Will Ticket Scalpers Meet the Same Fate as Spinal Tap Drummers? The Sale and Resale of Concert and Sports Tickets
55 Pages Posted: 21 Feb 2014 Last revised: 10 Feb 2015
Date Written: February 19, 2014
When a concert or sporting event sells out, the performer appears popular and the venue enjoys the opportunity to maximize profits from the sale of parking, merchandise, food, and beverages. For these and other reasons, event sponsors often underprice tickets. This underpricing creates commercial opportunities for ticket resellers, who purchase in bulk at the lower price and resell the tickets at a profit, and also for intermediaries such as StubHub. Legal and technological efforts to squelch ticket resales have largely failed, leaving the secondary ticket market stronger than ever.
This secondary ticket market is economically efficient, but it also creates winners and losers. Ticket resales irritate artists, who believe that greedy scalpers are profiting from the artists’ talent, and also trouble some fans, who resent the increasingly astronomical prices of resold tickets. Secondary purchasers, by contrast, benefit by obtaining tickets to events they might otherwise have missed. Legislatures have begun to join the discussion, though some recent bills have failed in the face of intense industry lobbying. These legislative proposals assume that consumers need protection without always recognizing that rules that protect some consumers may harm others.
This Article examines the transferability of event tickets. It attempts to answer several questions: What are the economics of the market in ticket sales and resales? What, exactly, is a “ticket”? What property and contract rights does the initial ticket holder acquire? Does the initial ticket holder have the legal power to transfer these rights to someone else? To what extent can the initial ticket seller limit that transferability? Does it matter whether the initial purchaser planned to sell at a profit all along? If there is a profit to be made, who is entitled to keep the resale premium?
Keywords: Concert and Sports Tickets, Licenses as Property, Licenses as Contracts, Government Regulation
JEL Classification: A12, D10, D18, D40, D45, K11, K12, K21, L11, L82, L83
Suggested Citation: Suggested Citation