Thursday, February 7, 2013

CP: Ticketmaster vs. StubHub Proxy War Comes to Tennessee

Posted By on Thu, Feb 7, 2013 at 10:22 AM

For a couple of years now, the giants of the ticket industry have been engaged in a fight over regulation of the sale and resale of tickets. In state legislatures in Massachusetts, New York and Florida, the two have deployed astroturf organizations to push for, or defend against, legislation they feel would be detrimental to their side of the market.

The fight has come to Tennessee, by way of the Fairness in Ticketing Act. And that's the subject of the cover story in this week's issue of The City Paper.

An excerpt:

But in Tennessee, things are headed in the other direction. The Tennessee Sports and Entertainment Industry Coalition, a 74-member group, is pushing the Fairness in Ticketing Act, a bill they claim would address many common ticket resale tactics that aren’t aboveboard. The high-powered TSEIC member list includes management agencies and artists from The Black Keys to Eric Church and Jason Aldean; venues such as Ryman Auditorium and the Orpheum Theatre in Memphis; and the state’s three major professional sports teams, the Predators, the Titans and the Memphis Grizzlies, along with their associated venues. Many among the group are Ticketmaster partners, though some are not. The Fans First Coalition, and Ticketmaster, support the legislation but have been less overtly involved in pushing it than the Fan Freedom Project has been in opposing it.

The bill was originally filed during the 2012 legislative session, but was sent to a Senate study committee, which heard testimony on the matter from both sides at a hearing in November. Sponsors Rep. Ryan Haynes (R-Knoxville) and Sen. Ken Yager (R-Harriman) filed the Senate bill on Friday. A companion in the House is expected later.

The legislation aims to distinguish between the fan who attempts to offload a ticket due to unforeseen circumstances, and the hardcore scalper. It would require ticket brokers — defined as anyone who resells more than 60 tickets in a year — to register with the state. Registration would be used to make sure such brokers pay sales and use tax on transactions, but also to require that they disclose certain information about the tickets they’re selling, such as the face value and exact location of the ticket, and whether the seller actually has the ticket in their possession.

Read the whole story here.

Members of the industry coalition say the bill is necessary to protect consumers against the deceptive practices of scalpers, including speculative sales — where scalpers offer tickets for well over face value, weeks before they actually go on sale — and the use of fraudulent websites designed to look just like that of the venue or artist selling the tickets. The other side, represented by StubHub's Fan Freedom Project, say they also oppose misleading resale tactics, but that they can be addressed by enforcing current laws.

As is the case with legislative battles over other issues — see abortion, guns, etc. — both sides believe the other is pushing legislation as an incremental step toward an ultimate goal.

The TSEIC says ticket resellers opposes the Fairness in Ticketing Act — which includes provisions codifying the definition of a ticket as a revocable license, and stating that ticket issuers can use whatever methods they choose, including paperless ticketing — because tighter regulations on scalping mean sites like StubHub make less money on the resale of tickets. The Fan Freedom Project, on the other hand, says the bill is a Trojan horse — a bill meant to damage the secondary ticket market, disguised as a consumer protection effort. For their part the Fan Freedom Project has been going state-to-state in an attempt to push things the other way, supporting legislation that would, among other things, prohibit restrictive ticketing methods such as paperless ticketing. TSEIC members say they're a tail trying to wag the dog.

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