Limiting Ticket Resales

Welcome back to Middle Ground; today’s issue will discuss how to limit ticket resales.

What is the problem?

Ticket reselling has become an enormous industry in North America, making concerts unaffordable for many. Due to the extreme surge in prices on the secondary market, this practice was brought to light during Taylor Swift’s Eras Tour. An egregious example was seen during the concert in Vancouver, where Taylor Swift sold “audio only” seats behind the stage for $16 days before the event, only to relist them for $2000+ within hours. This represents a 125x return for reselling those tickets.

While other examples of reselling are less absurd, it still remains true that many tickets purchased for the event between $200-500 were resold for $2000+ as resellers made significant profits. To a lesser extent, the same practice dominates sporting events, with the face value of some Toronto Maple Leafs tickets as low as $90 but resale prices rarely dipping below $120+, a 33% markup. 

What is the solution?

Many countries, such as Germany, have implemented laws that help to prevent ticket reselling for profit. A few of their approaches include:

1. Personalized Tickets - Tickets, when sold, are tied to someone's ID. Only that person can use the ticket and must show a valid ID when entering the venue. This prevents the tickets from being resold, as they will only work for the original purchaser. 

2. Prohibit Resale Above Face Value - The artists or sports team can request a clause in all tickets sold that prevents them from being resold above face value. This practice ensures that only fans purchase tickets, but they can still be resold if someone can’t attend an event. 

3. Limit Resale Value -  For most tickets in Germany, the two options above are not used; instead, the most lenient option is to allow the tickets to be resold but not for more than 25% above face value. This keeps a resale market active (and profitable) without making events unaffordable for those wanting to attend. 

4. Banning Bots - All ticket-buying bots are banned, meaning a person must manually complete ticket transactions. This prevents companies from purchasing and reselling large numbers of tickets to events.

Why don’t we have these regulations?

Unfortunately, there are reasons that these regulations have not been adopted in North America. 

1. Ticketmaster, StubHub, SeatGeek,  Gametime, and other resellers benefit tremendously from secondary ticket markets. This is where they can use their dynamic pricing to extract maximum value from customers. 

2. Enforcement is difficult and expensive. Even in countries with laws against reselling, it can be difficult to enforce them, especially when peer-to-peer transactions are conducted through Facebook Groups and other difficult-to-track mediums.

3. Closing loopholes can become difficult. For example, in many countries with bans on reselling, no regulations apply to selling “bundles,” so resellers purchase tickets, bundle them with hotels, merchandise, etc., and resell them at significant markups for premium events. These types of loopholes would constantly need to be monitored.

Should we limit resales?

Yes. Despite the challenges, if we want to guarantee a lower cost of living while allowing people to participate and attend events that add significant value to their lives, we need to tackle this issue. Concerts and sports events are a huge part of our communities and should not be restricted to only the rich. 

If you learned anything from this newsletter, forward it to one person who would benefit from these insights.

Liam Gill