Senator Schumer’s Tickets Legislation Not Quite As Advertised

Perhaps U.S. Senator Charles Schumer was inspired by Trent Reznor. Recently, the Nine Inch Nails front man posted an article on his band’s website calling for the demolition of the secondary ticket market.

Maybe Senator Schumer was outraged over the February incident involving Bruce Springsteen tickets. Fans trying to purchase tickets to one of his concerts were directed away from Ticketmaster’s main website to the website of their subsidiary, TicketsNow, a ticket reseller. On that site, tickets were being sold for considerably more than their face value.

Whatever his inspiration, Schumer’s proposed anti-scalping laws do little to add transparency or eliminate the mechanisms that frustrate fans.

The bill Schumer plans on introducing to congress imposes a two-day waiting period on tickets. Resellers must wait 48 hours, starting from the time tickets first went on sale by the primary provider, before they can resell tickets on the secondary market. The legislation also forces ticket resellers to obtain a federal registration number from the Federal Trade Commission.

While the measures included in the bill seem like logical steps to level the playing field between the consumer and the reseller, they do little to combat the real scourge of the secondary ticket market and that’s the artists and promoters. Most of the tickets sold by resellers are provided by the artist or the promoter in hopes of profiting from their high markups.

A famous example of how an artist can find an extra revenue stream in the secondary ticket market occurred last August and involved the sale of Neil Diamond tickets.

Less than a minute after tickets went on sale for several of his performances at Madison Square Garden, more than a hundred of the best seats in the house were available on TicketExchange.com, another Ticketmaster subsidiary. This practice has been confirmed by former Ticketmaster chief executive Sean Moriarty.

Due to the large amount of “A” list artists connected to Ticketmaster, this practice may be utilized by Britney Spears, Celine Dion, Bon Jovi, Van Halen, Billy Joel and Elton John. Depending on the tour, and the artist, having a pipeline to the secondary ticket market can create an additional $2 million in revenue.

By the way, Ticketmaster Chief Executive Irving Azoff is also Diamond’s personal manager. Their relationship highlights just how closely intertwined the entities are within the ticket industry.

In returning to the bill’s stipulations, the two day waiting period is quite curious. There’s no real reason for a consumer to go a reseller if there are still tickets available from the primary seller. Therefore, if an event is sold out the arbitrary waiting period just delays the inevitable for 48 hours.

The registration number called for by Schumer’s bill is useless unless it identifies the artist or the promoter as the seller. Certainly the artist and the promoter will take the necessary precautions to hide their true identity.

The legislation does not apply to season ticket holders, ticket packages or tickets to entertainment series. The bill will require that hard copies of tickets be labeled with the date and time of their sale. However since “scalping” is legal, this bill does not outlaw the practice, a time stamp seems to have little consequence.

And “little consequences” seems to be the theme of Schumer’s legislation. This may explain why Ticketmaster supports the bill.

“I am very happy to support Sen. Schumer’s thoughtful proposal and leadership on this issue. [It] is a very important step in reforming the process and bringing transparency to the on-sale process,” Azoff said in a prepared statement.

In his article, Reznor calls for the ticket industry to adopt several measure which will greatly hamper, if not eliminate the secondary ticket market. He calls for limiting the amount of ticket sales per customer and printing the customers’ names on tickets. The name on the ticket would have to match their identification in order to enter the venue.

As proactive as those measures appear, the secondary ticket market will continue to be a thorn in the side of consumers, as well as Reznor’s, as long as they ignore the fact that the greediest part of the industry could be the artist.