One month before his company was sued by the state of Utah, Live Nation CEO Michael Rapino took the stage in Salt Lake City, announcing plans for a new 6,000-seat concert venue in the heart of the Smith Entertainment Group’s new downtown sports and entertainment district.
“Every 14-year-old to 94-year-old wants to go cherish a moment with some artist,” Rapino said.
But according to the lawsuit filed by the Federal Trade Commission, Utah, and six other U.S. states, Live Nation and its subsidiary Ticketmaster took advantage of the passion of music and sports fans in illegal ways for profit.
My colleague Brock Marchant had the early story on the lawsuit, which did a great job of showing you what the state is alleging here. Still, I was surprised at the depth of corporate cynicism in the alleged conduct here. And as I dug into the state of the ticketing world, the hits to the wallets of normal folks kept coming.
I also don’t really think Ticketmaster is alone here, though it is the focus of this lawsuit. Some of the same patterns of behavior are coming from competitors like StubHub and SeatGeek as well. The whole industry is this way. (Of note locally, Jazz owner Ryan Smith is an investor in SeatGeek, along with working with Ticketmaster on the aforementioned venue.)
But laws and practices in other countries show us we don’t have to live like this, and there is a brighter alternative — though it will take policy intervention, not just lawsuits.
Let me show you what I found.
More fees than you know
You know you’re charged a boatload of fees whenever you buy or sell a ticket to a sporting event or concert.
One concern of the Ticketmaster lawsuit is that those fees were generally hidden from buyers until they got to the final checkout step. Utah law prohibits businesses from deceptive acts, and Utah Attorney General Derek Brown said he believes showing a lower price up front and then adding the fees on at the end is an example of this.
The hidden fees won’t surprise anyone who’s bought a ticket recently. Nor would it surprise anyone with even a modicum of cynicism that the lawsuit says there is evidence Ticketmaster A/B tested various purchasing screens, and found revenue increased by about $50 million annually when full ticket prices were hidden until the end of the transaction.
Those fees are high, by the way. Another ticket site, Handshake Tickets, compiled seller fees across the four major companies (Ticketmaster, SeatGeek, StubHub, and Vivid Seats) and found that all four charged fees of 10-15%.
Buyer fees are harder to determine because none of the ticket sites has a clear rubric on how they’re charged. The sites charge their own fees, then venues typically add on a venue fee, and the fees sometimes get bundled up together. Heck, I’ve even heard some involved with local sports ticketing thank Ticketmaster — because it’s taking the blame for fees charged by a local arena.
Given the lack of information, the best resource I could find regarding ticket fees across the major ticketing companies was a comparison of 100 different events from 2023. Then, it was Ticketmaster that charged the lowest fees on the buyer side: 20%. (The lawsuit alleges that Ticketmaster charged fees between 24% and 44%.)
Overall, fees varied between 13.7% charged at a New Jersey Devils NHL game at the Prudential Center to 46.5% for a Shania Twain concert in Hollywood.
SeatGeek charged the highest fees in the 100-event analysis, an average of 37%. It’s worth noting that SeatGeek has traditionally been better at showing all-in pricing — though all four companies do so now because of a new FTC rule.
The cycle of profit
Those fees bring in millions of dollars on their own. What the ticket companies have figured out, though, is that they make more and more money as the tickets are repeatedly bought and resold.
After all, if Ticketmaster sells a ticket to a person going to a show, the company only gets to charge one set of fees to the buyer. If Ticketmaster sells to someone who is going to resell the ticket, the company gets to charge a buyer fee to the broker, a seller fee to the broker, and then a buyer fee to the real attendee.
I truly didn’t realize the extent to which they encourage this behavior to their own benefit.
While the numbers are scattered all over the lawsuit, the general accounting of how much money this made from 2019 to 2024 is reported to be:
• “Over $11 billion” charged to initial ticket buyers.
• $986 million charged to ticket sellers.
• $3.7 billion in fees charged to secondary market ticket buyers.
That’s a total of $16.4 billion in fees charged by Ticketmaster.
There’s also an extra $187 million in revenue that, according to the lawsuit, Ticketmaster has made in artificial markups added when it believes a seller has listed a ticket for too low a price.
Eagle-eyed mathematicians among us may note that the ticket seller fees figure there is actually lower than it should be based on the percentages above. That’s because Ticketmaster allegedly decreased fees to big-volume ticket brokers when compared to normal sellers.
Embracing bots and ticket brokers
Honestly, though, that’s just the start of the level of coordination that the lawsuit alleges is occurring between the big ticket companies and these ticket brokers.
Most concerts cap ticket purchases for you and me at somewhere between four and eight tickets. Sports limits are generally somewhat higher.
In 2018, Ticketmaster identified five of its largest ticket brokers who shared a combined 6,345 accounts. They held 246,407 tickets combined, according to the lawsuit. One broker bought over 9,000 tickets to one night of Beyoncé’s Renaissance tour. The broker also bought 8,518 tickets to one night of a Travis Scott concert. Ticketmaster’s stated limit for both shows was eight tickets per account.
I figured most of this activity was with computer programs and bots, and to be sure, that happens sometimes. But many of these purchases are allegedly from companies that pay individuals to buy tickets for them online or in person.
Take Reps & Company, the holder of the most tickets in the screenshot above. Right now, the company has a job posting available asking for a “Box Office Ticket Buyer for Salt Lake City, UT.” That person can make “up to $20+/hour” buying tickets at real-world box offices.
Reps & Company sends purchase orders through an app, then the buyer uses a Reps & Company credit card to buy the tickets in person, before sending in the ticket info online and the physical ticket back to headquarters. Buyers are paid weekly.
One Ticketmaster engineer complained about this arrangement in the Utah lawsuit.
“We have a guy that hires 1000 college kids to each buy the ticket limit of 8, giving him 8000 tickets to resell. Then we have a guy who creates 1000 ‘fake’ accounts and uses each [to] buy the ticket limit of 8, giving him 8000 tickets to resell,” the engineer wrote to an executive. “We say the former is legit and call him a ‘broker’, while the latter is breaking the rules and is a ‘scalper.’ But from the fan perspective, we end up with one guy reselling 8000 tickets!”
We have learned that there is at least one person employed at Ticketmaster with a working conscience.
Not enough executives, though.
The lawsuit alleges that, in 2020, Ticketmaster investigated the possibility of actually intervening in the above issue. It decided not to. Why? The analysis revealed that if Ticketmaster intervened, it would cost Ticketmaster annual resale ticket revenue of about $220 million.
Company officials also decided against a rule that would ban individual IP addresses from buying more than four times the ticket limit.
But again: Ticketmaster isn’t alone here.
For example, a significant portion of the lawsuit details that Ticketmaster hosts a “TradeDesk” platform where brokers can manage all the tickets they are selling. But StubHub owns “Ticket Utils.” Vivid Seats owns “Skybox”. Each has different features, but the basic idea of the functionality is the same: a program helping massive ticket brokers who skirt the rules work more easily with the platforms where the rest of us plebes can buy tickets.
Heck, on StubHub, you can even sell tickets you aren’t even currently in possession of. I’m sure that’s led to no frustrations from normal ticket buyers.
What can be done about this?
The FTC rule about ticket price transparency helps. So too does this legal action from the states and the feds.
But no one thinks that these actions are changing the basic state of the national ticket business. The worst practices may be addressed by these tactics, but it won’t realistically change the billions of dollars leaving Americans’ pockets.
So what can be done? I’d suggest looking overseas.
The Loyola Marymount University Law Review has a good 35-page roundup of the state of foreign laws on the issue, if you want to nerd out like me. But, in short, most European nations and many other countries worldwide have outright prohibitions or significant restrictions on any type of ticket scalping.
In Belgium, Denmark, Italy, Norway, Poland, and Portugal, it is illegal to resell a ticket above face value. Japan, Taiwan, and South Korea also have similar laws. In much of Australia, there is a 10% resale price cap.
Japan’s law imposes a one year prison sentence and/or a fine up to 1 million yen if someone is caught selling tickets. In France, if an unauthorized resaler is caught, the fine is €15,000 for a first-time offense and €30,000 for a repeated offense. In Ireland, the penalty for reselling a ticket for profit is up to €100,000 or up to two years in prison.
These laws haven’t totally eliminated ticket scalping in these countries, to be sure. But they have prevented brokering on the size and scale we see in the United States, as companies have to be concerned about participating in illegal schemes.
What happens instead? Take my recent experience buying tickets to a Tottenham Hotspur soccer match in London: Fans looking to buy tickets must join a team-run fan club, which gives them the ability to participate in initial ticket sales. If those sell out, tickets can be bought and sold for face value only in the team-run resale market. It can be a multi-step process with some frustration — but the typical result is that more tickets are directly sold to real fans at face value, not exorbitant prices.
I think a lot of American politicians are reluctant to put limitations on the “free market” trade of tickets in the European way, and hey, I get that. We’re intentionally different.
But if there’s anything that’s clear here, it’s that the market isn’t actually free — instead, it’s being run by an arrangement between deceptive businesses like Ticketmaster and rule-breaking brokers who get special treatment.
Americans, when polled, vastly support various anti-ticket broker actions. They support breaking up the Ticketmaster and Live Nation merger by a 60-19 margin, for example. Rapino, the Live Nation CEO, would likely stand against that measure — but he does, remarkably, support an Australia-esque 20% cap on resale price increases.
The TICKET Act, currently languishing in the Senate, doesn’t do much. It does enact all-in pricing, and asks ticket sellers to inform the public how many tickets are going to be actually sold in any sale (removing those held for sponsors and the like). But it won’t change the fundamental exploitative nature of this industry at the moment.
More needs to be done to ensure that 14-year-olds to 94-year-olds of all stripes can enjoy events — not just the richest and most unscrupulous among us.