announce a show and plans to sell tickets a few days later, only to have ticket brokers sell speculative tickets on the secondary market at inflated costs and create the impression that an event is selling out.

Maryland is one of a few states that requires brokers to disclose when they’re selling speculative tickets, though Gile said it hasn’t prevented the practice.

“It’s mind boggling that you can sell something that you don’t actually own,” Gile said.