So what does the face price mean? Simply put, if the promoter or the authorized ticketing agent will not refund the ticket unless the event is cancelled, and there's virtually no chance of a cancellation of a particular event, the face price means absolutely nothing. Nada. Consider this: The face price only comes into play when the promoter of an event offers refunds on cancelled events, so it's safe to say that the face price means absolutely nothing unless cancellation of the event is a viable option. Of course, The Super Bowl is virtually cancel-free (it would probably be played during a nuclear holocaust!), so since there is no real possibility of a cancellation, the face price on Super Bowl tickets means absolutely nothing. The only price that counts would be the secondary market price, which is considerably higher than the face price in most cases, and sometimes lower. The same can be said with virtually all major sporting events and most all concerts by major artists.

Tickets are probably the only retail item we purchase which place the original purchase price indelibly on the item. It makes no sense that this practice is done, other than to price-fix the item and create laws which are anti free-enterprise and unconstitutional. The ticketing agents keep records of every transaction, so there's no need to print it on the face of the ticket. It's also funny that some people object to paying MORE than face price for tickets, but have no problem with paying LESS than face price. There are many cases where you can go to an event and find ticket hustlers standing out front offering tickets with a face price of $50 or more for as little as $5 or $10. If the face price truly meant anything to these people, they would object to this, but they sure don't!

Here's an interesting note: Audio recordings which are classified as out-of-print and are sought after by collectors --- These recordings can fetch many times their original price in the secondary marketplace, yet, no record company, record store or artist has ever been successful at collecting royalties or halting the secondary market sales of such recordings. The same can be applied to U.S. coins & stamps, and vehicles. Why wouldn't GM or Ford be upset that used car dealers with no affiliation with them would offer vehicles created and originally sold by them, with their company logo plastered all over them? They hold significant rights in regards to these vehicles, but they can do nothing about secondary market sales.


HOW ARE TICKET PRICES ON THE SECONDARY MARKET SET, AND WHY ARE THEY SOMETIMES PRICED SO HIGH?

A simple answer would be to say that if there is a person or a company willing to pay, say $150 per ticket for 4 football tickets, and a broker only has 4 left, then what you've got here is basically a private auction. If you want those same tickets and are willing to pay more than the highest bidder, you'll get them. But if you're not willing to top the highest offer, then why on God's green earth should you expect the seller to let you have them? That's one way offering prices are determined; in this case, a "direct sale" method.

Under an "average/mean or median sale" method, a broker may have bought 50 tickets, of which he has sold 20 very quickly for an average or maybe a median price of $150 each. Since this appears to be the mean or median, he may expect by recent past results that this price will hold and that the average or median sale will continue to be $150. This average/median may rise or fall depending on a number of factors such as time value; the closer to an event, generally, the lower the price will be. There is an overriding factor here --- the supply vs. demand factor. But generally, even if there is a large supply, if the demand is also large, brokers will generally get a higher premium because many people buy on impulse or are literally "sold" on the broker upon their inquiry call, therefore, they don't compare prices; they buy "on the spot". It is usually the demand factor, not the supply, that will drive price levels higher or lower, as sometimes demand is so strong that a broker will be able to sell its entire inventory and any other tickets to a particular event that they can get their hands on.

A broker may also use a "past performance history" of sales for a certain event or like/kind event to set initial prices, and may keep prices up even if initial sales are low, anticipating a strong demand at a later date. Supply will generally enter into the equation, but it's usually the broker's own supply, not the market supply in general, that may determine prices. If a broker has a large inventory, the broker may reduce prices and make it up in volume. If the broker has only a handful left, he may decide to hold out and get top dollar for the last few remaining tickets in hand.

Some brokers may not have purchased a certain ticket which is asked for by a customer, or they may have run out of that particular event. Rather than lose a potential sale, he may quote prices based on other brokers' prices with a mark-up beyond that for profit. If you, as a buyer, are shopping the marketplace and have access to numbers from lots of brokers who are making a market in a particular ticket, this is not a problem, as you can just call someone else. But if you don't know where to go or who to trust, this could be a blessing for you. Either way, do not assume it to be a rip-off if a broker quotes a marked up ticket from someone else's inventory; the brokers who have those tickets encourage other brokers to advertise and fill orders with their tickets, and you may not be aware of other ticket brokers outside of your area, or you may not trust another broker from out-of-state. This is akin to the practices of a real estate service called the "multiple listing service". A real estate broker will acquire a listing on a property and place it in the MLS in hopes that other real estate agents will try to sell it and split the commission. This network is still rather informal, but it is a large part of a national ticket broker's business, and it is done with local brokers who make a market in a particular event as well. You don't have to buy, and if you need to, then they're doing you a favor helping you find that ticket; the broker owes no responsibility to you to give you a price within your price range. Customers are called "clients" by brokers, but legally and in practice, they are strictly customers; no fiduciary bond exists there. As we'll state many times herein, nobody has the right to purchase any asset, be it a ticket or real estate or cars or jewelry, at any specified price below the offering price, unless the price is agreed upon through good faith negotiation.

If you think concert tickets are high, you probably haven't priced tickets to popular sporting events. And if you don't know why they are priced at what seems to be an unreasonably high price, you haven't read this article, so let's recap the theory behind the secondary market straight from Economics 101 . . .

Secondary market ticket prices are based upon a number of factors, most importantly:

The Supply vs. Demand factor --- not just the overall supply of all sellers combined, but also the supply and motivation to sell that one particular seller has, and not just the overall demand, but also the individual demand/motivation factor, which is desire;
The historical price (past prices) of tickets for the same event in the past;
The current asking prices quoted by other brokers and resellers;
The face price of the ticket; (only because this is part of a Ticket Broker's cost)
The quality of the seating pertaining to a particular ticket;
The costs incurred by a seller to acquire the tickets; (labor, expenses, etc.)
The costs incurred by the seller to market the tickets; (advertising, 800 #, labor, etc.)
Valuation by the PFA Method; (the Pluck From Air method of arriving at a ticket price, which is what most individuals use when pricing their tickets)
The weather; (too cold, too wet, too hot, just perfect, etc.)
Broadcasting of the event; (for sporting events, such as local blackouts)
The availability & quality of tickets at the box office; (the sold-out factor)
Location of the event; (city, venue, outdoor, indoor, etc.)
Terms of the sale; (ability to charge the purchase, trading tickets, etc.)

The first item, supply vs. demand, will determine ticket resale prices more than anything else. If a large segment wants the tickets, even if there is a large supply, the prices will tend to be very high. This is because sellers know the event is in high demand and people will pay top dollar to get the tickets. However, it's not rare for tickets to be sold at or below the face price of the ticket for events which are low in demand, regardless of supply. It doesn't matter how many tickets are available if nobody wants them. So therefore, the price is basically set by the seller initially, but justified by initial demand and perpetuated by subsequent demand.

So, if you aren't agreeable to the prices quoted by a ticket seller, don't buy. It may cause a possible immediate reduction specially made for you by that particular seller (if used as a negotiation ploy), and a possible reduction in future prices from that seller and in the overall market itself (especially if enough people agree with you), but you can bet the mortgage that if its a popular event, someone else will pay the price, and hopefully for you, it's an event you can live without, because many times people wait for ticket prices to go down, only to find later that prices have gone up, or, they find that the choice tickets are not available anymore.

I saw an article advocating the best way to obtain tickets to any event was to wait until the day of the event. This is not a bad strategy by no means, and it works in many instances; however, keep a few things in mind before you try this --- A few events will carry the same premium (if not a higher premium) on the day of the event, if the supply is low and demand is high, and there are times when there are just no tickets to be found in the street (at least, quality seating) prior to certain events. And some people have to make special plans to attend an event and don't want to take the risk of not being able to obtain quality seating or any seating at all. There's also the possibility of acquiring tickets which are either counterfeit or lost/stolen.  And some street vendors can spot a person who badly needs tickets from a mile away, and they will negotiate the gold from your teeth and have you thanking them for the privilege! This is not a rip off, it's nothing more than a good faith negotiation between a buyer and a seller, kind of like that quaint cottage on the lake that the little lady must have at any cost.

Considering the poor quality of most tickets offered on the street prior to an event, a street vendor is doing you a favor if they offer any quality seating at all, and you should be happy that you were actually able to obtain good quality tickets at all. In fact, for many events, tickets sold in the street do sell for face price or less; problem is, it's generally worth that quality wise.
 

IF TICKET BROKERING IS GOOD FOR THE PUBLIC, THEN WHY ARE THERE LAWS AGAINST IT IN SOME STATES, AND WHY DO THE FANS, PROMOTERS, ARTISTS AND VENUES HATE IT SO MUCH?

It's a wonder why venues or promoters would dislike ticket brokering; after all, if it were not for Ticket Brokers, many losing events would lose even more money, as the purchases made by brokers and the free advertising received courtesy of brokers' ads only help these smaller events. Many brokers believe that they deserve to participate in sold out events as repayment for their help on the slower events. Although brokers' purchases are a small percentage of large shows and sellouts, they represent a much larger (and much needed) percentage of sales on slower selling shows.

Most of the problem is the general ignorance and attitude toward brokers. Case in point: About 300 years ago in colonial Virginia, there was a group of people who were so reviled that their kind was outlawed in the entire colony. Not only were they not allowed to practice their trade and their beliefs, they were banished from the colony forever by decree. They were looked upon as treacherous scum who preyed upon citizens and practiced their craft in a menacing, unholy and unethical manner.

No, they weren't ticket brokers, witches or a religious cult --- They were lawyers! Now granted (and in some cases justifiably), they are looked upon today by some with a somewhat jaundiced attitude, while being highly respected by others as a lofty profession, but they are allowed to practice their craft lawfully under regulations. And just because of he actions of a bad few, all of the others who work within the framework of the laws and ethics should not have to be punished as well.  It's safe to say that the similar attitude toward ticket brokering will continue to change toward a more positive light by a majority of the population that represents the more sophisticated fans of concerts and sporting events.

It is incredible to think that in America, the land of free-enterprise and the home of the Braves, a country which was formed by independent thinking rebels who were so against governmental controls that they started their own government, that there are actually people who are being arrested for reselling their tickets in a private transaction with a willing buyer! This is one of the most victimless "crimes" anyone has ever invented. What 2 people do in a transaction that has no recourse on public safety or their own safety should be their own business. It's absolutely appalling that a person will actually go to jail and have their personal property confiscated (the tickets) if they even attempt to sell a ticket in Georgia or Florida for, say, $10 above the face price, when both the Universities of Georgia and Florida will charge that same individual a hefty premium above the face price if they want to buy season tickets on the 50 yd. line for its football games. In fact, in a University of Florida Student Government Document, it states that a student is subject to suspension for, "Ticket scalping, i.e., selling tickets to any University of Florida function or event, or any event being held or to be held on the University of Florida campus, for more than $1 over the original price", even though the University itself charges a premium into 4 figures per ticket for the best seats to its football games! Keep in mind that this is not indictment strictly against Georgia & Florida; rather, all universities use the same practices to sell their tickets and discourage others from doing the same.

You can bet that 30 years from now, we'll all look back on how ridiculous it was to promulgate laws like these, just as we now look back and realize how ridiculous it was to have racially segregated facilities in the 60's, the red scare of the 50's, prohibition in the 20's & 30's, and preventing women from voting throughout the 19th century.

The image of ticket brokers as scalpers has been ingrained into the public mind for so long now that many people rate ticket brokers below insurance and used car salesmen (who also provide a much needed service). Unfortunately, just as there are bad insurance and used car salesmen, there are bad ticket resellers, just as there are bad elements and operators in virtually every field of business. Water flows the path of least resistance; that's why you get crooked rivers and crooked men. It's a cash business in the street and the allure to make a quick buck at the expense of others is very enticing. But the unscrupulous efforts of the very few should not diminish the positive effects of the professional majority. In actuality, it's the individuals who sell their 2 to 4 tickets who create most of the problem in the secondary market. They ask much more than the average secondary market prices; if they don't sell them, they just personally use them, no loss. Ticket Brokers MUST sell; they can't use 50 tickets or more personally. Also, since season ticket holders often ask prices which are in many cases far above the average market price, brokers are forced to pay much more than they should, thereby driving prices even higher. And the individual almost always clears more profit than the broker; the broker only makes in many cases about 1/2 or less than the individual upon resale, and the individual has no overhead. Also, individuals generally don't care about goodwill or repeat buyers, so many times they make misleading statements about their ticket locations, if not out & out lies about the quality and/or location of the seating, and many times they renege on their agreements to sell at the last minute, causing massive frustration to consumers and brokers.

It's not that Utopian values have gone away . . . they actually never existed in the first place.


DO TICKET BROKERS HAVE TO BE AUTHORIZED TO SELL TICKETS FOR ANY PARTICULAR EVENT?

Contrary to what the promoters and sporting events would have you believe, the answer is, a ticket broker can sell you an official ticket to any event and does not have to be authorized by the promoter or sporting event itself to do so, and the tickets you purchase are good for admission just like anyone else's ticket, and any broker will guarantee it.  The bottom line, a broker has tickets that are just like the tickets you buy from the box office, so buy one if the price suits you.  

There is no authorized dealer of any ticket to any event except the box office. Ticketmaster is actually an agent, but though they are not the actual box office, because of their relationship and simply because of habit, people refer to Ticketmaster as the "box office".  The represent the box offices for most concerts and many sporting events in the USA. But you can still buy official tickets from private brokers, as they are good for admission just like any ticket purchased from Ticketmaster of the box office, and ticket brokers guarantee it, and why not; it's no concession to guarantee it anyway. It's like going to a used car dealer to buy a Ford; they're not Ford dealers, but who cares? You want a Ford, they have a Ford, so buy it.  It works and that's all that should matter to you anyway.

The problem is the good seats, (and simply any seats for a major event) are usually not available at the box office as they are usually sold out well in advance, sometimes within just minutes after an on-sale, therefore, Ticketmaster cannot help you if the event is sold out. The only way you can get a ticket to a major sold-out event is to find someone besides the box office who has them for sale, and if you deal with an individual seller, such as a person who offers them in the street the day of the event or a person advertising in the paper or elsewhere, you run the risk of purchasing a counterfeit or stolen ticket, or sending your money and not getting your tickets, or getting something other than what the seller advertised, or who knows what other peril and risk.

The other, safer way is to contact a ticket broker. A ticket broker is a private, for-profit agency (not a "public service" agency) that sells tickets to virtually all events worldwide for a profit, and a good ticket broker can get you a ticket to virtually any event in the world, sold out or not. And most brokers accept credit cards. And you can get the best seats in the house to a major sold out event through them.  So what's the catch?  There is no catch, except that you have to understand that these folks are businesses and they are in it for the money, just like any other business.  You'll have to pay what's known as the "market price" for the tickets, so essentially, you are bidding against others who want the same ticket. The ticket market works a lot like the stock market and real estate; the price is based on supply vs. demand. Therefore, you can easily find a ticket to a sold out Broadway show, but instead of getting for its box office price of say, $100, you may have to pay 5 times that or more to get it. These companies are in it for the money, they own the tickets, and others are willing to pay many times the face price to get them, so as long as there is a good market for any particular ticket, expect to pay a broker a premium to get them for yourself.

Why does the original price matter anyway? You've bought thousands of items for more than their "original" price!  The box office is sold out; so it no longer matters what the original price was anyway? All that matters to you as a buyer or seller now is the "market" price, as the B.O. is out and you want a ticket, and if you call 5 sources and the best price you can find is $300 over the face price, that's the market price and you can either pay it or don't go. Apparently somebody's willing to pay it if the price is that high; these guys don't like to "eat" tickets, so they will eventually sell them, if not to you then surely someone else.  Ticket Brokering is legal in 35 states, and before long it will be legal in all 50 states.

So the answer is, no, ticket brokers are not an "authorized" ticket agent, but it doesn't matter. They have official tickets that they own and offer to the general public at a premium, and you can buy them and enter the event just like anybody else or not.  They don't print the tickets or anything like that; they just buy them from others who don't want theirs and resell them to the public at the market price, kind of like a "clearinghouse" for unwanted tickets.  So don't be afraid to purchase from a ticket broker, especially if you pay by credit card.


DO TICKET BROKERS GET THEIR TICKETS THROUGH ILLEGAL OR UNETHICAL METHODS?

A number of stories always seem to circulate about various unnamed brokers who have obtained tickets through methods that, although legal according to state laws, are certainly suspicious. We have heard the urban legends of stories where a broker had allegedly paid an employee of an authorized ticketing agency to manipulate the sale by providing the broker with all or a good portion of the wristbands used to conduct ticket lotteries. Or to set aside the best seats for a payoff. Another story involves brokers who pay homeless people to get in line to buy tickets, but this is not an unscrupulous or even unethical act, which we'll explain and discuss later in this article. Does any of this ever happen? Allegedly. Is it of the size and proportion that the anti-brokering establishment wants you to believe? Absolutely not.

Brokers are pros at obtaining tickets; that's what they do, therefore, they will obtain the best tickets and more tickets than anybody else. That doesn't mean it's done in some surreptitious or unscrupulous, illegal manner. They just know where to go to get them, and they are the same places anyone can go, and they dial the same numbers everyone else does to call for tickets, but they know how and when to call. That's all. Not very steamy or sexy, but it's a fact.

Suffice it to say that although some doctors do screw up badly when treating a patient and don't tell anybody, it doesn't mean that because of the bad doctors, you should avoid all doctors or fail to seek medical attention in the future when you need it. Sure, they are at least reviled by a certain segment of the public if nothing else, but these brokers do this for a number of reasons, one of which is that they believe that they deserve preferential treatment on behalf of the broker's customers, who they believe deserve the best tickets for their own reasons. Ticket Brokers feel, maybe even justifiably, that they deserve the best tickets because, in many factual cases, brokers do keep certain events from losing money by buying tickets to less desired events and provide free advertising for the promoters of those events. And they also believe that since the states that unfairly enact ticket laws to stop them from practicing their trade, which they believe is entirely unfair, they feel that they have the right use any method available to them to keep one step ahead of the game, even the wrong methods.

Now mind you, I'm not stating that they are right or fair in their thinking and their actions; I'm only laying out what I believe are the reasons behind their actions. What lengths would you go to if you felt the government was suppressing your right to work in your chosen field though you felt it was wrong and unjustified? Enacting laws to stop the business of ticket brokering is wrong (in addition to being a breech of a Ticket Brokers civil rights, which I will tackle later), and will not stop ticket brokering. Ticket Brokers are part of our society in America, which is a free-enterprise system, a system which is driven by money in order to survive. And limiting and putting constraints on ticket buying and reselling only serves to drive the prices of tickets even higher in the secondary market (If you think concert tickets are high in the secondary market, check on the prices of tickets to major sporting events). But the fact remains: A ticket is worth whatever a buyer and seller agree to, and a private transaction should not be circumvented by inane laws that have no basis in reality or legal precedence (We'll explain this later also), and interfere with an American citizen's ability to earn a living in a freely negotiated transaction between two willing participants, a transaction which has no bearing on the public safety, emotionally, physically or financially, in any shape, form or fashion.
 

SHOULD I TRUST A BROKER WHO SELLS TICKETS IN ADVANCE FOR DELIVERY AT A LATER DATE JUST BEFORE THE EVENT? IS THIS A COMMON PRACTICE?

This is a very common practice. In fact, with most major sporting events such as the Super Bowl, The NCAA Final Four Basketball Tournament, and The Masters, it's standard operating practice, and there's nothing patently wrong with it. In fact, it can help you get the tickets you need at a very attractive price. For major events, if it were not for this practice, you would have a very tough time obtaining tickets at all.

It's hard to find tickets for major events, and since these tickets generally become available very close to the event date, and since they are usually priced very high, many times because of the face prices of the tickets (not to mention demand), if Ticket Brokers weren't able to "pre-sell" the tickets (sell in advance before actual procurement), most brokers would refrain from making a market in the tickets, because the risks would be too high. This would cause the prices to skyrocket, and that alone should be a good reason to promote pre-sales. By pre-selling the tickets, a Ticket Broker can create a market before the market actually begins, and allow you to finalize your plans in advance.

There are positives and negatives with this type of transaction, but the negatives will generally not come into play if you deal with a reliable broker. A pre-sale is nothing more than a type of futures contract, and it happens every day in the world of commodities trading with staples like wheat, corn & gold at places like the Chicago Board Of Trade & The New York Commodities Exchange (COMEX). In this case, the broker is selling you a ticket for a stated price for future delivery, and the broker either knows that he can obtain those tickets for less at a later date, as he may already have an agreement to receive them in the future, or he speculates based on current observations and past experiences that he will be able to obtain those tickets for less at a later date. This is where the problem arises with some brokers, especially those who take a lot of orders. When the tickets do become available, their can be such a strong demand that the prices can spike at the future date when they have been promised, creating a shortage in the supply, which may cause the broker to pay much more than what he sold them for to fill his orders. If he's a financially solid and reliable broker, he will generally fill the orders and lose money, figuring that maybe he'll make it up the next time he does business with his customers. He may also avoid other potential problems by taking the loss and fulfilling the agreement.

So what are the alternatives? You can wait around until the tickets become available in the marketplace and try to find a broker who has the tickets in hand. You will surely pay much more for the tickets that you had hoped for, if you are able to find them at all. It's akin to waiting around for a hotel cancellation instead of booking in advance, but with much more risk, as hotel rates don't spike at the last minute. Corporate buyers, such as media companies who purchase tickets as a gift or a prize, cannot wait and take the risk. Before they offer a prize through advertising, they must have a commitment to receive the tickets. These are the ones who rely on brokers for their business fortunes, and vice versa. With major events, by the time the tickets are in hand, the prices may have spiraled 2 or 3 times higher than the pre-sale quote a month earlier. In that case, it would advisable to purchase from a broker that is reliable brokers, that always fills its orders, but how can you identify them?

Use your common sense. Look for a broker who has been in business for a few years. Any consumer agencies that tracks businesses will tell you how long a company has been in business. It's highly unlikely that a company could stay in business long if they weren't filling their orders. Also, you should purchase with a major credit card so you'll have some recourse for getting your money back should the deal not materialize as planned. Also make sure you receive a written agreement and/or a bill of sale which stipulates the delivery date and the terms of the agreement. Read the agreement, and if you don't agree to it, don't do business with that broker. You can always have the purchase removed from your card if the broker does not execute the order, and it would be advisable to give advance notice to any broker who offers to pre-sell you a ticket that you are aware of your cardholder's rights before you begin the transaction. This will scare off the unscrupulous operators every time.

Keep in mind that it's virtually impossible to get an exact seat location guarantee for a pre-sale, unless the broker is selling you a location that he knows he will get by contract. Pre-sales are usually sold by zones, but you should receive substantially the tickets you request, in the area/zone of seating that you asked for and agreed to, such as home side, lower level between the 30s, 10 rows & up. In many cases, a broker may have to substitute like-kind seating for the area you requested, such as the 25 yd. line, or the 40 yd, line, row 9, or you can have lower between the 30s, row 10 & up, but on the opposite side of the field. Making a scene over what is essentially a small difference in value and quality for a large-scale event like a football game is not going to carry much weight with a credit card company, though you might be able to get a refund for the difference in value. Save yourself the trouble negotiate with the broker. A reputable broker will offer to refund the difference before you do, and more often than not, a broker will give you a free upgrade for the next event your request in order to keep you business. Or you can always spread your wealth around and use another broker next time.

Without pre-selling, you would find very few tickets available for major events such as the Super Bowl, and they would be very high priced. Pre-selling brings professional ticket hunters into the market, which can help to provide more supply in the marketplace than would ordinarily exist, and that helps to stabilize prices through increased supply and mainly competition. We're talking about the toughest tickets in the world here, there's going to be a strong demand; at least a ticket broker can help you obtain the tickets that most fans like yourself can't find, and bring it to you at a fair, current market price. Without brokers, there would be very little liquidity.
 

Go to page 4

Back to page 2

Back to the home page
 

This web page and its entire contents (c) 1996 TIXFAQ. All rights reserved.
Use of any part of this text is subject to these guidelines.