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For the past two years, New York state has taken a hands-off approach to ticket scalping. It was decided by then-governor Eliot Spitzer that laws against ticket scalping didn’t make sense. The free market should decide the value of a ticket, and if that means a ticket sells for well-over face value then so be it. That hands-off law expired at the beginning of June, and by not renewing it New York has reverted back to the previous law, which made it illegal to sell a ticket for more than $2 over face value. When looking at scalpers charging double the printed price of tickets this may seem like a good idea, but don’t be fooled. When the state gets its hands involved in what should be a free market, everybody loses.
The greatest benefit of legalized scalping is that the free market gets to decide the value. A sports team like the New York Mets might print $25 on the ticket, but demand might dictate that it can be sold for $75. The Mets can actually get in on the ticket scalping action through a third party like Ticket Master or TicketsNow, which will charge a mark-up on the ticket price if the free market indicates the original printed price was too low. Let me remind the reader at this point that no one is getting “ripped off” by this. Just because the Mets guessed wrong when they originally printed the price on the tickets does not mean the ticket buyer “deserves” to be sold the ticket at that price. If a ticket buyer does manage to snag one of these $25 tickets for face value, he’s essentially profited $50. He can resell it for $75 and take his profit, or he can use it to attend the game and enjoy an experience that the rest of the market has deemed is worth $75.
The sports teams that need to sell tickets to stay in business probably benefit most from laws that allow scalping. Fewer seats go unsold as ticket speculators buy up tickets with the hope that they are priced under the market value. Sometimes they’ll guess right and the market will reward them with a profit, while other times they’ll guess wrong and the demand won’t be there to get them face value. In that case, the sports team and the end-user (the person attending the game) benefit. That ticket would have gone unsold without ticket speculators, while the end-user gets to buy a ticket for less than face value. This happens all the time on websites where ticket reselling is popular, namely eBay and StubHub. I’ve talked to one person who paid $50 on an online auction for Yankees tickets with a face value of $250. With the current law that makes scalping illegal, the Yankees make $0 on those seats, they remain empty for that game, and the person who would have enjoyed great seats at the new stadium instead has to stay home and watch it on TV.
Perhaps the best thing about the legalization of ticket scalping over the past two years is that new technology made it easier for everyone to get involved. You didn’t have to stand outside the stadium with a sign to sell your unwanted tickets. You could just log into a website, name your price, and wait for someone to show interest in them. This was especially good for season ticket holders, who often find they can’t attend every game in a season. They could sell off the tickets they couldn’t use, and sometimes even make a profit. Anti-scalping laws only guarantee that they’ll lose money on their unused season tickets. Season ticket sales are particularly important to sports teams, as they are ticket sales that are guaranteed upfront.
New York Governor David Patterson has yet to sign an extension to the “pro-scalping” bill that has already been passed by the legislature. Meanwhile dozens of professional sports teams, concert venues, and Broadway plays await a decision that could allow them to sell more tickets during these harsh economic times.
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Source by Daniel Rich
