Bill opposed by Ticketmaster aims to make event tickets freely transferable in Maryland
Monday, February 27, 2017
February 27, 2017 - Baltimore Sun --
State lawmakers will begin hearings this week on legislation that would prohibit companies from restricting the resale of tickets for entertainment and sporting events.
The proposed legislation has entertainment giant Ticketmaster on the defensive against competitors such as ticket resale website StubHub.
Both sides claim to be looking out for the consumer. Supporters of the bill say they are defending the rights of ticket buyers to sell or give away their own property. Ticketmaster and its allies, including concert venues, say they want to protect fans from scalpers who snap up tickets with high-tech ticket-buying bots.
The clash will come to a head Wednesday, when the legislation gets its first hearing before a Senate committee.
Under current law, the primary seller of tickets — Ticketmaster, in many cases — can impose restrictions on reselling or giving away tickets.
Ticketmaster allows some tickets to be resold, but only through a secondary market owned by the company. For other events, tickets can be redeemed at venues only by showing the buyer's credit card or some other identification, making it impossible to freely sell or give away those tickets.
Sen. Brian Feldman, the bill's Senate sponsor, said buyers face too many restrictions when they purchase tickets.
"Most Marylanders, I believe, think they have a property right to that ticket and they have the ... freedom to transfer that ticket if they can't make the event," the Montgomery County Democrat said.
In fact, Marylanders do not have such a right, as Sky Schaefer of Middle River can attest.
Schaefer, 38, is a huge fan of electronic dance music, especially the artist known as Marshmello. So he didn't mind shelling out $150 for a ticket to the Moonrise Festival at Pimlico Race Course, where the artist who performs wearing a marshmallow head was a headliner.
But then Schaefer learned he had to work the night of the festival — and found himself stuck with a ticket in his name that he couldn't sell or give away.
"I had to just eat the cost," Schaefer said.
Proponents have been trying to enact legislation to lift restrictions on ticket resales for the last several years. Maryland lawmakers who favor the change believe they have new momentum because the Virginia General Assembly passed a similar bill this year.
Feldman said the Maryland legislation would force a seller such as Ticketmaster to offer nonrestricted tickets to events for which they sell restricted tickets. That would let buyers resell tickets on such outlets as StubHub.
"Why should Ticketmaster have a monopoly?" Feldman asked. "It's anti-American."
House Majority Leader Bill Frick said he agreed to sponsor the House version of the bill after being approached by the Maryland Consumer Rights Center.
"Technology is changing the ticket and event experience, and it can either change it to empower consumers or restrict rights most of us take for granted," the Montgomery County Democrat said.
The Virginia bill had bipartisan support, and the Maryland bill does, as well.
"I don't think you should have to pay a fee to transfer a ticket," said Senate Minority Leader J. B. Jennings, who represents Baltimore and Harford counties.
Ticketmaster said the legislation would open the door to scalping.
Robert Wernick, vice president and senior counsel at Ticketmaster, said ticket restrictions are one strategy his company uses to thwart bots — the computer programs scalpers use to swoop down on a popular event when sales open and buy up hundreds of tickets to resell at a markup.
"We are working tirelessly to combat bots," Wernick said. "It's an arms race."
One of the last bills signed by President Barack Obama created a federal prohibition on the use of bots to amass hoards of tickets. It's a reason proponents of the Maryland legislation say Ticketmaster's case is no longer valid.
Wernick said his company welcomes the new federal law, but its effectiveness is unproven.
Wernick said most tickets to major events are transferable. Those that aren't, he said, represent a "small subset" of transactions.
Most tickets issued by Ticketmaster can be resold on the company's secondary exchange with no limit on the price, Wernick said, for a fee of about 10 percent.
Joining Ticketmaster in opposing the legislation are operators of performance venues.
Ron Legler, president of the Hippodrome Performing Arts Center in Baltimore, plans to testify against the legislation. He said he doesn't understand how anyone could consider the bill consumer protection.
He said the Hippodrome takes 100 percent of the risk on any show it stages, and it should have control over how it sells its tickets. Its choice is to use Ticketmaster.
"If we decide Ticketmaster's the official way to sell our tickets, that's the way the world works," Legler said. "Why is some other secondary entity coming in and telling us how to operate and sell our tickets when they don't do it to the airlines?"
Airline tickets are generally not transferable for security reasons, and Legler said entertainment venues have similar concerns. He said a theater might want to notify ticket holders if it is closing because of civil unrest, for example, or a snowstorm.
Audrey Schaefer, spokeswoman for Merriweather Post Pavilion in Columbia, said the problem of tickets issued in a single person's name is exaggerated.
"Anytime a ticket is sold that has that special requirement for a name on it, the consumer is always alerted ahead of time and they know that coming in," she said.
Schaefer, whose employer uses Ticketmaster competitor Ticketfly.com, said some artists insist on selling nontransferable tickets for their concerts because they don't want scalpers driving up costs for their fans.
"If Maryland decides to do that, they're saying: 'Big Artist, go play D.C., go play Philadelphia,'" she said.
The Baltimore Ravens, Meyerhoff Symphony Hall and Royal Farms Arena also oppose the bill.
Robert Lande, a law professor at the University of Baltimore who specializes in antitrust law, supports the bill. He noted that Ticketmaster was allowed to merge with Ticketron in 1991 and then was acquired in 2009 by Live Nation, a leading concert promoter and owner of entertainment venues.
The legislation being considered in Maryland could create some competition.
"I believe that no significant competitor to Ticketmaster has emerged," Lane said. "They're pretty darn close to a monopoly over large venues."
An earlier version misstated the name of the Moonrise Festival. The Sun regrets the error.