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Ticket Bills Rebuffed In Florida Legislature Again

Two ‘Ticket Wars’ bills on restrictive ticketing have been tabled as the 2015 Florida Legislature Session winds down. Widely supported by several major league franchises, the bills were seen as an opportunity for Ticketmaster to create a closed market system, thereby controlling both the primary and secondary.

A major concern from critics is that the bills would eliminate choice by the consumers to find various avenues to purchase tickets.

With only four days left in the Legislative Session, both versions of the bills, House Bill 463 and Senate Bill 1142, appear to have died in committee for yet another year.

House Bill 463, sponsored by Florida’s Spring Hill Representative Blaise Ingoglia, is meant to make reselling more up-front, eliminating server ‘bots’ which devour tickets when they go on-sale, as well as alert buyers that they are paying beyond face value for the ticket price on a secondary market site.

Note: Rep. Ingoglia could not be immediately reached for comment.

Senate Bill 1142, sponsored by Florida’s New Port Richey Representative Wilton Simpson, would actually create criminal penalties for reselling in general.

Note: Sen. Simpson could not be immediately reached for comment.

Senate Bill 1142 hasn’t made it through its committees, but House Bill 463 has, and received a first reading on the floor of the Florida House of Representatives. Both of these bills are off-springs of House Bill 163, which received a 115-0 vote in the House in 2013, but died in Senate Committee.

Florida Legislature’s Annual ‘Ticket Wars’ Battle

Florida Ticket Brokers Association President Jimmy Siegendorf said that he’s experienced state lobbying and legislative efforts against the secondary market industry in at least 6 of the 10 years he’s operated his ticket reselling business Premium Seats USA.

“They keep trying to push some harmful legislation, and we’ve been successful in defeating it,” he said. “We go to these meetings, it’s heavily debated, everyone spends a lot of money, nothing gets accomplished.”

Siegendorf said Florida is a state where precedence in law can have a national affect and credits Ticketmaster of riding the coat tails of a small box office association which has been advocating for secondary market changes.

“They keep coming back, we keep opposing it. These committee meetings are ridiculous, especially how much opposition there is against these bills. People are 80 percent against Ticketmaster,” he said. “But then, the power of politics allows the bills to pass through committee unanimously. These bills this past year went through three of the House committees, passed through two of three Senate committees, before we were able to successfully keep it off the legislative agenda.”

Siegendorf said his association’s strategy has been to work with the bill’s sponsors, to come out with regulations that benefit, not harm the industry.

“There are good intentions by some of the parties involved and we worked very hard on a compromise, but it didn’t have the momentum to go forward,” Siegendorf said. “Going through this process, you have consumers getting educated, lawmakers who are season ticket holders, and as they get educated, we have an opportunity to sit down, explain our side of the story, on how it makes a lot of sense in affecting my business. What I’m hopeful for is that eventually, we’ll have some protections like they do in Colorado and New York for season ticket holders.”

The State of The Secondary Is At Stake

The main motivations of Ticketmaster, venues, promoters and professional sports franchises is not consumer protection, Siegendorf said. It’s about capturing and monopolizing marketshare.

“They very much have a clear understanding of what the secondary market is about,” Siegendorf said. “The true intentions of this legislation is about giving primary sellers great control over the secondary market, and keeping it for themselves. Ticketmaster has their hands in both cookie jars, and I don’t think that consumers, or lawmakers, understand that Ticketmaster is playing in both sandboxes.”

The issue of ticket brokers using ‘bots’ to circumvent purchasing windows and devouring all of the available tickets for an on-sale date of a concert is eroneous, Siegendorf said.

“I don’t personally know anyone who is using bots. It’s already illegal here in Florida, something that passed a few years ago that the FTBA supported,” Siegendorf said. “It’s not good for the consumer, it’s not good for me trying to buy tickets. I think those things were addressed recently in a settlement with the F.T.C. (Federal Trade Commission) and most of those transactions represent a very insignificant amount of the total transactions in the marketplace.”

Despite this, Siegendorf doesn’t expect Florida’s lawmakers to end the ‘ticket wars’ simply because the clock ran out on the 2015 Legislative Session.

“I have no reason to believe, looking back at history, that we won’t be back doing this again next year,” he said.

Seeing Ticketmaster As A Monopoly

One of the advocates for Siegendorf’s position is not a ticket broker, but a Tampa Bay businessman named Frank Wuco, who simply caught wind of the story through local press, and found the entire thing bizarre. Then he recalled how many times he’d be stuck with concert tickets himself.

He sees Ticketmaster’s support of the two bills in the Florida Legislature as a monopolistic control of the marketplace.

“It controls the entire market and Ticketmaster knows that. Really, it is no different from saying that if you purchase a brand new car, and you want to sell the car, a few months down the road, you can’t,” Wuco said. “You either have to bring the car to the wrecking yard to have it destroyed, or you have to give it back to the car company and only they can resell it. It’s really absurd.”

Overseas, where Ticketmaster has more of a strong-hold on the primary and secondary markets overall, the company is less inclined to support legislation similar to what they are advocating in the United States. Ticketmaster Resale Managing Director Christoph Homann said that “secondary ticketing regulation does not work” during a presentation in Oslo, Norway.

Ticketmaster UK actually had to defend itself in the United Kingdom in May 2014, against charges that the company was advertising that it had tickets for The Cure on sale, but directed fans to the higher priced tickets on their secondary market site instead. In January 2015, Ticketmaster UK welcomed the UK’s House of Commons’ elimination of secondary market rules, which had been put in place by the House of Lords, which would have made more transparency for ‘ticket touting’ and was legislation backed by 85 music, sport and theatre companies. German-based tour promoter MCT split with Ticketmaster in 2015 over the company’s secondary market policies.

Wuco also doesn’t buy the entire Ticketmaster ‘bot’ enforcement argument for state laws being passed either.

“It strikes me as odd that Ticketmaster is putting itself out there as both the wholesaler, retailer the commerce arm, and the enforcement arm for the industry,” Wuco said. “All of the concern that they have about cyber robots coming into their site when a concert is announced and snatching up all of their tickets. Right now, today with modern technology, defeating robots is really one of the easiest things for a cyber security person can do. Ticketmaster can well afford the simple technology required to defeat ‘bot’ buyers.”

The whole notion of a buyer not owning their ticket is something that Wuco considers laughable.

“From my standpoint, as a purchaser of a ticket, I say absolutely, we own that ticket,” Wuco said. “That is too many lawyers getting involved inside of a huge company like Ticketmaster and crafting an argument that protects their interests. And it’s just completely unrealistic. Once you’re spending this much time explaining that something like a concert ticket is a license and its not just a ticket that allows you entrance into a venue to watch a concert that’s when you know its come off the rails of reason. Because you are actually crafting an argument where one was never necessary before. I can transfer my G.I. Bill to my children, I can transfer it to my wife, but I can’t transfer the use of a Backstreet Boy or One Direction concert ticket to someone else?”

By creating laws which allow Ticketmaster to become the sole primary and secondary option in the marketplace, that can have devastating effects on ticket revenue overall. It creates a system in which the primary market also acts as a secondary, hindering the ability to showcase true market demand for the ticket product.

A system which is inherently focused on removing the original buyer option out of the primary market, favoring the secondary, in order to create a sell-out where no one exists, transforms ticket sales into a false-positive. It allows the primary reseller to shift seat inventory to the secondary, charging a higher premium price on the secondary, thereby reducing the ability of the general consumer to gain access to tickets are the original, lower price.

Wuco cites the amount of resources that Ticketmaster is placing on lobbying state legislatures as a sign that their priorities on less on consumer protection through restrictive ticketing, more on control of the marketplace.

“Ticketmaster with the amount of money that they have, that they are putting into this, getting legislation put through these various state houses, is not cheap,” Wuco said. The amount of money that is spent on lawyers, lobbyists, and the administrative costs of sponsoring and supporting legislation in all 50 states is phenomenal. For a fraction of what Ticketmaster spends on that lobbying, they can easily install and combat against.”

What Ticketmaster is doing goes against the bedrock of free commerce, Wuco said.

TM’s Multi-Leveled Monopoly Play

“Even the sports tickets, you have an entire venue, or leagues, that are in bed with Ticketmaster, it becomes a monopoly on top of monopoly. These aren’t just simple monopolies, they span multiple verticals of commerce,” Wuco said. “A huge swath of the founding documents of this country had to do about commerce. This completely flies in the face of it. The public is just not aware of it, I don’t think.”

Echoing Wuco’s charge against Ticketmaster’s monopoly is a 2012 New York Times Op-Ed by The American Anti-Trust Institute President Albert A. Foer, Who Owns My Ticket, questioned Ticketmaster’s ability to control the secondary market as a good thing.

“Ticketmaster says its restrictions on the resale and “gifting” of its paperless tickets act as safeguards against various practices: scalping; the bulk purchasing of tickets by automated software bots; and the use of counterfeit, stolen or lost tickets.”

“But in reality, the restrictions represent an effort to control the secondary-ticketing market and stifle competition from independent resellers and resale marketplaces like StubHub, where tickets are often sold for less than face value. (The American Antitrust Institute, of which I am president, received a modest contribution, in the form of sponsorship of a conference last year, from an advocacy group financed in part by StubHub.) Paperless tickets bought through Ticketmaster may be resold, for example, only through its own resale Web site, which often prohibits sales below face value, sets maximum sale prices and charges a fee for transfers.”

That type of system is, in fact, a monopoly.

And with U.S. Justice Department 2010 interest in how the merger of Ticketmaster/Live Nation would craft its business relationships and touring dates, this may be cause for concern even for TM’s shareholders about pending Federal legal action down the road.

The argument can be made that Ticketmaster already controls so much access that the entire marketplace is vertical, with only a few independent sellers left on the secondary market, Wuco said.

“Ticketmaster has already eliminated the competition to such a huge degree that there its an unimaginable that a smaller competitor can come up,” Wuco said. What about the little guy who wants to compete by selling tickets? Those little guys don’t stand a chance. There only is the secondary market where that happens. On the primary market, you don’t get in, you don’t to the game unless through Ticketmaster. They don’t just control ticket sales, they control access to an entirely new market vertical. Then things get really problematic for the argument.”

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