Wednesday, August 08, 2007

More on Scraping the Scalping Laws

Why is someone who sells tickets to a Red Sox fan outside Fenway Park for a heavily inflated price called a "scalper," while someone who charges the same fan $4 for a bottle of water inside the stadium is called a "concessionaire"?

Why does anyone thinks the government should be involved in deciding how much a willing buyer can pay a willing seller for tickets to a lawful entertainment event?

We all take it for granted that if you're willing to pay for the privilege, you can stay at the best hotel, live in the best neighborhood, eat at the best restaurant, or hire the best lawyer. So what accounts for the heavy breathing when some fans pay a premium in order to see Daisuke Matsuzaka take the mound or watch David Beckham bend it with the L.A. Galaxy? Or -- this isn't only about sports -- to hear Beyoncé sing "Irreplaceable" or catch a sold-out "Wicked" on Broadway?

All told, 42 states have decided that the heavens won't collapse if people who own tickets to games and shows are free to sell them for whatever the market will bear -- as free as people who own real estate, shares of stock, Beanie Babies, or just about anything else.

~Jeff Jacoby, writing in today's Boston Globe


At 8/08/2007 4:04 PM, Blogger Joe Liberty said...

Scalpers provide a service that is only available when the venue and promoters fail to set the face value to its proper market value.

I recently did some research on this issue regarding ticket prices at the main club venue in DC for concerts. They used to have sold out shows all the time, and then people complained that scalpers got all the tickets. Now, they've raised their prices significantly for many acts that used to sell out, which people still complain about...but the scalpers don't buy tickets anymore, and enough people that feel the show is worth seeing are buying the pricer tickets, and shows are still selling out...just the day of the show, rather than as soon as they go on sale.

At 8/09/2007 6:31 AM, Blogger juandos said...

Hmmm, is Sen. Clinton going to investigate big concessionaires or big water?

At 8/09/2007 8:48 AM, Anonymous Anonymous said...

Pricing tickets closer to market value has certainly cut into the scalping trade. Technology has also made a big difference. Now that we can purchase via the web, the playing field has been leveled so that camping out overnight isn't necessary in order to get good seats.

Purely anecdotal, but a friend of mine used to operate a Ticketmaster outlet in the 80's and 90's, prior to online sales. Apparently that outlet sold lots of tickets that ended up being scalped. Whenever an event that was guaranteed to sell out went on sale, the same little group of homeless folks would set up in front of the store the night before in order to be first in line. They were on the payroll of a scalper or scalpers, and always bought the limit of the best seats they could get.

In some cases tickets would sell out before any of the customers who were actually planning to go to the event got to the front of the line.

The scalpers have a vertical supply curve to work with, and can raise the price to equilibrium, but no longer enjoy the ability to tie up as much of the supply. I would assume this loosening of restrictions can be attributed in part to their reduced ability to control supply.


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