Let's start with the basics. A ticket is generally a bearer coupon which allows a person admission to a particular event as stated upon the coupon. I say "bearer" as opposed to "registered", as a ticket is not generally registered to a specific owner; rather, any person who possesses the ticket may use it. If the user is not the original buyer, the original buyer would have sold or given the ticket to another person, which, although some small events discourage transactions of any kind, is generally allowed for all bearer tickets and registered tickets. The bearer then possesses all the rights of the original buyer, therefore, a ticket functions more as a "bearer" coupon than a restricted license, as any holder of the ticket can gain admittance (assuming of course they exhibit good behavior and acceptable appearance), unlike a license such as a hunting, fishing or drivers license which cannot be used by anyone other than the original person it was issued to.

The exception to the bearer rule would be when the bearer was trying to use a ticket which was originally reported as lost or stolen; chances are that it would be reported to the authorized ticketing agent, and would be cancelled by such agent. In many instances, upon theft or loss, the authorized ticketing agent may authorize the original buyer to gain admission to the event by way of a voucher issued at the box office on the day of the event in their name only (box offices are not always so helpful as a rule, but it depends on the circumstances on a case-by-case basis). The buyer generally has to present proof of purchase, and a copy of the original ticket is most helpful to proof ownership (most individuals don't photocopy their tickets, though virtually all ticket brokers do), and present a valid I.D. at the box office on the day of the event to receive the voucher. Anyone knowingly in possession of a lost or stolen ticket would be quite dumb to actually use it to sit in those seats in such cases.

Note that most all bearer tickets state a disclaimer on the reverse side which states that they are not subject to replacement if lost, stolen, mutilated, destroyed or otherwise rendered unusable. What does unusable mean? Leave a ticket in a hot car in the sun and see what happens to it. Many tickets will turn irreversibly black after exposure to sunlight, and according to the statement on the reverse of most tickets, the authorized ticketing agent has no obligation to replace it, though it's well known that many box offices will attempt to help you replace it if you have evidence of purchase directly from them. This would be one of the few advantages to purchasing from the box office, that and the price is usually cheaper, but that's about the extent of the advantages of using the venue's box office or the "authorized" ticketing agent.

Bet you never thought that much about a ticket, eh? This gets deeper - stay with me . . .
 

WHAT IS AN "AUTHORIZED" TICKET AGENT?

A ticketing agency is contracted by the promoter (generally through the venue) to sell tickets on behalf of the event promoters. They are sometimes (mistakenly) referred to as the "B.O." or "box office". Each venue has a contract with a ticketing agency to provide ticketing and some advertising, and the venue must use that ticketing agency for all events at that venue. This "authorized" ticketing agent is contracted to sell and distribute tickets for the event to the general public on behalf of the promoter and the venue. They include agencies like Ticketmaster, which is the largest by far. These agents will sell you a ticket in compliance with the promoter's guidelines and in accordance with their own guidelines at the price as stated on the ticket, plus a fee which may or may not be stated as well. In the case of concert tickets, the fee is generally stated on the ticket, and varies from no fee (in the case of tickets purchased at the venue box office), to a fee of 5% to as much as 25% or more of the face price, with an average of around 10-15%. In the case of mail or phone orders, other fees may apply. It's these "other fees" that somehow seem to bother some buyers who get upset at paying even $1 more than the face price. That issue is covered later in this article.

When you purchase tickets at the box office at the venue where the event will be held, you generally avoid paying a ticketing fee; you pay only the price listed on the ticket, though sometimes a venue fee or parking fee (usually $1-$2) is added to all tickets regardless of where purchased, and that amount is generally listed on the ticket. The venue box office agents, although not employees of the authorized ticketing agent (e.g., Ticketmaster, Next, etc.), will execute the order on a computer which is linked with the authorized ticketing agent. This is done to keep track of all sales, but no convenience fee is added to the ticket price. So generally, when you say "box office" or "(authorized ticketing agent's name)", you are generally referring to one and the same, but they in fact are two different entities.

The venue is the place where the event will be held (e.g., Madison Square Garden, Georgia Dome, etc.). A "promoter" rents the venue, and the venue provides the space to hold the event and provides certain other services as part of the venue's services, such as event security, staging, police and fire protection, parking, ticketing (and concessions which the venue usually retains), among other necessary items/services.

A promoter is either an independent company that engages in the business of staging concerts and events, or works for the artist or event itself as an employee. It is the person or company in charge of running the event, or it is the financier of the event. If the promoter works its own account, it accepts the entire financial risk and reaps the benefits or losses thereof. This is the case with independent promoters. They hire a performer/artist under contract, then arrange for the advertising of the event and are the ones in charge of the event itself. Under an independent promoter's deal with an artist; they keep a portion of the profit (name-brand artists generally get 85-90% of all profit over the expenses after a "promoters profit percentage" is deducted), and in return the promoter will assume the entire financial risk of the event. In many cases, an artist (like Garth Brooks or Prince) self-promotes their own tour, and the acting promoter is nothing more than an employee of the artist's own promotion company, and sometimes the promotion is contracted out to an independent promoter who will promote the event for a fee with no financial risk. Many large mega-rock tours, and lately a number of large country acts, are underwritten in whole or in part by a corporate sponsor who will guarantee a set dollar amount to an artist, and sometimes an additional percentage of the profits. These are all points which are negotiable between them.

In the case of sporting events, the promoter would be considered to be home team, though in the case of special sporting events, it is usually an organization; i.e., the Southeastern Conference (SEC) is the promoter of the SEC Football Championship in Atlanta each year.

Looking at the chain of command, you see that the venue is rented by the promoter, the promoter hires the artist, the venue will sell tickets through its own box office, but the bulk of sales will be made through the authorized ticketing agent, which is contracted by the venue to help with ticket sales and distribution for all the venue's events. If the artist gets a set fee, and they plan on selling out the show almost regardless of the face price of the ticket, it's incredibly naive to believe that they actually care whether a fan gets a ticket or not. Likewise, they are pretty stupid to offer their services for below market value.

Most all major colleges charge extra fees in addition to the face price of the ticket, and these fees are NEVER stated on the face of the ticket, and the schools don't want them there. Some schools call them "booster" fees or "scholarship plans" or "funding" fees, and they are required to be paid in addition to the face price in order to receive season tickets, especially the best games. As an example, one SEC. school charges its season ticket holders (who receive the best tickets, although many latecomers to the list get end zones) a fee commensurate with the location of the seating (sounds like ticket brokering, eh?), and the more you are willing to pay, the better the seats. They have a basic level program where you can buy from 2 to 10 season tickets for face price plus an additional fee of anywhere from $150 per season ticket (a season ticket is 1 ticket for the same seat for each home game that season) to as little as $75 per season ticket if you buy the maximum. Or, you can step up the "mandatory voluntary" donation and get 2 to 4 really good tickets under the "scholarship plan" of $1,250 per season ticket. You pay these fees PLUS the face price of each ticket, which in the case of the scholarship ticket plan for a school with 6 home games this season would be $22 x 6 = $132 + $1250 = $1382 per season ticket, or $230.33 per single game ticket! And some people get uptight over paying twice the face price!

These charges are real, and they must be paid; however, unlike concert tickets, where the extra fees are generally listed, these fees are not listed on the tickets. They charge a hefty premium, yet, if you want to sell off a few of the games that you don't plan to attend, they get hopping mad when you try to sell them for the amount you invested in them, as they don't want you to sell them for any amount higher than the face price. In fact, it would be against the laws of some nearsighted states to only try and get your investment back! This is absolutely ludicrous. I believe that if the face price is forced to be listed, then the other costs of obtaining the tickets should be listed on the face of the tickets as well, therefore, persons who wish to recoup their investment will be not saddled with the prospect of breaking these inane (and unconstitutional --- I'll discuss that later) state "scalpers' laws" in order to get their investment back. This is, of course, short of doing away with these ridiculous, antiquated laws altogether.
 

WHAT IS A "TICKET BROKER"?

Unlike "authorized" ticket agents who work for the venue and/or the promoter, a ticket broker is an independent agency that is not affiliated with the artist, venue or the promoter, and it not endorsed by any of them, but although that may mean technically that they are "unauthorized", that should carry no weight with you, as it doesn't affect the ability for you to use a ticket purchased from a broker, though the aforementioned 3 would like you to think so. If you buy a used GM car from a used car lot, you are buying from an unauthorized seller, but it doesn't mean the car doesn't work or that you will not be allowed to drive it. In fact, you can take it to the local authorized dealer to get it fixed if you want. This is not unlike the relationship of "authorized" & "unauthorized" ticket agents (brokers), i.e., the "authorization" doesn't amount to much at all . . .

The box office wants you to believe that you can be 100% sure that by purchasing through the box office, you know that you will have a legitimate ticket, and that doing otherwise is disastrous. This is not only a complete misnomer, it's a blatant and incredulous attempt to use the public's fear and ignorance to their advantage. Unfortunately, with all the years of ignorance and myth impounded into the public's mindset, it works. They want you to believe that ticket brokers are selling bad goods, and that you are taking a tremendous risk purchasing from them because you have no recourse, but that is not true. Virtually 99.9% of all ticket brokers accept credit cards, and that is the best form of protection you can have. Any ticket broker who accepts credit cards understands that if the customer is defrauded that the sale can be contested and the broker will lose not only the sale but his investment as well. The box office tries to put forth the impression that brokers are shady characters who deal with unsavory types who provide them with tickets from a questionable source in a fraudulent manner, and this also couldn't be any further from the truth. They want you to believe that all ticket brokers bribe box office employees to provide them with tickets, but this is much more myth than truth. The real evidence of this in the past has been and still is very, very limited, as ticket brokers generally employ others to obtain them in the same manner that an individual buys tickets, either in line or on the phones. They have actually caught one broker doing this in the past and they look at that person and say "AH, HA! So this is how you ticket brokers obtain those excellent tickets!", but that is ridiculous at best. You couldn't base the actions of all ticket brokers on the actions of the 1 or 2 that are unscrupulous no more than you could judge Catholic priests based on the action of the small minority who have been found guilty of sex crimes involving minors, and not to cast aspersions toward Catholicism or any religion, but that latter number is significantly higher.

A ticket broker is part of the secondary market for tickets, but to say that they are only "resellers" is like saying that Michael Jordan just "played a little basketball". A normal regional or national retail broker carries a large inventory of tickets, sometimes with a value way into 6 figures, with a wide selection of concert, sporting events, theater & special events tickets, generally offering all types of seating, but concentrating primarily on the best seats in the house. And what they don't have, they can get from the network of brokers worldwide that they do business with on a regular basis. They sometimes carry a wide selection of seating options for certain events to accommodate all budgets. Also, a ticket broker provides seating charts and timely info far in advance of upcoming events and purchasing in advance of actual ticket availability (which promoters and authorized ticketing agents such as Ticketmaster are not willing or able to readily provide), and some may help you with your travel and/or accommodations needs, either as part of the ticket price or for an additional fee. Also, ticket brokers allow you to pay with any major credit card and a few may provide an overnight C.O.D. option, usually for an additional fee (Shipping is generally always a separate charge in addition to the ticket charge, as it is with the box office agencies), and they also provide toll-free numbers, which Ticketmaster has slowly departed from altogether. Most of the established ticket brokers can get you tickets for events they don't carry in their own inventory by contacting other brokers located in the area of the event who make a market in those tickets.

There are a number of ticket brokers who like to call themselves "sports tour agents". They are usually travel agents who are also ticket brokers, or vice versa, and they specialize in selling tour packages for a particular sporting event, such as the Super Bowl. They provide hotels, flights (commercial & chartered), rental cars & charter buses, hospitality parties, meals, event tickets, and much more with their packages. Because of the nature of their business, they can and do operate in all 50 states and are not corralled by the state's "scalpers laws", as those laws do not appear to apply to ticket sales that are part of a "package". What is a package? It's a gray area indeed, and it appears to be whatever the law says it is, if it does in fact say so at all. That could mean any service or item given along with the tickets themselves that has value. The state comes up with these ridiculous laws, so what did you expect anyway? The travel agents nationwide are much more organized and don't suffer the stigma that ticket brokers endure, so they were apparently exempted from the "scalpers laws" by the "package" sales, so the ticket brokers use this to compete with them as they should and conduct their regular business of ticket brokering.

I should also mention that there are some very good brokers who specialize mainly in tickets for only one particular team or sport. These brokers are not necessarily small; some have 6-figure inventories, and that is by no means a small inventory. They will generally execute your orders just as well as a large broker; though they usually have a smaller company and/or their business is much more focused locally, it could be said that this works to the buyer's advantage, as a lower overhead usually means lower prices and a greater flexibility in bargaining.

Also, "tix" is the abbreviation for tickets. If you'll notice the phone numbers of many brokers, they have the number sequence "849" or "8499" in them, which are the numbers that spell "TIX" & "TIXX" respectively; i.e., 555-8499 is 555-TIXX.
 

WHAT IS A "SCALPER"?

Ticket brokers do not like that word, as it seems to imply that someone is being hurt or taken advantage of in a transaction. It's unfortunate that this word is used in a transaction involving 2 consenting parties who negotiate in good faith for the betterment of each other (broker gets money, buyer gets desired tickets), but the word has been in common usage for so long that some states even list on their business licenses the occupational name of "Ticket Scalper". This is akin to calling a police officer a "pig", or a doctor a "sawbones", and this term will soon go the way of ethnic slurs and the like, as more people are becoming familiar with the business of ticket brokering and its positive effects on the secondary ticket market. Some people say that a scalper is a person who sells tickets in front of a venue just before the start of the event. Once again, this is a term that doesn't apply here, as many individuals and ticket brokers can be found selling tickets in this manner, usually for much less than the price sold for only days earlier, and sometimes for below the face price. For a sold out event, this is a blessing for fans who have no tickets or tickets with poor seating locations.

How did ticket brokers come to be known by this name? The root of the word derives from "scalp", in its verb form, one of its definitions is to buy and sell to make small quick profits.  This was supposedly attached to a variety of resold commodities, e.g., "scalp stocks & bonds", "scalp grain", "scalp horses", etc.   Where it degenerated to mean only the act of reselling a ticket goes as far back as the late 1800s, when boxing events and baseball became very popular in America.

If you substitute the word "ticket" for "real estate", "stock", "antique", "jewelry", and most any other commodity or service, everyone would be guilty of scalping. The fact that you sell a ticket should not be of any more consequence than selling a tire or a lawnmower, or on a more serious and regulated level, no different than selling real estate or cars or anything else of speculative value.

For the record, an agency that sells tickets by telephone from their offices should be called "ticket brokers". If they sell travel or tours, they may call themselves "sports tour agents". If they sell in the street prior to an event, they could be called "street vendors" or, as the brokers call them, "ticket hustlers". If you do not sell tickets professionally, you are called a "straight". If you stand in line or otherwise hunt or buy tickets for resale to or on behalf of a broker, you are a "digger". If you sell tickets for well below what they are worth, you are referred to as an "idiot".
 

WHAT ARE "SCALPING LAWS"?

These are laws enacted by a few states and a number of municipalities (there are no Federal laws directly governing ticket resales) which prohibit the reselling of admission tickets for an amount in excess of the face price. Some states which have these laws allow a small premium to be charged, usually no more than $3 by a reseller, though they generally allow "authorized" ticket agents to charge whatever they want. These laws in these states are generally called "scalping laws", and the offenders are called "scalpers".

How many states have these laws? My current, unofficial totals are 14 states that either disallow sales above face price or allow a very small surcharge, such as $3 or so over face price, and they are Arkansas, Connecticut, Florida, Georgia, Kentucky, Louisiana, Massachusetts, Michigan, Minnesota, Missouri, New York, North Carolina, Pennsylvania, and Rhode Island.  In addition to those state, New Mexico disallows it only on college athletic events, and Mississippi and disallows it for college athletic events and on the grounds of state-owned property, which covers a lot of the state's venues.  Illinois allows it provided you are a licensed broker, which basically means you have to buy a business license stating that. but actually ALL states have this requirement; they just don't enforce it as heavily as Illinois.  There are some cities which have municipal regulations against ticket brokering even though their state allows it, and these local laws apparently supersede state law.  Las Vegas is one of these cities.  

Therefore, unofficially, it appears that the other 34 states do allow ticket brokering.  Most require purchasing a state and/or a local license to operate; some have a few minor restrictions in regards to on-site reselling at a venue such as a "set-back" law where you have to stand 1,000 feet away from the venue, etc., and some have one or more municipalities that completely outlaw it.

Why were these laws created in the first place? Part of the reasoning is, the origination of the idea came from a collusion of concert promoters and politicians, the latter of which who used the issue to political advantage only, and from sports teams themselves, who hated the fact that they were not getting any of the profit on the secondary market. Promoters deal so much with artists and businesses who extract a royalty on the goods or services they tout (incidentally, "touts" & "touting" are the words the British use for ticket brokers & brokering), and so promoters felt that the tickets were somehow their own patented creation (this argument is covered later) and they felt that they should have control even after they sold that control to a buyer. Being that people prefer to pay less than more, it's easy to see how they both promoters and politicians would use that motivation to get these laws enacted. The argument that promoters don't want secondary market ticket sales because it detracts from primary ticket sales is ridiculous. People who will buy the cheap seats will not pay a premium for the best seats, and premium buyers will usually not sit in the cheap seats, even for free. And if an event is not a good seller, most likely, brokers will buy very few seats, choosing to buy only a few of the choice seats, if they bother to buy tickets for that event at all. In such case, if the event is a poor selling event, the promoter should be happy that anybody is purchasing tickets, for this may keep the promoter out of the red. But some promoters feel that they lose money by allowing people to resell tickets near the venue. This is because, and it happens quite often, that the market price in the street may fall so low due to public apathy, or an abundance of supply and little demand. When this happens, a ticket with a face price of as much as $100 may sell for as little as $5 or $10. Some concerts with face prices of $25 to $75 may also sell for low fractions of the face price, even $1 or $2 each. In this case, no one would be foolish enough to pay full face price at the box office, and so it's easy to see the promoters point. But quashing free-enterprise isn't the answer, nor should it be legal in America. It is also not good for consumers. Some may say that the promoter wouldn't have sold its tickets anyway, but that's unlikely. If a patron went so far as to come to the venue, they would have paid the box office price if no other option existed. But it is the job of the promoter to compete rather than destroy competition in such an un-American way as support he enactment of laws which are a slap in the face to free-enterprise.

It's funny to see how the face price means nothing when the market prices are fractions of the face price and it's a buyer's market, but when it's a seller's market, it turns into a problem for the unenlightened. In order for a true democracy to work and for a true free-enterprise system to work, both buyers and sellers have to have equal access to the system, and an equal opportunity to avail themselves to the possible windfalls, and therefore, when one person receives a profit in a transaction, the other person in the transaction is paying for that profit.

Politicians, in order to garner voter support, always seem to be on the prowl trying to propose some sort of ticket law or defeat a pro-brokering bill in the name of consumer protection, under the misguided theory that brokers were buying up a sizable majority of the choice seats and extracting what they deemed an "unreasonable" premium in exchange. This was an actual published quote from the Attorney General of Connecticut, which included a statement that brokers controlled a "black market" with a stranglehold on consumers?!? The reason it's a black market in Connecticut is only because of the unconstitutional law against brokering in that state! Once you have a handle on the figures, (which I present later in this article) it's easy to see the statement about cornering the market is false, but even if that were true, consider that many businesses control a sizable portion of their market, if not a total local monopoly in some instances. A case in point is another segment of the entertainment industry --- Movie Theaters. Theaters in many towns are all owned by one company, yet they are not regulated or prohibited from engaging in their quest for profit; rather, the market dictates their pricing scheme. And it works quite well, too. The sure-fire way of creating high prices and monopolies in a market segment is to outlaw it. Remove the prohibition, and overnight there's plenty of healthy competition, usually accompanied by a general overall drop in prices. Prohibition in the 1920s and early 1930s was the major springboard that gave rise to gangsters and the mob. The consequences of that action and the remnants thereof still prey upon our society today. Prohibiting anything that people need or want will produce a black market to meet that demand.

Registering of ticket brokers and issuing guidelines for fair competition instead of prohibiting brokering virtually eliminates the problems of ticket brokering, e.g., purchasing counterfeit or stolen tickets, not receiving the tickets requested, knowing the person you are dealing with and where you can find them, full disclosure, etc. One proposal would be to require all brokers to register with the state, purchase a license in an amount which keeps the fly by night operators out but is still reasonable for local brokers, set up guidelines to operate under which are fair to brokers and consumers including rules for full disclosure of the seller, the company and place of business, the total price paid and seat location, and in the case of outside sales on the day of the event, brokers should be required to wear or be able to present a photo I.D. with the state license number, as well as requiring evidence of a reasonable fidelity bond to be posted. This is similar to the regulations for real estate agents and the like.

Ever stopped to think about the solid fact that in every state that has a law prohibiting brokering of tickets over face price, NO state has deemed it illegal BUY for more than face price, only to sell them for more! With virtually every real crime against society in which a person engages in an act which is entirely prohibited and no licensing is issued to anyone, both participants are in violation of the law (e.g., prostitution, gambling, etc.). But that's not the case with ticket brokering. That's proof enough that this is an outmoded law which must be removed forever from the books of all states.

Another valid argument is that these states that outlaw brokering make it crime not to sell a ticket, rather, it is a crime to sell them for above face price. It's easy to see that the crime is not the transfer of tickets, but the act of profiting from the transfer. Obviously, that's in violation of every state's constitution, which basically says that the Government will not interfere with each person's right to engage in business in a commodity which is sanctioned by the state and offers no risk to public safety. This is the centerpiece of the attack against the law.

Could you imagine IBM or another public company telling the New York Stock Exchange what to do with their stock after it is sold to the public? Incidentally, most stock carries a par value (face value) of 1 cent! If you apply the ticket laws of some nearsighted states to the financial markets, the world's economic systems would collapse overnight. Can you imagine a situation where the person or company from whom you bought your house or car told you that you couldn't resell either of them without their consent? This argument is made from the standpoint that a ticket is an asset because it is an unregistered bearer right to attend an event (meaning it is not registered in a person's name, therefore it belongs to the bearer of it) which is sold to a buyer for a consideration (usually cash), just as many stocks and bonds are sold as unregistered bearer instruments. It would also seem that registering a ticket should not diminish the right if you equate them with stocks and bonds, as most stocks and bonds are in fact registered with the issuing company so that they'll know who to pay the dividends or interest to, but their transferability is unaffected.

Could you imagine a law which required people to post a sign on their real property which states how much they paid for it, and make it a crime to sell it for more than that, no matter how much money you put into the cost of maintaining and reselling it. Now wouldn't that be a hoot?

Within the last few years, the Georgia Legislature has passed bills allowing ticket brokering by an overwhelming margin. Each time they went to former Governor, he refused to sign them. So much for common sense in Georgia. But then again, this is the same state that had chain gangs up until the middle of this century, and still has laws against sodomy and same-sex marriages, not that I'm for either one but these are progressive ideas that the rest of the nation has caught onto, and if you can find another state that fits this bill, you've got a short list of places to film "Deliverance II".
 

WHAT SERVICES DO TICKET BROKERS PROVIDE, AND ARE THEY NECESSARY TO THE PUBLIC?

Despite some opinions, ticket brokers provide many necessary and helpful functions in the secondary ticket market. For starters, Ticket Brokers provide a large inventory selection, payment options, and seating charts.  If you are willing to pay the market price, you can sit almost anywhere you want.  "Sold Out" means nothing to a broker, as they usually have access to a large amount of available seating on the secondary market.  Many brokers also double as travel agents and can book your flight, hotel, rental car, and help with tour planning, and other intangibles such as liquidity for those who wish to sell or trade their tickets (which authorized ticketing agents do not provide), and some even provide a refund option, though some may charge either a restocking fee or offer refunds only to their best customers. Most all major brokers provide a free, updated event calendar which is always better than the ones offered by the authorized ticketing agents, as it's usually always much more accurate, timely and comprehensive.

Most importantly, ticket brokers provide options in a free-market environment.  Just like any other commodity, if you're willing to pay the market price, you get just about get whatever you want!
 

Go to page 3

Back to the home page
 

This web page and its entire contents (c) 1996 TIXFAQ. All rights reserved.