IANAL, but the exact language from the complaint was:
>WHEREFORE, Plaintiff, individually and on behalf of the Class, respectfully requests that this Court:
>...
>Award compensatory, statutory, and/or restitutionary damages, as applicable, in an amount to be determined at trial and that the aggregate amount in controversy across the whole class exceeds $5,000,000;
it doesn't say that the damages are capped at 5M, only that they're asking for at least 5M.
The article makes it sound like the information about Andro is new but it has been known for years. An SEC filing[0] from March of last year mentions it and I was able to find a post on Wall Street Oasis[1] talking about Andro three years ago. Awful, predatory behavior for sure. Is it just the issues with the World Cup ticket sales that have made people care about this?
Except Live Nation owns most of the venues that aren’t stadiums. The mom and pop’s couldn’t compete with their monopoly and went under or sold to them.
The fact that "the name on the ticket must match your photo ID, but you can resell at any time before the event" would instantly solve scalping problems and yet nobody does it is your clue that nobody actually wants scalping problems to be solved. Scalpers are the sin eaters for Ticketmaster and the events themselves, taking the hate so the performers don't have to.
Do they? Not necessarily making an argument for or against the original point, but to me airports epitomize "slow and tedious". My hunch is that they also don't handle nearly the volume of people/time that major stadiums do during event entry.
That's the security check, of which id check is only one part. The bottleneck is everyone needing to take out their laptops and then repack their bags. Same with boarding. The bottleneck there is people putting their luggage into the overhead compartments.
Maybe a bit of a dystopian situation but ... I think this was 10 year ago now I went to an Utada Hikaru concert where I had to upload a picture of myself on a dedicated website and when the tickets were scanned I think they had access to that picture
Here’s a wild idea, tie tickets to a drivers license/photo id number, and scan the id.
Edit guess that doesn’t work for kids. Start the tickets at 10k and drop them by a percentage a day. Automatic price discovery. Rich people can just buy them whenever they want.
The price tickets sell for will be higher if scalping exists. Demand increases for 2 reasons:
1 - I’m more likely to buy a ticket or pay a higher price if there’s a chance of turning a profit if I can’t go.
2 - Speculators are more likely to buy unused inventory if they can turn a profit. This increases total tickets sold. (Scalpers get paid for taking risk)
I’m not defending this. I’ve given up on concerts for my favorite larger bands due to sticker shock.
All of your points apply to performers who may not sell out, so scalpers take risk, you may buy more, speculators may soak up what would go unused.
But consider Ms. Swift. All of her shows sell out, period. Face value tickets are maybe $400 max, and resell for $2000+. I don’t think she sees any benefit from scalpers. Ditto any performer that is in very high demand and certain to sell out and have unmet demand.
> I don’t think she sees any benefit from scalpers.
If a ticket sells for $2k then the platform gets some massive portion of that (like $400?) - are you sure some of that doesn't make its way back to the artist, at least on the primary sale platform? I would be rather surprised if it didn't.
In addition to what others say, the potential for profiting later increases the initial price.
Think of it this way… let’s say two identical companies are going to IPO. Company one you can sell the shares for a profit later if you like. Company two you can only sell for the price you bought.
Illegal usually means there's a law forbidding it.
Tickets are usually governed by the Terms and Conditions (Contract) between original purchase.
It's already possible for the terms to forbid resale.
So as it stands it's possible to sell untransferable tickets. And those who sell such tickets are in breach of contract, but are not breaking a law.
What would 'making reselling tickets illegal' entail, a law that makes selling transferable tickets illegal? That would be a very weak position. A law that upgrades the resale of untransferable tickets to a crime? Again a very weak position.
I contend that people that suggest and write laws should learn about actual law.
IANAL, but if you enter a contract with the intent to violate it, is that legal? My understanding is that it's technically illegal (only civil perhaps, but still illegal), the impracticality of enforcement notwithstanding. Also, I have no idea if the contract for a ticket "sale" is really considered a contract for the purposes of such laws.
>but if you enter a contract with the intent to violate it, is that legal? My understanding is that it's technically illegal (only civil perhaps, but still illegal), the impracticality of enforcement notwithstanding.
On the first matter, I'm not sure, it might be fraud, which can be civil or criminal if there's a specific law that defines criminal penalties.
Again I guess the proposal could be that a law specifies that the resale of tickets is a so and so crime (misdemeanor?) and carries a penalty of X. We are steelmanning the argument here, and it still sounds quite untenable.
On the civil front, I can see how the intent to breach a term might be relevant, but I can also see how it might be irrelevant, in the sense that the breaching party would be forced to remedy the damages of the breach, no more no less. How would the intent to breach a term increase or reduce the damage caused by the breach if so?
>Also, I have no idea if the contract for a ticket "sale" is really considered a contract for the purposes of such laws.
On the second matter, it really is. The layman perception of a contract is usually a formal document that needs to be signed, whereas in no legal systems that I know of are these actual elements of a contract. In most legal systems a contract is a much broader concept: a private agreement between two parties, with the main defining elements being offer, acceptance and consideration.
Most if not all trade transactions are contracts, they include the main elements.
> On the second matter, it really is. The layman perception of a contract is usually a formal document that needs to be signed, whereas in no legal systems that I know of are these actual elements of a contract. In most legal systems a contract is a much broader concept: a private agreement between two parties, with the main defining elements being offer, acceptance and consideration. Most if not all trade transactions are contracts, they include the main elements.
Note the layman perception wasn't why I was doubting this; I'm aware not all contracts are that formal. The reason was I don't know if this is considered a sale or not, and whether other principles apply in that case (like first sale doctrine) and if they might somehow override this.
I'm not sure if you question whether the first sale or the latter resale might not be contracts.
But in either case, I believe both them to be. It's similar to a sale of a stolen good with an unaware purchaser.
It's a contract on two counts. First, the contract is not void, the subject is not illegal in itself, the seller would just fail to fulfill their end.
Second even if a contract would potentially be voidable, I would argue it is a contract until a judgment voids it, this is a bit subjective, ontological and inconsequential for cases where the judgment would be certain like a contract for stealing, but the more borderline the case is, the more relevant it is, a contract about a complex legal issue that might be or might not be voided with p=0.5 is still a contract to me. Of similar value to a contract about a good of stochastic value, like an option, or an asset that may have been stolen with p 0.5
For StubHub to have insider dealing isn't so surprising, but I am shocked at how brazenly and openly it's occurring. Nothing covert or concealed, just the CEO of a marketplace openly admitting that they run a hedge fund that resells scalped goods on that marketplace while keeping other scalpers off the platform.
no, it gets more layers.. a quick search says "Through its affiliate Colloquy Capital, StubHub helps bankroll other mass ticket scalpers by providing short-term financing based on expected future sales, further inflating the volume of professional resellers on the platform." (I have no direct knowledge of these participants)
Ticketmaster sure but back in the day I could get tickets for a song on stubhub. That seems to be a relic of the past and the resale ticket marketplace is barely less than face value.
I don’t really understand the outrage over scalpers. Isn’t this just normal market behavior? Is a retailer that buys things and sells them with a markup a scalper?
People seem to be willing to pay crazy prices for events.
There is a reason this doesn't work in general though.
If you bought up all the food, farmers would raise prices until either you couldn't afford to do that anymore or eventually there is a splurge of new farmers taking advantage of all your free money until you run out of money. It could maybe work in times of famine where the government introduces price controls or rationing; it does not work in normal times.
For black markets (which is essentially what scalping is) to work, there has to be some shortage of a good that is priced artificially low. It works with concerts because singers can only sing so much but they also don't want to make the concert so unaffordable that only millionaires can go. There are very few situations like that. In most industries you would just increase prices until supply equals demand.
This makes sense, but I'd contend it's all the more reason for outrage: not only are scalpers doing what they're doing anyways, but they're destroying the (totally legitimate and sympathetic!) reason for "artificially" lowering the price to begin with.
I should note that outrage doesn't seem to land on the people who buy from scalpers, which is...probably correct? Seems easier to say "don't break the contract" to scalpers instead of fans who are just able to pay more.
This is the reason that businesses don't try to monopolize the food industry. It's not competition as we just saw from the egg industry. The government gets pushed back from the masses pretty quickly on food related issues.
Yes, although i would argue that a cartel suppressing supply is a different mechanism than what is happening with scalpers.
The onion futures thing is kind of interesting, because it was essentially the opposite of a scalper - they didn't try and buy all the onions to make price go up, they did it to crash the price of onions so that their short positions would pay off. Still a fair counter example to the idea that the market would self correct by itself.
People not trying to monopolize the food industry is a bit of an american centric view, e.g. Canada had a government mandated wheat monopsony for a long time. I think australia had something similar. I'm sure there are plenty of historical food monopolies. They of course couldn't be too greedy or its off with their head.
>This is the reason that businesses don't try to monopolize the food industry. It's not competition as we just saw from the egg industry. The government gets pushed back from the masses pretty quickly on food related issues.
But you provided your own counterexample with eggs?
Note they didn't monopolize it, so I guess that was correct. They did form a cartel that did cause a lot of political issues, and if we had a functioning government would have been a very risky bet.
Like the logic here is the scalper company buys all the crops and then resells at an exorbitant mark up because everyone needs to eat, but then the market price becomes what the scalper is selling for. Would the farmer really leave that much on the table? They may be willing to give some discount to sell all at once, but there comes a point where it is no longer worth it to them to do so. The whole scalping thing only works if you can buy low sell high, but if you sell high the people you are buying from will start to notice that they too can sell higher to other people.
Concerts are different because there are brand reasons to keep prices low. Farmers aren't a charity, they aren't going to sell significantly below market price just for the good vibes.
There is a case where farmers don't have the power to fight against big corporations. One example in US that I know of is roundup pesticide issue.
This makes me think that it is possible for corporations to suppress the price on the farmer side and fix it on the consumer side.
This happened to at least some crops in Turkey in the past, for example farmers were selling hazelnut for 15TRY/kg and you could only buy it for 100TRY/kg in big cities. Farmers were actually complaining that they couldn't even make a profit from growing hazelnut.
Corporations would like to do this with even water if given the chance as Nestle CEO was saying himself in a famous video.
So they would for example do it with bread and starve people in the process if it means they can make money. And I think that they could easily do this for example in US if they didn't correctly fear that people would force the goverment to smash them.
Also the selling format doesn't have to be the crop itself. For example they make nutella from hazelnut. So farmers can't associate it directly with their selling price even though it is obvious that they are getting shafted.
Another possibility is the farmer selling 80% to the corporation for the normal price and then selling the rest at a massive markup so both profit. Same thing that is happening with ram manufacturers. Then the whole thing is justified as free market and only the consumers get hurt because in the end you have to buy RAM. Or equally the corporation could pay the farmer a 20% bonus and still make 80% extra profit on end consumer. Farmer might not object if the scheme is dependant on the corporation.
It's not a simple buy/sell marketplace. There's no recourse for fans who purchase a confirmed ticket, only to find that the seller "doesn't have them" and see the same ticket relisted for higher if the price jumps. Stubhub prioritize these scalper relationships and doesn't meaningfully protect its buyers from getting screwed over.
The ultimate customers would certainly pay more than the face price which is what the scalpers pay, yet the scalpers get all the tickets. This is abnormal market behaviour.
An auction would be the obvious solution, and I guess you could argue it effectively is an auction, just with initial sales that pretend to be a race and are actually sold to speculators who then run the auction.
If reselling is allowed a market is created, pushing up prices. But that extra money doesn't go towards anyone involved in the creation of the product! It goes towards scalpers. Though there's a bit of price discovery value....
Without reselling scalpers have no reason to scoop up the tickets.
So if you prevent reselling... then concertgoers just have to do a lottery or something for the scarce resource and people who aren't interested in the concert have no reason to buy the tickets! Just a better experience for everyone except for the scalpers and I guess Taylor Swift cuz she won't know the price ceiling for tickets.
I suspect we'd see management companies trying out auctions and upgrade bidding not long after a resale prohibition passed. Or they'd reinvent the fare class system airlines use.
You are describing rent-seeking behavior: middle men who add no economic value yet inject themselves into transactions.
Yes, this is “normal” in the sense that it is common. It is “normal” in the same way that cancer is “normal”.
No, this is not “normal” in the sense of being behavior the government should just tolerate. It is in the same category of market failures as monopolies and externalities.
You are mixing things up. Just pricing your product based on demand does not necessarily make you a scalper. It's the fact that you are not the producer of the good itself that makes you one.
To use the real estate example, there is a difference between a developer selling a house it built, and an investor selling a house that he bought when it was cheaper.
I think that if you poke at the term "rent-seeking" with the definition of "middle men who add no economic value yet inject themselves into transactions", you'll just end up arguing about what "adding economic value" means.
That said...if you can do that, you'll probably find that some additions of economic value are far more defensible than others, so it shouldn't all be flattened in the manner you're suggesting.
I mean, scalpers add economic value, right?! They allow (wealthier) people who didn't stand in line at the right time to have a chance to purchase a ticket!
Yeah. “Rent-seeking” is just a fancy rhetorical term for “people doing things I don’t like with money”.
Subscriptions are rent-seeking. Loans are rent-seeking. Spending millions in capital to buy a building and renting apartments for thousands? Rent-seeking. Copyright and patents, for sure, unless an AI company is involved in which case copyright is noble and must last a thousand years, because AI companies are rent-seeking.
No, too reductive. Rent-seeking is when people manipulate a situation to charge money without providing value themselves. Landlords are rent-seekers to the extent that they don’t do much, they mostly just own property - typical rent is many, many times the value of someone looking after the maintenance and building insurance for you (and anything else you want to argue a landlord does). The housing supply is naturally quite limited so the market doesn’t self-correct.
And anyway, if enough people don’t like the things people are doing with money, we can stop them from happening! So a pretty odd gotcha, to me.
I mean, you saying that landlords don't do much is the exactly what I meant when I said "arguing about what 'adding economic value' means"
>typical rent is many, many times the value of someone looking after the maintenance and building insurance for you
I'm curious about this.
I'm not sure if there's a universal rule of thumb, but it's something like "expect 1-4% of the home's value in maintenance every year" - $4,000 to $16,000 on a $400,000 home. Take the lowest end of that - $333/month in expected maintenance a year. Add $100/month for home insurance.
You're claiming "many, many times" $433 a month in that scenario? Given more recent interest rates and the uptick in "maybe you should rent for awhile, actually" articles/videos I've seen, this doesn't strike me as plausible...
Certainly where I live, rents are many times that, yes. If landlords really were just charging cost plus a modest profit (despite that I really object to any profit on housing) I wouldn’t be outraged.
okay, so like...7x that $433 figure? $3000 a month? If a mortgage + escrow payment on a 400k house is around $2500/month, a comparable rent is $5500 a month?
Where do you live, if I may ask? I live in a reasonably sane market which might be why this isn't clicking for me.
Not sure what the intent behind this reply is but - I guess it's strictly true and I think we're agreeing in some sense, but to be clear I think it is totally fine to say that scalpers are doing things I don't like with money, and I'd like to see their excesses curbed.
The outrage is over the apparent collusion between a platform that argues it only facilitates a fan-to-fan marketplace, and a hedge fund run by the platform's CEO that sells a massive volume of resale tickets. This is definitely not on the spirit of competition regardless of it's illegal or not
Yes it's rational market behavior. But it bothers people for such a blatantly worthless middleman to capture all consumer surplus for themselves while providing zero value.
We've known for years that ticketmaster scams their tickets on StubHub. Concerts selling out instantly, to only see tons of tickets on stub...
I'm sure if they get shut down, they'll just do it again under a different name, but they can't pretend it's a small handful of scalpers when they're the ones doing it themselves.
You're not entirely wrong, but the root issue is artists not charging the market clearing price for tickets. If you're selling something worth $1000 for $200, you shouldn't be surprised arbitrageurs pop up to take advantage.
My (probably mis-)understanding of StubHub/Ticketmaster is that they're serving as sin eaters / reputation shields for the artists:
Phase 1:
- Artist lists tickets as "$20"
- SH/TM charges $20 + $15 convenience fee
- SH/TM pays the artist $30 and keeps $5
- Artist gets to look like they're kind/generous for pricing so affordably while making some of SH/TM's cut
Phase 2:
- SH/TM hold back some percentage of tickets (possibly most or all of them) to sell on the "resale" market
- Those "resale" tickets sell near the market-clearing price, either earning higher margins than if they had sold at list price, or ensuring that most of the seats in the venue are filled.
- SH/TM kick back some percentage of revenue from resale tickets to the artist.
That's also easy to solve. Allocate discounted tickets by lottery and bind to a name (think airline tickets). If for whatever reason they can't make it, the ticket goes back into the lottery pool. Or maybe if they want the tickets to be transferable, you can put in some nominee ticket holders (eg. max 3 people you can transfer it to).
I understand the arguments against charging the market clearing price, but I do just think it would be very funny for Taylor Swift to sell out a concert charging $10k+ a ticket.
> StubHub and its CEO, Eric Baker, have been hit with a proposed $5-million class-action lawsuit
This should be much higher. A class action lawsuit shouldn’t be worth less than what these people can make scalping a single Taylor Swift concert.
This just opens an opportunity for them to settle, admit no wrongdoing and then include a clause in the settlement that prevents further lawsuits.
IANAL, but the exact language from the complaint was:
>WHEREFORE, Plaintiff, individually and on behalf of the Class, respectfully requests that this Court:
>...
>Award compensatory, statutory, and/or restitutionary damages, as applicable, in an amount to be determined at trial and that the aggregate amount in controversy across the whole class exceeds $5,000,000;
it doesn't say that the damages are capped at 5M, only that they're asking for at least 5M.
The article makes it sound like the information about Andro is new but it has been known for years. An SEC filing[0] from March of last year mentions it and I was able to find a post on Wall Street Oasis[1] talking about Andro three years ago. Awful, predatory behavior for sure. Is it just the issues with the World Cup ticket sales that have made people care about this?
[0] https://www.sec.gov/Archives/edgar/data/1337634/000119312525...
[1] https://www.wallstreetoasis.com/forum/private-equity/andro-c...
Those with ties to the industry have known for decades.
End it.
Make reselling tickets illegal again overall.
Allow resale within 5 days of the show only (for those that genuinely can't make it), and for face value+original fees only.
Live Nation needs to get the guillotine. The monopoly will find other ways of extracting value if you try to fix one problem created by it at a time.
Except Live Nation owns most of the venues that aren’t stadiums. The mom and pop’s couldn’t compete with their monopoly and went under or sold to them.
The UK is passing a law which makes it illegal to resell event tickets for greater than the face value.
+fees, though ideally the fees would be capped too
The fact that "the name on the ticket must match your photo ID, but you can resell at any time before the event" would instantly solve scalping problems and yet nobody does it is your clue that nobody actually wants scalping problems to be solved. Scalpers are the sin eaters for Ticketmaster and the events themselves, taking the hate so the performers don't have to.
Adding ID checks would make venue entry a slower and more tedious process.
In the vast majority of venues, ID checks are happening anyway to verify eligibility for drinking.
Yup, I'm in 30s and have been ID'd for every show I've gone to in the last few years.
In practice a lot of venues are already 21+ so they are already checking IDs.
>Adding ID checks would make venue entry a slower and more tedious process.
Airports seem to handle them just fine?
Do they? Not necessarily making an argument for or against the original point, but to me airports epitomize "slow and tedious". My hunch is that they also don't handle nearly the volume of people/time that major stadiums do during event entry.
>but to me airports epitomize "slow and tedious".
That's the security check, of which id check is only one part. The bottleneck is everyone needing to take out their laptops and then repack their bags. Same with boarding. The bottleneck there is people putting their luggage into the overhead compartments.
Maybe a bit of a dystopian situation but ... I think this was 10 year ago now I went to an Utada Hikaru concert where I had to upload a picture of myself on a dedicated website and when the tickets were scanned I think they had access to that picture
Here’s a wild idea, tie tickets to a drivers license/photo id number, and scan the id.
Edit guess that doesn’t work for kids. Start the tickets at 10k and drop them by a percentage a day. Automatic price discovery. Rich people can just buy them whenever they want.
How do performers benefit from scalping?
The price tickets sell for will be higher if scalping exists. Demand increases for 2 reasons:
1 - I’m more likely to buy a ticket or pay a higher price if there’s a chance of turning a profit if I can’t go.
2 - Speculators are more likely to buy unused inventory if they can turn a profit. This increases total tickets sold. (Scalpers get paid for taking risk)
I’m not defending this. I’ve given up on concerts for my favorite larger bands due to sticker shock.
All of your points apply to performers who may not sell out, so scalpers take risk, you may buy more, speculators may soak up what would go unused.
But consider Ms. Swift. All of her shows sell out, period. Face value tickets are maybe $400 max, and resell for $2000+. I don’t think she sees any benefit from scalpers. Ditto any performer that is in very high demand and certain to sell out and have unmet demand.
> I don’t think she sees any benefit from scalpers.
If a ticket sells for $2k then the platform gets some massive portion of that (like $400?) - are you sure some of that doesn't make its way back to the artist, at least on the primary sale platform? I would be rather surprised if it didn't.
In addition to what others say, the potential for profiting later increases the initial price.
Think of it this way… let’s say two identical companies are going to IPO. Company one you can sell the shares for a profit later if you like. Company two you can only sell for the price you bought.
Which will have the higher IPO price?
They get a cut of the tickets live nation puts on the resellers site.
Not a lawyer but here's how it works:
Illegal usually means there's a law forbidding it.
Tickets are usually governed by the Terms and Conditions (Contract) between original purchase.
It's already possible for the terms to forbid resale.
So as it stands it's possible to sell untransferable tickets. And those who sell such tickets are in breach of contract, but are not breaking a law.
What would 'making reselling tickets illegal' entail, a law that makes selling transferable tickets illegal? That would be a very weak position. A law that upgrades the resale of untransferable tickets to a crime? Again a very weak position.
I contend that people that suggest and write laws should learn about actual law.
IANAL, but if you enter a contract with the intent to violate it, is that legal? My understanding is that it's technically illegal (only civil perhaps, but still illegal), the impracticality of enforcement notwithstanding. Also, I have no idea if the contract for a ticket "sale" is really considered a contract for the purposes of such laws.
>but if you enter a contract with the intent to violate it, is that legal? My understanding is that it's technically illegal (only civil perhaps, but still illegal), the impracticality of enforcement notwithstanding.
On the first matter, I'm not sure, it might be fraud, which can be civil or criminal if there's a specific law that defines criminal penalties.
Again I guess the proposal could be that a law specifies that the resale of tickets is a so and so crime (misdemeanor?) and carries a penalty of X. We are steelmanning the argument here, and it still sounds quite untenable.
On the civil front, I can see how the intent to breach a term might be relevant, but I can also see how it might be irrelevant, in the sense that the breaching party would be forced to remedy the damages of the breach, no more no less. How would the intent to breach a term increase or reduce the damage caused by the breach if so?
>Also, I have no idea if the contract for a ticket "sale" is really considered a contract for the purposes of such laws.
On the second matter, it really is. The layman perception of a contract is usually a formal document that needs to be signed, whereas in no legal systems that I know of are these actual elements of a contract. In most legal systems a contract is a much broader concept: a private agreement between two parties, with the main defining elements being offer, acceptance and consideration. Most if not all trade transactions are contracts, they include the main elements.
> On the second matter, it really is. The layman perception of a contract is usually a formal document that needs to be signed, whereas in no legal systems that I know of are these actual elements of a contract. In most legal systems a contract is a much broader concept: a private agreement between two parties, with the main defining elements being offer, acceptance and consideration. Most if not all trade transactions are contracts, they include the main elements.
Note the layman perception wasn't why I was doubting this; I'm aware not all contracts are that formal. The reason was I don't know if this is considered a sale or not, and whether other principles apply in that case (like first sale doctrine) and if they might somehow override this.
Oh interesting.
I'm not sure if you question whether the first sale or the latter resale might not be contracts.
But in either case, I believe both them to be. It's similar to a sale of a stolen good with an unaware purchaser.
It's a contract on two counts. First, the contract is not void, the subject is not illegal in itself, the seller would just fail to fulfill their end.
Second even if a contract would potentially be voidable, I would argue it is a contract until a judgment voids it, this is a bit subjective, ontological and inconsequential for cases where the judgment would be certain like a contract for stealing, but the more borderline the case is, the more relevant it is, a contract about a complex legal issue that might be or might not be voided with p=0.5 is still a contract to me. Of similar value to a contract about a good of stochastic value, like an option, or an asset that may have been stolen with p 0.5
For StubHub to have insider dealing isn't so surprising, but I am shocked at how brazenly and openly it's occurring. Nothing covert or concealed, just the CEO of a marketplace openly admitting that they run a hedge fund that resells scalped goods on that marketplace while keeping other scalpers off the platform.
no, it gets more layers.. a quick search says "Through its affiliate Colloquy Capital, StubHub helps bankroll other mass ticket scalpers by providing short-term financing based on expected future sales, further inflating the volume of professional resellers on the platform." (I have no direct knowledge of these participants)
welcome to america 2026. where it's not only encouraged but expected that you're lying, cheating, and stealing your way to the top.
2026? As if stubhub/ticketmaster only materialized after trump2?
Ticketmaster sure but back in the day I could get tickets for a song on stubhub. That seems to be a relic of the past and the resale ticket marketplace is barely less than face value.
I don’t really understand the outrage over scalpers. Isn’t this just normal market behavior? Is a retailer that buys things and sells them with a markup a scalper?
People seem to be willing to pay crazy prices for events.
>Is a retailer that buys things and sells them with a markup a scalper?
If you bought all of the food then offered the food at 10x the prices, we'd be outraged with you, yes.
Stakes are lower because it's a luxury good, not food, but it's the same idea.
There is a reason this doesn't work in general though.
If you bought up all the food, farmers would raise prices until either you couldn't afford to do that anymore or eventually there is a splurge of new farmers taking advantage of all your free money until you run out of money. It could maybe work in times of famine where the government introduces price controls or rationing; it does not work in normal times.
For black markets (which is essentially what scalping is) to work, there has to be some shortage of a good that is priced artificially low. It works with concerts because singers can only sing so much but they also don't want to make the concert so unaffordable that only millionaires can go. There are very few situations like that. In most industries you would just increase prices until supply equals demand.
This makes sense, but I'd contend it's all the more reason for outrage: not only are scalpers doing what they're doing anyways, but they're destroying the (totally legitimate and sympathetic!) reason for "artificially" lowering the price to begin with.
I should note that outrage doesn't seem to land on the people who buy from scalpers, which is...probably correct? Seems easier to say "don't break the contract" to scalpers instead of fans who are just able to pay more.
Onion futures act.
This is the reason that businesses don't try to monopolize the food industry. It's not competition as we just saw from the egg industry. The government gets pushed back from the masses pretty quickly on food related issues.
Yes, although i would argue that a cartel suppressing supply is a different mechanism than what is happening with scalpers.
The onion futures thing is kind of interesting, because it was essentially the opposite of a scalper - they didn't try and buy all the onions to make price go up, they did it to crash the price of onions so that their short positions would pay off. Still a fair counter example to the idea that the market would self correct by itself.
People not trying to monopolize the food industry is a bit of an american centric view, e.g. Canada had a government mandated wheat monopsony for a long time. I think australia had something similar. I'm sure there are plenty of historical food monopolies. They of course couldn't be too greedy or its off with their head.
>This is the reason that businesses don't try to monopolize the food industry. It's not competition as we just saw from the egg industry. The government gets pushed back from the masses pretty quickly on food related issues.
But you provided your own counterexample with eggs?
Note they didn't monopolize it, so I guess that was correct. They did form a cartel that did cause a lot of political issues, and if we had a functioning government would have been a very risky bet.
I really doubt you can’t buy the whole harvest of a farmer if you pay for the whole thing. You can probably buy it for less than normal
But how much less then normal.
Like the logic here is the scalper company buys all the crops and then resells at an exorbitant mark up because everyone needs to eat, but then the market price becomes what the scalper is selling for. Would the farmer really leave that much on the table? They may be willing to give some discount to sell all at once, but there comes a point where it is no longer worth it to them to do so. The whole scalping thing only works if you can buy low sell high, but if you sell high the people you are buying from will start to notice that they too can sell higher to other people.
Concerts are different because there are brand reasons to keep prices low. Farmers aren't a charity, they aren't going to sell significantly below market price just for the good vibes.
There is a case where farmers don't have the power to fight against big corporations. One example in US that I know of is roundup pesticide issue.
This makes me think that it is possible for corporations to suppress the price on the farmer side and fix it on the consumer side.
This happened to at least some crops in Turkey in the past, for example farmers were selling hazelnut for 15TRY/kg and you could only buy it for 100TRY/kg in big cities. Farmers were actually complaining that they couldn't even make a profit from growing hazelnut.
Corporations would like to do this with even water if given the chance as Nestle CEO was saying himself in a famous video.
So they would for example do it with bread and starve people in the process if it means they can make money. And I think that they could easily do this for example in US if they didn't correctly fear that people would force the goverment to smash them.
Also the selling format doesn't have to be the crop itself. For example they make nutella from hazelnut. So farmers can't associate it directly with their selling price even though it is obvious that they are getting shafted.
Another possibility is the farmer selling 80% to the corporation for the normal price and then selling the rest at a massive markup so both profit. Same thing that is happening with ram manufacturers. Then the whole thing is justified as free market and only the consumers get hurt because in the end you have to buy RAM. Or equally the corporation could pay the farmer a 20% bonus and still make 80% extra profit on end consumer. Farmer might not object if the scheme is dependant on the corporation.
It's not a simple buy/sell marketplace. There's no recourse for fans who purchase a confirmed ticket, only to find that the seller "doesn't have them" and see the same ticket relisted for higher if the price jumps. Stubhub prioritize these scalper relationships and doesn't meaningfully protect its buyers from getting screwed over.
The ultimate customers would certainly pay more than the face price which is what the scalpers pay, yet the scalpers get all the tickets. This is abnormal market behaviour.
What’s normal?
An auction would be the obvious solution, and I guess you could argue it effectively is an auction, just with initial sales that pretend to be a race and are actually sold to speculators who then run the auction.
If reselling is allowed a market is created, pushing up prices. But that extra money doesn't go towards anyone involved in the creation of the product! It goes towards scalpers. Though there's a bit of price discovery value....
Without reselling scalpers have no reason to scoop up the tickets.
So if you prevent reselling... then concertgoers just have to do a lottery or something for the scarce resource and people who aren't interested in the concert have no reason to buy the tickets! Just a better experience for everyone except for the scalpers and I guess Taylor Swift cuz she won't know the price ceiling for tickets.
I suspect we'd see management companies trying out auctions and upgrade bidding not long after a resale prohibition passed. Or they'd reinvent the fare class system airlines use.
A lottery is the only fair option. Market pricing is exactly as fair as capitalism in general.
You are describing rent-seeking behavior: middle men who add no economic value yet inject themselves into transactions.
Yes, this is “normal” in the sense that it is common. It is “normal” in the same way that cancer is “normal”.
No, this is not “normal” in the sense of being behavior the government should just tolerate. It is in the same category of market failures as monopolies and externalities.
So is all demand-based pricing rent-seeking? Like selling gold or a house or any other scarce good for more than you paid?
You are mixing things up. Just pricing your product based on demand does not necessarily make you a scalper. It's the fact that you are not the producer of the good itself that makes you one.
To use the real estate example, there is a difference between a developer selling a house it built, and an investor selling a house that he bought when it was cheaper.
I think that if you poke at the term "rent-seeking" with the definition of "middle men who add no economic value yet inject themselves into transactions", you'll just end up arguing about what "adding economic value" means.
That said...if you can do that, you'll probably find that some additions of economic value are far more defensible than others, so it shouldn't all be flattened in the manner you're suggesting.
I mean, scalpers add economic value, right?! They allow (wealthier) people who didn't stand in line at the right time to have a chance to purchase a ticket!
Yeah. “Rent-seeking” is just a fancy rhetorical term for “people doing things I don’t like with money”.
Subscriptions are rent-seeking. Loans are rent-seeking. Spending millions in capital to buy a building and renting apartments for thousands? Rent-seeking. Copyright and patents, for sure, unless an AI company is involved in which case copyright is noble and must last a thousand years, because AI companies are rent-seeking.
No, too reductive. Rent-seeking is when people manipulate a situation to charge money without providing value themselves. Landlords are rent-seekers to the extent that they don’t do much, they mostly just own property - typical rent is many, many times the value of someone looking after the maintenance and building insurance for you (and anything else you want to argue a landlord does). The housing supply is naturally quite limited so the market doesn’t self-correct.
And anyway, if enough people don’t like the things people are doing with money, we can stop them from happening! So a pretty odd gotcha, to me.
I mean, you saying that landlords don't do much is the exactly what I meant when I said "arguing about what 'adding economic value' means"
>typical rent is many, many times the value of someone looking after the maintenance and building insurance for you
I'm curious about this.
I'm not sure if there's a universal rule of thumb, but it's something like "expect 1-4% of the home's value in maintenance every year" - $4,000 to $16,000 on a $400,000 home. Take the lowest end of that - $333/month in expected maintenance a year. Add $100/month for home insurance.
You're claiming "many, many times" $433 a month in that scenario? Given more recent interest rates and the uptick in "maybe you should rent for awhile, actually" articles/videos I've seen, this doesn't strike me as plausible...
Certainly where I live, rents are many times that, yes. If landlords really were just charging cost plus a modest profit (despite that I really object to any profit on housing) I wouldn’t be outraged.
okay, so like...7x that $433 figure? $3000 a month? If a mortgage + escrow payment on a 400k house is around $2500/month, a comparable rent is $5500 a month?
Where do you live, if I may ask? I live in a reasonably sane market which might be why this isn't clicking for me.
Not sure what the intent behind this reply is but - I guess it's strictly true and I think we're agreeing in some sense, but to be clear I think it is totally fine to say that scalpers are doing things I don't like with money, and I'd like to see their excesses curbed.
The outrage is over the apparent collusion between a platform that argues it only facilitates a fan-to-fan marketplace, and a hedge fund run by the platform's CEO that sells a massive volume of resale tickets. This is definitely not on the spirit of competition regardless of it's illegal or not
Yes it's rational market behavior. But it bothers people for such a blatantly worthless middleman to capture all consumer surplus for themselves while providing zero value.
Which is to say, “perfectly efficient market” is not an end-goal in-and-of itself for most people
We've known for years that ticketmaster scams their tickets on StubHub. Concerts selling out instantly, to only see tons of tickets on stub...
I'm sure if they get shut down, they'll just do it again under a different name, but they can't pretend it's a small handful of scalpers when they're the ones doing it themselves.
i see this less as a pricing or free market issue and more of a governance concern. trading against your own consumer base isn't free market.
Scummy behavior, but customers are also tacitly endorsing high prices when they pay $1500 for a Taylor Swift (or name your artist) ticket.
You're not entirely wrong, but the root issue is artists not charging the market clearing price for tickets. If you're selling something worth $1000 for $200, you shouldn't be surprised arbitrageurs pop up to take advantage.
> You're not entirely wrong, but the root issue is artists not charging the market clearing price for tickets.
Because there is value for the artist in maintaining the perception of accessibility.
My (probably mis-)understanding of StubHub/Ticketmaster is that they're serving as sin eaters / reputation shields for the artists:
Phase 1:
Phase 2:That's also easy to solve. Allocate discounted tickets by lottery and bind to a name (think airline tickets). If for whatever reason they can't make it, the ticket goes back into the lottery pool. Or maybe if they want the tickets to be transferable, you can put in some nominee ticket holders (eg. max 3 people you can transfer it to).
I understand the arguments against charging the market clearing price, but I do just think it would be very funny for Taylor Swift to sell out a concert charging $10k+ a ticket.
Those arbitrageurs who extract payment without adding value should not be surprised when people are upset and demand changes.
This argument has been made a lot on this site, mainly by people who don’t understand live music.
What is it that they don't understand about live music?
Omg I hate them so much