Bill to legalize scalping splits venues, brokers

Repealing Michigan's rarely enforced ban against scalping tickets is, on its face, an effort to help out the average customer looking to sell a few unused tickets to a game or concert.
AP Wire
Mar 2, 2014

But it's also a high-stakes financial tussle — one between venue owners such as pro sports teams and public universities and brokers who buy and resell their tickets, mostly on the Internet.

So far, the brokers are winning in Lansing, where the Republican-led state House on Thursday voted 66-42 to legalize ticket scalping. Entertainment venues are hoping to block the bill in the Senate, despite its GOP supermajority that may be swayed that ticket holders should have no barriers in a free market.

The legislation's sponsor, Republican Rep. Tim Kelly of Saginaw Township, said "Uncle Joe" shouldn't be collared as a criminal while online brokers resell tickets with impunity — even if scalpers are rarely subject to arrest and prosecution.

"It occurs to me you either enforce the law evenly across the board or you decriminalize it across the board," he said. "The law is fuzzy, and I'm just trying to remove the fuzziness."

Scalping, or selling a ticket above face value, is a misdemeanor that can lead to a maximum 90 days in jail or a $500 fine.

Kelly shepherded his bill through the House despite opposition from some big players in Michigan's sports and entertainment industry — Palace Sports & Entertainment, Detroit's four major professional sports teams, Kid Rock, Michigan International Speedway and other venues.

They say the measure would do away with the only legal prohibition that keeps brokers honest and prevents them from gobbling up the bulk of tickets with high-tech online software and gouging customers.

Richard Haddad, vice president and general counsel for Palace Sports & Entertainment and the Detroit Pistons, said proponents of the legislation are misleading legislators to think regular fans who scalp tickets are at risk even though enforcement is uncommon.

"The law currently provides us with very valuable tools we're only going to use under very extenuating circumstances," he said.

The Palace has no interest in suing to shut down online brokers such as StubHub, because it understands there's a resale market for tickets, Haddad said.

"But there certainly isn't any need to drag the Legislature and government into this ... to make it easier for StubHub to tilt their profits," he said.

The debate in essence is about control.

Stadium, arena and concert hall officials say the more control they have and the fewer tickets there are in the resale market, the better it is for patrons. Brokers counter that it's often teams or concert promoters themselves ripping people off — withholding good seats until later, artificially creating pent-up demand and reaching their own resale deals with StubHub or Ticketmaster.

"We're not buying up all the tickets," said Joel Schwartz, owner of Big Time Worldwide, a national ticker brokerage based in Southfield.

He said brokers buy 1 to 3 percent of tickets to an event, in some cases 5 to 10 percent. Forty-two percent of the tickets he resells go for less than face value, he said.

"These promoters, teams and everybody — they're just wanting to have control over everything ... so they can keep jacking up the price. I'm the last bastion of free capitalism standing between the consumer and the promoter or team," Schwartz said, adding that teams and promoters already are scalping their own tickets. "People will be able to openly and freely sell tickets. That will result in a lower price to the consumer."

Michigan State University is among opponents lining up against the bill.

David Bertram, assistance vice president for state affairs, said the school is concerned about deleting a provision that allows scalping if ticket holders receive written permission from venues such as Spartan Stadium and the Wharton Center. That would discourage brokers from signing deals with the university, he said. The school now can enter into contracts in an attempt to prevent all tickets from being bought within minutes of going on sale and to put terms on how much tickets can be sold above market value.

"We believe the average fan is hurt. It will likely cause prices to go up in the secondary market," Bertram said of the legislation.

Those supporting the bill include the conservative Americans for Prosperity group, police officers, eBay and Michigan Citizen Action, a liberal watchdog organization that points out ticket buyers pay exorbitant processing fees and can only legally recoup the ticket's face value.

Lawmakers aren't splitting solely along partisan lines. Of the 62 House members who voted for the measure, 46 are Republicans, 19 are Democrats and one is an independent. Twenty-nine Democrats and 13 Republicans opposed it.

The Senate is expected to refer the bill to a committee on Tuesday.

House Bill 5108: http://1.usa.gov/1hsISvk

Comments

Former Grandhavenite

Between the generally insane prices and terrible business practices of basically all ticket issuers, scalpers, brokers, and anybody who deals with event tickets in any way it's hardly even worth going to big time concerts, sporting events, etc. I just don't understand why so many people are willing to pay $100+ for the cheapest seats at some huge venue to be a quarter mile from the stage. I've always had a lot more fun going to free shows at dive bars with $2 PBR's and standing ten feet from the band, and then going out back with the band for a couple shots of whiskey between sets.

The most annoying thing about Ticketmaster and all the similar companies is how they tack on so many ridiculous fees. How does it even make sense to have a separate order processing fee, handling fee, and "convenience fee" (because it costs them $4.95 for me to print the ticket using my own equipment, apparently.) If they do legalize scalping they're going to need some strict controls in place to stop people from gaming the system. There are tons of ways to make money through arbitrage and artificially manipulating the ticket supply. There have already been cases of people using botnets and DDOS attacks in jurisdictions where scalping is legal to immediately buy the entire ticket inventory for a show within seconds when it's obvious that a show will sell out, so anybody who actually cares about seeing the band had to pay a 'tax' in the form of higher prices to these guys.

Barry Soetoro

FGH - where is this alleged dive bar with no cover, two dollar PBR's and whiskey shots out back you speak of? Sounds like the perfect venue for Barry's Trib Commenters Beer Summit. Someone may have to smuggle in the high dollar single malt for Lani though.

Former Grandhavenite

I was thinking of Mac's Bar in Lansing specifically where some friends of mine have done several gigs. In one notorious incident that has never been lived down, the bass player made a flyer advertising the show and spelled the band's name wrong. I used to handle a lot of wiring up the audio equipment and speakers for their shows, and we recorded a few shows through the soundboard which was fun to be a part of.

I'd definitely be up for a Commenter summit. I'll bring the Hammer and Sickle brand vodka, Vlad can bring the steaks, and tetrahydra can provide the delta-9-tetrahydrocannabinol.

Vladtheimp

Scalping and they're complaining about an NFL team named the "Redskins"?

Way to focus on the wrong problem!

Former Grandhavenite

It's hilarious (and sad) that some newspapers now won't even print the team name of the Redskins. It's referred to as, "The NFL team from Washington."

Maybe as a compromise they can keep the team name and change the mascot to a redskin potato. On the other hand, it would actually be a really cool name if they just officially changed it to "The NFL Team From Washington" and it would be a perfect illustration of political correctness gone mad.

LessThanAmused

You continue to be an idiot on several different levels. The French introduced the dubious skill of scalping to the natives.....at least based on everything I've read over the last 50 years or so...
Maybe you want to refute dozens of historians as I'm sure you're more learned than they?

Vladtheimp

As you continue to demonstrate your ignorance, apparently it is O.K. to reference "scalping" which was undoubtedly a practice of Indians (Native Americans to you), no matter where it originated, but not to reference "Redskins" - any double standard there?

LessThanAmused

"Redskin" is a racial descriptor of disputed origin for Native Americans. "Scalping" on the other hand in NOT a racial descriptor and has more than one meaning as I'm sure you're aware.

Having a fairly large part of my heritage tied to Native Americans I personally find both terms distasteful, but I find your pathetic attempts to create ghost links and bogus connections even more so.

Pretty funny that one of the most racist people on here pretends to be offended by the use of a word that in it's current context, tickets, has nowhere near the racism content that you're implying it does.

Go yell at some clouds.

Vladtheimp

Your screen name precisely describes your lack of a sense of irony and humor. Have fun my friend.

LessThanAmused

um mmmm, What exactly does yours say about you?

http://www.huffingtonpost.com/20...

Vladtheimp

Maybe that I don't suffer fools gladly.

LessThanAmused

Stay away from mirrors then buddy and all will be fine!

Vladtheimp

From my screen name, you should know that I don't reflect in mirrors. (don't know about mirros).

LessThanAmused

Dang it, you win that round, I don't know much about vampires or whatever it is that you think you are......thanks for the heads up on the typo too, I usually catch those a couple hours later, but obviously you're spending more time here than I am.

I am curious though....assuming you're not a 14 year old girl, what's the attraction to a murdering, blood thirsty vampire creature thingy?? I have to say I honestly don't understand the fascination with this whole genre. Didn't you get enough to eat as a kid? You anemic?, got a dead thyroid? Mother wouldn't let you put ketchup on your pancakes?? What's the deal killer?

It just occurred to me why you're so focused on Obama...unfortunately if I put forth my proposition in post form it'd probably disappear, so I'll defer to your twisted imagination.

Barry Soetoro

"Inappropriate? Alert Us."

LessThanAmused

Barry, Barry Barry.....I said nothing, it was implied. Allegedly...

Barry Soetoro

I don't want your comments to starting disappearing like mine. You wouldn't believe how bad my feelings are hurt. I thought the Grimace reference to the Divas was especially witty. Again, I should have used the word "alleged". More tissues, please.

LessThanAmused

I enjoyed the Grimance reference myself and though how unfair it was that your comment got yanked and mine did not......no doubt it's some type of political bias on the part of the Tribune.

Oh, and man up dude, forget the tissues, just use your sleeve like real men do!

:-)

Vladtheimp

1. If I put ketchup on my pancakes my mother might have tried to stop me but it would have been too late - I would have killed myself (especially if it were Heinz and I were contributing to the vast wealth of Monsieur Heinz-Kerry).

2. I suggest you read "Interview With A Vampire" "by Anne Rice or "The Vampire Lestat"; they were pretty neat creatures.

3. I hesitate to think what your pathologic idolatry of Obama could have conjured up about my focus on Obama - especially if it would be removed by the censors but I've explained it many times here. Hint - It has nothing to do with Reggie Love.

LessThanAmused

1) You really can't help yourself can you? It's really a sickness that needs to be addressed and that's no reflection on your dear mother.

2)No thanks. As I said previously, I have zero interest in blood thirsty creatures, even if they're not republicans. I don't want to see blood, drink blood, use it as a creative medium....etc.

3) Pathologic Idolatry? You obviously have an extremely poor memory, or are just unable to pay attention. I'm not any more a fan of the current president then I was the previous one, although this one can at least formulate a complete thought. Politicians are the scum of the earth, along with lawyers and the Insurance lobby and I do my level best to avoid all 3 groups as much as humanly possible.
Here's a thought for your myopic mind to consider.....Just because I'm not a fan of your "side" doesn't mean that I'm, by default, choosing the other "side". The whole process is fatally flawed, which is why you're unending diatribes that pit one side against the other irritate rather than illuminate. Maybe that's not a concept you're capable of dealing with......
Don't let me stop your fun though, carry on. There's a never ending supply of clouds that need to be yelled at and you are just the man for the job!

Over and out!

Vladtheimp

"you're"

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