The Ticket Broker Business

Getting event tickets from a ticket broker can be a vexing event especially if you have never employed the services of one previously.

More often than not ticket brokers will almost always request an amount for the tickets they sell that is higher than the face value of their ticketsl. The rationale behind this is that box offices, normally thought of as principal ticket sellers, do not experience any special pricing relationships with ticket brokers. Ticket brokers receive no markdown on the tickets they acquire nor do they receive any other special attention. Because they receive no special pricing arrangement, ticket brokers frequently must work extremely hard to secure good seats for the tickets they sell, which accordingly raises the price of their tickets.

In addition to buying tickets from the box office, ticket brokers frequently purchase tickets from other special individuals who may possess season tickets or happen to possess high-quality tickets to a special event. Like anyone who has been in business for any extended length of time, ticket brokers habitually boast many years worth of contacts with such persons as well as within their own industry. In such cases the seller is commonly hoping to earn a profit and sells the tickets to the ticket broker at an inflated price. All of these dynamics, as well as conventional market conditions affect the resale price of a ticket.

The good news is that when obtaining tickets from a ticket broker, you mostly receive many more seating options to pick from, which accordingly permit you to choose the particular seat location or budget that suits you. Additionally a ticket broker will from time to time enjoy tickets to events that are sold out or don’t even go on sale to the general public.

The web has become a prominent playing field for purchasers and sellers of event tickets in the extremely competitive $10-$12 billion event ticket market — particularly for sold-out sports games and extremely popular music concerts and theatre shows. Called the secondary event ticket market, this is the part of the event ticket market that includes tickets bought by specialized ticket brokers as well as extras that season ticket holders can’t use. People estimate the size of the secondary event ticket market to be at about $2 billion although the estimates of its size vary widely.

A huge market with tons of small players, the event ticket market was a great match for the web around 1999, and as we fast-forward to 2007 hundreds of mom-and-pop electronic storefronts, auction-based websites and online ticket broker sites now resell secondary event tickets. While many of these are smalltime vendors, a few major players also exist.

As one would expect, eBay members are also in on the act and in a gigantic way. In fact the biggest players of all in the secondary event ticket market are the members of eBay, which as a group sell more than $300 million in event tickets annually and boast by far the biggest community of purchasers and sellers. But members of eBay also offer the biggest potential for fraud. Like everything else sold on eBay, stories abound of people getting ripped off by purchasing fake tickets. Although buyers can check out how others have rated a given seller, eBay is largely operated on an honor system and offers fertile ground for fraud.

To work around this ticket fraud problem, some secondary event ticket brokers offer 100% guarantees. If you get a bad ticket, they replace it for free. Other secondary event ticket brokers take possession of the event tickets and verify them before listing the event tickets as being available for sale.

World wide web event ticket sales are growing as consumers become more comfortable shopping on the web. One source estimates that online event ticket sales will grow by 27 percent this year. Even professional sports teams are in on the act. The demand for Chicago Cubs tickets is so high that the team set up their own secondary event ticket market with a team-owned ticket broker.

Reselling event tickets, otherwise known as “scalping,” is not against the law. Reselling event tickets, however, is often against the law where the event tickets are sold in the immediate area of an event.

Thirty-eight states, including California, have no meaningful limitations on the resale of event tickets. In twelve states, the resale of event tickets is controlled. In about half those states, ticket brokers who take inventory must register with the state. In the remaining six states, event tickets cannot be resold above a maximum price premium. In these states a broker might be allowed to charge 20 percent more than the event ticket’s face value at a maximum.