Existing law provides for the comprehensive regulation of ticket sellers, including prohibiting a ticket seller from contracting to sell or accepting payment for tickets unless the ticket seller has lawful possession of the ticket; has a contractual right to obtain the ticket; or informs the purchaser the seller does not have possession of the tickets, has no contract to obtain the offered ticket, and may not be able to supply the ticket at the contracted price, as specified.

This bill would prohibit the operator of an entertainment facility and a primary ticket seller from entering into a contract that provides for the primary ticket seller to be the exclusive ticket seller for the operator of the entertainment facility. The bill would prohibit threatening or seeking to enforce such a provision or to otherwise penalize an operator of an entertainment facility for entering into an agreement with another primary ticket seller.

Existing law defines a primary contractor as the person or organization who is responsible for the event for which tickets are being sold. Existing law declares that regulation of ticket sellers does not apply to a primary contractor or seller of tickets for the primary contractor operating under a written contract with the primary contractor.

This bill would declare that the provisions of this bill apply to a primary contractor and a seller of tickets for the primary contractor operating under a written contract with the primary contractor.

Existing law declares that violations of statutory regulations of ticket sellers are punishable as a misdemeanor.

This bill would make entering into a contract that provides for the primary ticket seller to be the exclusive ticket seller for the operator of the entertainment facility punishable as a misdemeanor. Because the bill would expand the scope of an existing crime, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law provides for the comprehensive regulation of ticket sellers, including prohibiting a ticket seller from contracting to sell or accepting payment for tickets unless the ticket seller has lawful possession of the ticket; has a contractual right to obtain the ticket; or informs the purchaser the seller does not have possession of the tickets, has no contract to obtain the offered ticket, and may not be able to supply the ticket at the contracted price, as specified.

This bill would prohibit the operator of an entertainment facility and a primary ticket seller from entering into a contract that provides for the primary ticket seller to be the exclusive ticket seller for the operator of the entertainment facility. The bill would prohibit threatening or seeking to enforce such a provision or to otherwise penalize an operator of an entertainment facility for entering into an agreement with another primary ticket seller.

Existing law defines a primary contractor as the person or organization who is responsible for the event for which tickets are being sold. Existing law declares that regulation of ticket sellers does not apply to a primary contractor or seller of tickets for the primary contractor operating under a written contract with the primary contractor.

This bill would declare that the provisions of this bill apply to a primary contractor and a seller of tickets for the primary contractor operating under a written contract with the primary contractor.

Existing law declares that violations of statutory regulations of ticket sellers are punishable as a misdemeanor.

This bill would make entering into a contract that provides for the primary ticket seller to be the exclusive ticket seller for the operator of the entertainment facility punishable as a misdemeanor. Because the bill would expand the scope of an existing crime, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

 THIRD READING  

Bill No: SB 829

Author: Wilk (R), et al.

Amended: 5/1/23

Vote: 21

SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 11-0, 4/17/23

AYES: Roth, Nguyen, Alvarado-Gil, Archuleta, Ashby, Becker, Dodd, Eggman, Glazer, Niello, Wilk

NO VOTE RECORDED: Smallwood-Cuevas, Wahab

SENATE JUDICIARY COMMITTEE: 9-0, 4/25/23

AYES: Umberg, Wilk, Allen, Ashby, Durazo, Laird, Min, Niello, Wiener

NO VOTE RECORDED: Caballero, Stern

SENATE APPROPRIATIONS COMMITTEE: 6-0, 5/18/23

AYES: Portantino, Jones, Ashby, Bradford, Seyarto, Wiener

NO VOTE RECORDED: Wahab

SUBJECT: Ticket sellers: exclusivity

SOURCE: Author

DIGEST:

This bill prohibits an exclusivity clause in a contract between a ticket seller and primary entertainment facility operator, where the primary ticket seller is the exclusive ticket seller for the operator of the entertainment facility, as specified. States this bill will not require an operator of an entertainment facility to enter into an agreement with a primary ticket seller or require that an operator of an entertainment facility have an agreement with multiple primary ticket sellers, where an entertainment facility does not include an amusement park or fair grounds.

ANALYSIS:

Existing law:

1. Requires that a ticket seller, prior to sale, disclose to the purchaser by means of description or a map, the location of the seat or seats represented by the ticket or tickets. (Business & Professions Code (BPC) § 22502)
2. Requires the ticket price of any event, which is canceled, postponed, or rescheduled to be fully refunded to the purchaser by the ticket seller within 30 calendar days of cancellation. States the ticket price of an event which is postponed, rescheduled, or replaced with another event at the same date and time, shall be fully refunded to the purchaser by the ticket seller upon request within 30 calendar days of the refund request. Defines a rescheduled event to include a canceled occurrence of a recurring event for which the purchaser is offered the opportunity to attend another, materially identical occurrence of the same event at a different date or time. Permits a local jurisdiction to require a ticket seller to provide a bond of up to $50,000 to provide for any refunds that may be required. (BPC § 22507)
3. Requires any partial or full deposit received by a ticket seller on a future event for which tickets are not available to be refundable except for a service charge of not more than 10% until tickets for the event are actually available. Requires ticket sellers to maintain records of ticket sales, deposits, and refunds. (BPC § 22506)
4. Requires a ticket seller to disclose that a service charge is imposed by the ticket seller and is added to the actual ticket price by the seller in any advertisement or promotion for any event by the ticket seller. (BPC § 22508)
5. Requires ticket sellers to maintain records of ticket sales, deposits, and refunds. (BPC § 22501)
6. Defines “ticket seller” as any person who for compensation, commission, or otherwise sells admission tickets to sporting, musical, theatre, or any other entertainment event; and provides specific exclusions from that definition, including, any person who sells six tickets or less to any one single event, provided the tickets are sold off the premises where the event is to take place, including, but not limited to, designated parking areas and points of entry to the event. (BPC §§ 22503-22504)
7. States a ticket seller must have a permanent business address from which tickets may only be sold and that address shall be included in any advertisement or solicitation and will be duly licensed as may be required by any local jurisdiction. States a violation of this above provision constitutes a misdemeanor punishable by imprisonment in a county jail not exceeding six months, or by fine not exceeding two thousand five hundred dollars ($2,500), or by both. States that any person who engages, has engaged, or proposes to engage in a violation of the above is liable for a civil penalty of not more than two thousand five hundred dollars ($2,500) for each violation, as specified. States that each ticket sold or offered for sale in violation of the above shall constitute a separate violation, and that the remedies provided are cumulative to each other and to the remedies or penalties available under all other laws of this state, as specified. (BPC § 22500(c))
8. Provides for the comprehensive regulation of ticket sellers, including prohibiting a ticket seller from contracting to sell or accepting payment for tickets unless the ticket seller has lawful possession of the ticket; has a contractual right to obtain the ticket; or informs the purchaser the seller does not have possession of the tickets, has no contract to obtain the offered ticket, and may not be able to supply the ticket at the contracted price, as specified. (BPC § 22502.1)
9. Defines a primary contractor as the person or organization who is responsible for the event for which tickets are being sold. (BPC § 22503.5)
10. Declares that regulation of ticket sellers does not apply to a primary contractor or seller of tickets for the primary contractor operating under a written contract with the primary contractor. (BPC § 22503.5)
11. Declares that violations of statutory regulations of ticket sellers are punishable as a misdemeanor. (BPC § 22505)

This bill prohibits an exclusivity clause in a contract between a ticket seller and primary entertainment facility operator, where the primary ticket seller is the exclusive ticket seller for the operator of the entertainment facility, as specified. States this bill will not require an operator of an entertainment facility to enter into an agreement with a primary ticket seller or require that an operator of an entertainment facility have an agreement with multiple primary ticket sellers, where an entertainment facility does not include an amusement park or fair grounds.

Background

A Recent Catalyst: Taylor Swift. Tickets for Taylor Swift’s concert in years were set to go on sale on November 18, 2022. Pre-sale for tickets for select fans with certain corporate partnerships began as early as November 1, 2022. Ticketmaster and at least one tour date in Nashville noted that ticket prices could fluctuate based on demand at any given time. On November 15, during presale, Ticketmaster’s website crashed following millions showing up to buy Swift’s concert tickets. After Ticketmaster determined there were at least questions as to whether there were enough tickets to meet buyer demand, Ticketmaster also cancelled its general ticket sale that was supposed to open on November 18, 2022. This meant that fans who otherwise would have paid hundreds of dollars to see Swift in concert were left to purchase them off of resale websites, where they were going for thousands of dollars (some even around $20,000). According to Forbes, Ticketmaster’s failure was caused in large part due to bot attacks, but also due to the failure of leadership to engage in meaningful practices and philosophies among employees to help them respond in a crisis.

US Judiciary Committee Hearing. On Tuesday, January 24, 2023, the US Senate Judiciary Committee had a hearing on the issue, focusing specifically on the Live Nation and Ticketmaster’s 2010 merger. Leading up to the hearing, Senator Klobuchar told Rolling Stone that she believed Live Nation Entertainment was a monopoly because, as a company, it has 70% of tickets for major concern venues; venue operators said that they were concerned about not getting Live Nation’s shows at their venues if they don’t use Ticketmaster; the company utilized exclusivity deals that can last 3-7 years; hidden fees, some costing up to 75% of a ticket’s face value; and Live Nation is owning more and more venues, which was not the case in 2010 when the merger occurred. In the January 2023 hearing, Senators questioned Live Nation and raised potential solutions to the problems above, including non-exclusivity of contracts between venues and ticketing agents, placing price caps on tickets, and working more closely with the FTC to stop speculative ticket sales. National media has been following the story since October and November of 2022.

Efforts to Respond to Consumer Protection Issues. Among other steps taken to drive more consumer-centric responses to the experiences highlighted above, consumer advocacy groups launched a campaign culminating in The Ticket Buyer Bill of Rights. According to its website, The Ticket Buyer Bill of Rights “is a set of principles the nation’s leading consumer advocacy groups and others believe should serve as a framework for ticketing legislation that can improve the live events ticketing market that serves millions of fans each year. The Bill of Rights features four pillars: The Right to Transferability, where ticketholders decide how to use, sell or give away their tickets if they wish and not the entity that previously sold the tickets; The Right to Transparency, which includes all-in pricing and disclosures of relevant information for the purchasing decision;  The Right to Set the Price, so that companies who originally sold the tickets cannot dictate to fans for what price they can or cannot resell their purchased tickets, and, lastly; The Right to a Fair Marketplace, where fans compete with actual humans, not illegal software bots, for tickets.”

Specifically, The Ticket Buyer Bill of Rights includes:

• “All-in, upfront pricing – no surprise fees at checkout;
• Mandating primary ticket-selling companies to report all ticket bot activity to the appropriate authorities;
• Disclosure of how many tickets are available to the general public at the time of “on sale”;
• Clear and conspicuous disclosure when a ticket seller does not have a ticket in their possession or contractual right;
• The guarantee of unrestricted transfer of all tickets; and
• A prohibition on deceptive URLs and other fraudulent reseller practices.”

This framework is meant to provide guidance for legislative action to ensure consumer protection in ticketing sales. At the state level, legislatures have been taking action to ensure consumer protection with respect to ticket sellers, particularly Live Nation entertainment.

In June 2022, the New York Legislature passed a bill to increase transparency in the ticket-buying process for live events like concerns and plays, whereby ticket sellers and resellers must disclose all fees upfront so that prices do not change during a transaction (for instance, in last step in checkout). Additionally, the New York Legislature introduced a bill in 2021 that would have instituted civil penalties for using ticket-purchasing software; required an online resale market to post the ticket price in advertisements or offers of resale; and required ticket prices to be disclosed prior to a customer purchasing a ticket, among other things.

In Colorado, a bill has been introduced this year that would prohibit “speculative ticketing,” or the process by which brokers sell tickets they do not possess. The bill would also require online companies to clearly display total, inclusive prices of all service charges and other fees included in the purchase of the ticket. According to The Denver Post, the bill also “expands the definition of deceptive trade practices to include the use of automation to buy tickets or circumvent limits, selling tickets without being upfront about all the fees, and increasing ticket prices once they have been selected.”

Comments

According to the author, this bill “seeks to end the monopoly that is plaguing the live entertainment business across the world and will prevent ticket sellers from utilizing exclusivity clauses in their contracts with venues. Additionally it will create an open market where different sellers can compete. Preventing this clause will provide venues the autonomy to collaborate with other sellers without the fear of retaliation from large ticket sellers, while still providing them with the option to partner with however many sellers they would like.”

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

According to the Senate Appropriations Committee, the bill will result in unknown court workload cost pressures to adjudicate additional misdemeanor offenses for violations of the prohibitions established by this bill.

SUPPORT: (Verified 5/19/23)

Consumer Federation of California

OPPOSITION: (Verified 5/19/23)

Broadway San Diego
Hollywood Pantages
Nederlander Concerts

ARGUMENTS IN SUPPORT: Supporters argue that it is time to handle the issue of monopolies in the ticketing industry and better protect consumers, and that an exclusivity clause as presented in this measure would help in those efforts.

ARGUMENTS IN OPPOSITION: Opposition say that bill proponents state they are protecting businesses from not being forced into exclusive relationships. However, opposition suggests this is unnecessary because they say they would not enter into an exclusive relationship without a contract establishing the terms and responsibilities of both parties.

Prepared by: Dana Shaker / B., P. & E.D. /

5/20/23 13:09:44

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2023 - 2024 Regular Session

SB 829 (Wilk) - Ticket sellers: exclusivity

Bill Summary:

SB 829 prohibits exclusivity contracts for ticket sales between venues and ticket sellers, as specified.

Fiscal Impact:

Unknown court workload cost pressures to adjudicate additional misdemeanor offenses for violations of the prohibitions established by this bill (Trial Court Trust Fund, General Fund).

Background:

Ticketing for major sports events, concerts, and other live entertainment has drawn many critics for a variety of anti-consumer practices. This includes speculative sales, where ticket sellers sell tickets they do not actually have at the time of the sale.

One practice is the use of automated software or “bots” to rapidly buy up tickets to in-demand events that the person deploying the bots then turns around and sells at a hefty markup. This has been such a nefarious process that the federal government passed a law in 2016 to stop people from employing this scheme, the Better Online Ticket Sales Act (BOTS Act). The BOTS act prohibits the circumvention of a security measure, access control system, or other technological control measure used online by a ticket issuer. The Act also prohibits selling or offering to sell an event ticket obtained through such a circumvention violation if the seller participated in, had the ability to control, or should have known about the violation. The act applies to event tickets for public concerts, theater performances, sporting events, and similar activities at venues with seating capacity of over 200.

The lack of healthy competition in the ticket selling world is also a primary concern of consumer advocates and ticket buyers. The worst culprit according to many is Live Nation Entertainment. In 2010, the company, which is a massive events promoter and venue operator, merged with Ticketmaster, a ticket sales giant. Together they control an estimated 70 percent of the ticketing and live event venues market.

The near-monopoly power has created concerns among many that Live Nation will retaliate if you go with a ticketing company other than their Ticketmaster operation, and in many cases exclusivity agreements require Ticketmaster to be used.

Proposed Law:

• Prohibits a contract between an operator of an entertainment facility and a primary ticket seller from providing for the primary ticket seller to be the exclusive and sole primary ticket seller for the operator of the entertainment facility.
• Makes it unlawful to threaten or to seek to enforce a provision made unlawful by this bill or to otherwise penalize an operator of an entertainment facility for entering into an agreement with another primary ticket seller.
• Provides that a waiver of a provision of this bill is contrary to public policy and thus is void and unenforceable.
• Clarifies that an operator of an entertainment facility is not required to enter into an agreement with a primary ticket seller and that an operator of an entertainment facility is not required have an agreement with multiple primary ticket sellers.
• Defines “entertainment” to mean forms of entertainment, including but not limited to theatrical or operatic performances, concerts, motion pictures, and athletic competitions including football, basketball, baseball, boxing, tennis, hockey, and other sports, and other forms of diversion, recreation or show. Specifies that the term does not apply to forms of entertainment at an amusement park or fairground.
• Defines “entertainment facility” to mean a publicly or privately owned place of entertainment including, but not limited to, an arena, auditorium, concert hall, live performance venue, museum, racetrack, stadium, theater, or other place where entertainment events are presented for a price of admission. Specifies the facility does not have to be used exclusively for entertainment events, and that the term does not apply to an amusement park or fairground.
• Defines “operator” to mean any person who owns, operates, or controls an entertainment facility.
• Defines “primary ticket seller” to mean a primary contractor, ticket seller, or agent of the primary contractor or ticket seller that engages in the primary sale of tickets for an event.

Related Legislation:

SB 785 (Caballero, 2023) recasts the laws governing ticket sellers, including creation of various categories of ticket sellers with different provisions applying to each. SB 785 is pending in this committee.

AB 8 (Friedman, 2023) recasts the laws governing ticket sellers, including ensuring transparent pricing, ending restrictions on the transfer of tickets once they are purchased, and require ticket sellers to provide printed tickets at the same price as charged for electronic tickets for cellphone-free events, as specified. AB 8 is pending in the Assembly Appropriations Committee.

Staff Comments:

It is unknown how many prosecutions for misdemeanor violations will be brought as a result of this bill. However, it generally costs about $1,000 to operate a courtroom for one hour. Consequently, if the additional misdemeanor cases take 50 or more hours of court involvement across the State, the cost pressures of this measure would surpass this committee’s Suspense File threshold. Misdemeanor charges carry the potential for incarceration, therefore certain defendants’ rights are attached to the proceedings. These include the right to a jury trial and the right to counsel (at public expense if the defendants are unable to afford the costs of representation) which could lead to lengthier and more complex court proceedings. Although courts are not funded on the basis of workload, increased staff time and resources may create a need for increased funding for courts from the General Fund (GF) to perform existing duties. Numerous trial court operations are funded through the imposition and collection of criminal fines and fees. However, the Legislature has reduced and eliminated criminal fines and fees over the past decade. As a result, the 2023-24 proposed budget anticipates an ongoing annual allocation of $109.3 million from the GF to backfill declining revenue to the Trial Court Trust Fund.

-- END --

SENATE JUDICIARY COMMITTEE

Senator Thomas Umberg, Chair

2023-2024 Regular Session

Bill No: SB 829 (Author:Wilk)

Version: February 17, 2023

Hearing Date: April 25, 2023

Fiscal: Yes

Urgency: No

Consultant: CK

SUBJECT

Ticket sellers: exclusivity

DIGEST

This bill prohibits exclusivity contracts for ticket sales between venues and ticket sellers.

EXECUTIVE SUMMARY

As the BeyHive knows too well, there are very real problems in the world of ticket buying. Some fans saw ticket fees for Beyoncé’s most recent tour go as high as $550 and others amount to over 25 percent of the ticket price.^[1] The domination in the live venue/ticketing world of Live Nation/Ticketmaster showed fans who Run the World. In addition to this infamous ticket buying debacle, most consumers have faced the well-documented issues with purchasing tickets to sporting events, concerts, and other live entertainment. This includes exorbitant and hidden fees, nearly instantaneous ticket sellouts followed by price gouging on the secondary market, and websites that attempt to pass themselves off as the primary ticket seller. Fingers are pointed in all different directions as to who or what is responsible.

This bill attempts to address one particular concern, the lack of competition in ticket sales. With the merger of Live Nation, a leading venue operator, and Ticketmaster, the leading ticket seller, consolidation has worked against consumers. The bill prohibits a contract between an operator of an entertainment facility and a primary ticket seller from providing for the primary ticket seller to be the exclusive and sole primary ticket seller for the operator of the entertainment facility. The bill is author sponsored. There is no known support or opposition. The bill passed out of the Senate Business, Professions, and Economic Development Committee on an 11 to 0 vote.

PROPOSED CHANGES TO THE LAW

Existing law:

1. Defines a ticket seller as any person who for compensation, commission, or otherwise sells admission tickets to sporting, musical, theatre, or any other entertainment event. Clarifies that the following are not ticket sellers subject to various sections of the ticket:
   1. an officially appointed agent of an air carrier, ocean carrier or motor coach carrier who purchases or sells tickets in conjunction with a tour package accomplished through the primary event promoter or their agent by written agreement.
   2. any person who sells six tickets or less to any one single event, provided the tickets are sold off the premises where the event is to take place, including, but not limited to, designated parking areas and points of entry to the event.
   3. any primary contractor (defines as the person or organization responsible for the event for which tickets are being sold) or seller of tickets for the primary contractor operating under a written contract with the primary contractor.
   4. any nonprofit charitable tax-exempt organization selling tickets to an event sponsored by the organization. (Bus. & Prof. Code §§ 22503.6, 22504, 22511.)
2. Imposes various requirements on ticket sellers. A violation of any of these provisions constitutes a misdemeanor and may subject the ticket seller to civil liability. These requirements include that tickets sellers:
   1. have a permanent business address from which tickets may only be sold and that the address be included in any advertisement or solicitation, a violation of which constitutes a misdemeanor punishable by imprisonment or a fine not exceeding $2,500 or by both. Provides that a person who engages, has engaged, or proposes to engage in a violation of this specific requirement is liable for a civil penalty not to exceed $2,500 for each violation;
   2. maintain records of ticket sales, deposits, and refunds;
   3. prior to sale, disclose to the purchaser by means of description or a map the location of the seat or seats represented by the ticket or tickets;
   4. make any partial or full deposit received on a future event for which tickets are not available refundable, except for a service charge of not more than 10 percent until tickets for the event are actually available;
   5. disclose that a service charge is imposed by the ticket seller and is added to the actual ticket price by the seller in any advertisement or promotion for any event by the ticket seller;
   6. provide a refund within 30 days for the ticket price of an event which is canceled;
   7. provide a refund, upon request, within 30 days, for the ticket price of an event which is postponed, rescheduled, or replaced with another event at the same date and time;
   8. provide a bond of not more $50,000 to provide for any refunds in a local jurisdiction that requires this; and
   9. disclose in any advertisement or promotion for any event that a service charge is imposed and added to the actual ticket price. (Bus. & Prof. Code §§ 22500-22511.)
3. Prohibits a ticket seller from contracting to sell or accepting payment for tickets unless the ticket seller has lawful possession of the ticket; has a contractual right to obtain the ticket; or informs the purchaser the seller does not have possession of the tickets, has no contract to obtain the offered ticket, and may not be able to supply the ticket at the contracted price, as specified. Authorizes a ticket seller to accept a deposit from a prospective purchaser as part of an agreement that the ticket seller will make best efforts to obtain a ticket at a specified price or price range and within a specified time, provided that the ticket seller informs the purchaser orally at the time of the contract or receipt of consideration, whichever is earlier, and in writing within two days, of the terms of the deposit agreement, and includes in the oral and written notice other required disclosures. (Bus. & Prof. Code § 22502.1.)
4. Prohibits a ticket seller from representing that they can deliver or cause to be delivered a ticket at a specific price or within a specific price range and fail to deliver within a reasonable time at or below or within the price and range of prices stated. (Bus. & Prof. Code § 22502.2.)
5. Specifies that a ticket seller who violated this prohibition and violates 3) above is civilly liable to the ticket purchaser for two times the contracted price of the ticket, in addition to any sum expended in trying to attend the event, and reasonable attorney’s fees and court costs. (Bus. & Prof. Code § 22502.3.)

This bill:

1. Prohibits a contract between an operator of an entertainment facility and a primary ticket seller from providing for the primary ticket seller to be the exclusive and sole primary ticket seller for the operator of the entertainment facility.
2. Makes it unlawful to threaten or to seek to enforce a provision made unlawful hereby or to otherwise penalize an operator of an entertainment facility for entering into an agreement with another primary ticket seller.
3. Provides that a waiver of a provision of this bill is contrary to public policy and thus is void and unenforceable.
4. Clarifies that it does not require an operator of an entertainment facility to enter into an agreement with a primary ticket seller or require that an operator of an entertainment facility have an agreement with multiple primary ticket sellers.
5. Defines the following terms:
   1. “entertainment” means all forms of entertainment including, but not limited to, theatrical or operatic performances, concerts, motion pictures, all forms of entertainment at fairgrounds and amusement parks, and all types of athletic competitions including football, basketball, baseball, boxing, tennis, hockey, and any other sport, and all other forms of diversion, recreation or show;
   2. “entertainment facility” means a publicly or privately owned place of entertainment including, but not limited to, an amusement park, arena, auditorium, concert hall, live performance venue, museum, racetrack, stadium, theater, or other place where entertainment events are presented for a price of admission. The facility does not have to be used exclusively for entertainment events;
   3. “operator” means any person who owns, operates, or controls an entertainment facility; and
   4. “primary ticket seller” means a primary contractor as defined in Section 22503.5, ticket seller, or agent of the primary contractor or ticket seller that engages in the primary sale of tickets for an event.

COMMENTS

1. Ticketing woes: anti-consumer practices and antitrust issues

Ticketing for major sports events, concerts, and other live entertainment has drawn many critics for a variety of anti-consumer practices. This includes speculative sales, where ticket sellers sell tickets they do not actually have at the time of the sale.

One practice is the use of automated software or “bots” to rapidly buy up tickets to in-demand events that the person deploying the bots then turns around and sells at a hefty markup. This has been such a nefarious process that the federal government passed a law in 2016 to stop people from employing this scheme, the Better Online Ticket Sales Act (BOTS Act). The BOTS act prohibits the circumvention of a security measure, access control system, or other technological control measure used online by a ticket issuer. The Act also prohibits selling or offering to sell an event ticket obtained through such a circumvention violation if the seller participated in, had the ability to control, or should have known about the violation. The act applies to event tickets for public concerts, theater performances, sporting events, and similar activities at venues with seating capacity of over 200.

The FTC enforced the act against three New Yorkers that collectively made over $26 million in revenue over the matter of a few years:

The defendants pulled off the scheme by using bots on the Ticketmaster website. The programs—which went by the names Automatick, Tixman and Tixdrop—were capable of repeatedly searching web pages for available tickets and then automatically reserving them.

In addition, the defendants used hundreds of credit cards belonging to fake people, and routed their internet activity to the Ticketmaster page through spoofed IP addresses. “In many instances, Defendants also did not use their address as the primary address, shipping address, or billing address for their Ticketmaster accounts. Instead, they used over 550 addresses that were either fake or unrelated to their business,” the FTC alleged in a court complaint.^[2]

However, as the author points out, the BOTS act lacks a consumer enforcement mechanism and is rarely enforced. In fact, this FTC enforcement action in early 2021 was the first time the FTC brought such an action.

The lack of healthy competition in the ticket selling world is also a primary concern of consumer advocates and ticket buyers. The worst culprit according to many is Live Nation Entertainment. In 2010, the company, which is a massive events promoter and venue operator, merged with Ticketmaster, a ticket sales giant. Together they control an estimated 70 percent of the ticketing and live event venues market. The merged entity was responsible for the infamous Taylor Swift ticketing debacle:

It’s no secret that Taylor Swift fans were outraged in November 2022 when millions flocked to Ticketmaster.com to grab tickets to see the heartbreak queen for the first time since 2018 and the website crashed. The long wait lines and frozen screens sparked an uproar with fans, blaming Ticketmaster for ruining their chances to see the pop star.

“As the leading player, we have an obligation to do better,” said Joe Berchtold, Live Nation Entertainment president and chief financial officer, at the hearing Tuesday.

This is not the first time consumers have called for the breakup of Ticketmaster and Live Nation. It’s also not the first time the Department of Justice has been reportedly looking into alleged misconduct by the company.

When the Live Nation and Ticketmaster merger was approved in 2010, it was under the condition of a consent decree. Among other things, the purpose of that agreement was to forbid Live Nation from retaliating against a venue for using a ticketer other than Ticketmaster. After an investigation, in 2019 the DOJ made its most significant enforcement action of an antitrust decree in 20 years when it alleged Live Nation Entertainment violated that decree. The company settled with the government.^[3]

The near-monopoly power has created concerns among many that Live Nation will retaliate if you go with a ticketing company other than their Ticketmaster operation, and in many cases exclusivity agreements require Ticketmaster to be used:

“In a world where the promoter and the venue are not affiliated with each other, we can trust that the promoter will look to get the best deal from the venue; however, in this case the promoter and the venue are part of the same corporate entity so the line items are essentially Live Nation negotiating to pay itself,” [one musician] said.

The band told CNBC if they want to play a certain size venue in a particular city, they are sometimes left no choice other than to use Live Nation because of the lack of competition in some regions. Then if they would like to use another ticketer other than Ticketmaster, they say that is not an option.

“Ticketmaster has created these exclusive contracts, once you sign that contract, a band is not allowed to come in and say, ‘we want to sell our tickets with X, Y, Z platform,’” said Jordan Cohen, one of the band’s eight members.

They even have a song with the lyric, “Live Nation is a monopoly.” “Due to Live Nation’s control across the industry, we have practically no leverage in negotiating,” Lawrence said.

While the company does have some competition, experts say no other firm currently stands a chance.^[4]

These concerns are not just from musicians and consumer advocates. The Justice Department was reported to have opened an investigation into Live Nation, focused on whether the company has “abused its power over the multibillion-dollar live music industry”:

Members of the antitrust division’s staff at the Justice Department have in recent months contacted music venues and players in the ticket market, asking about Live Nation’s practices and the wider dynamics of the industry, said the people, who spoke on the condition of anonymity because the investigation is sensitive. The inquiry appears to be broad, looking at whether the company maintains a monopoly over the industry, one of the people said.^[5]

This Committee’s federal counterpart felt the issue pressing enough to hold an oversight hearing to delve into the issue, “Location Change: That’s the Ticket: Promoting Competition and Protecting Consumers in Live Entertainment.”^[6] Senator Klobuchar explained the need for the hearing: “For too long, consumers have faced high fees, long waits, and website failures, and Ticketmaster’s dominant market position means the company faces inadequate pressure to innovate and improve.”^[7]

The practices above leave consumers in the lurch. They are forced to pay exorbitant service fees and other charges, exacerbated by the fact that the original ticket seller faces little competition. Then, if they are not among the lucky ones who can buy quickly, they are price gouged on the secondary market. A report by the United States Government Accountability Office (GAO) confirmed these practices and outcomes:

Consumer protection issues include difficulty buying tickets at face value and the fees and marketing practices of some market participants.

• Professional resellers, or brokers, have a competitive advantage over consumers in buying tickets as soon as they are released. Brokers can use numerous staff and software (“bots”) to rapidly buy many tickets. As a result, many consumers can buy tickets only on the resale market at a substantial markup.
• Some ticket websites GAO reviewed did not clearly display fees or disclosed them only after users entered payment information.
• “White-label” resale sites, which often appear as paid results of Internet searches for venues and events, often charged higher fees than other ticket websites—sometimes in excess of 40 percent of the ticket price—and used marketing that might mislead users to think they were buying tickets from the venue.^[8]

The GAO report also discussed potential solutions:

Selected approaches GAO reviewed, such as ticket resale restrictions and disclosure requirements, would have varying effects on consumers and businesses.

• Nontransferable tickets. At least three states restrict nontransferable tickets—that is, tickets whose terms do not allow resale. Nontransferable tickets allow more consumers to access tickets at a face-value price. However, they also limit consumers' ability to sell tickets they cannot use, can create inconvenience by requiring identification at the venue, and according to economists, prevent efficient allocation of tickets.
• Price caps. Several states cap the price at which tickets can be resold. But according to some state government studies, the caps generally are not effective because they are difficult to enforce.
• Disclosure requirements. Stakeholders and government research GAO consulted generally supported measures to ensure clearer and earlier disclosure of ticket fees, although views varied on the best approach (for example, to include fees in an “all-in” price or disclose them separately).

Some market-based approaches are being used or explored that seek to address concerns about secondary market activity. These approaches include technological tools and ticket-buyer verification to better combat bots. In addition, a major search engine recently required enhanced disclosures from ticket resellers using its advertising platform. The disclosures are intended to protect consumers from scams and prevent potential confusion about who is selling the tickets.

In response to growing concerns within the ticketing industry, a coalition of consumer groups, including the Consumer Federation of America, Consumer Action, and the National Consumers League published the “Ticket Buyer Bill of Rights,” which they describe as “a set of principles the nation’s leading consumer advocacy groups and others believe should serve as a framework for ticketing legislation that can improve the live events ticketing market that serves millions of fans each year.”^[9] The Ticket Buyer Bill of Rights features five pillars:

The Right to Transferability, where ticketholders decide how to use, sell or give away their tickets if they wish and not the entity that previously sold the tickets;

The Right to Transparency, which includes all-in pricing and disclosures of relevant information for the purchasing decision;

The Right to Set the Price, so that companies who originally sold the tickets cannot dictate to fans for what price they can or cannot resell their purchased tickets;

The Right to a Fair Marketplace, where fans compete with actual humans, not illegal software bots, for tickets, and, lastly;

The Right to Recourse, where harmed fans retain the choice to seek remedies through the public court system and are not blocked by terms and conditions that force them into private arbitration.

1. Addressing consumer protection issues in ticket sales

According to the author:

SB 829 seeks to end the monopoly that is plaguing the live entertainment business across the country. This bill will prevent ticket sellers from utilizing exclusivity clauses in their contracts with venues. By prohibiting exclusivity clauses the ticket seller market will open and different sellers can compete. Preventing this clause will overall provide protections for consumers, businesses and artists.

This bill seeks to create more competition in the ticket selling economy. To address the concerns discussed at length above that operations such as Live Nation/Ticketmaster create exclusivity agreements to prevent real competition, this bill specifically prohibits contracts between operators of entertainment facilities and primary ticket sellers that provide for the primary ticket seller to be the exclusive and sole primary ticket seller for the operator of the entertainment facility.

SUPPORT

None known

OPPOSITION

None known

RELATED LEGISLATION

Pending Legislation:

SB 478 (Dodd, 2023) makes it an unlawful business practice pursuant to the Consumer Legal Remedies Act to advertise, display, or offer a price for a good or service that does not include all mandatory fees or charges other than taxes imposed by a government. SB 478 is currently in this Committee and is set to be heard the same day as this bill.

SB 644 (Glazer, 2023) requires a hotel, third-party booking service, hosting platform, or short-term rental to allow a reservation to be canceled without penalty if the cancellation is commenced within 24 hours of the reservation being finalized so long as the reservation is made 24 hours or more prior to the day of check-in. The bill prescribes certain procedures for issuing the attendant refunds. It authorizes public prosecutors to bring civil actions seeking civil penalties. SB 644 is currently in the Senate Appropriations Committee.

SB 785 (Caballero, 2023) reworks the laws governing ticket sellers, including creation of various categories of ticket sellers with different provisions applying to each. SB 785 is currently in this Committee and is set to be heard the same day as this bill.

AB 8 (Friedman, 2023) requires a ticket seller to disclose to a purchaser the total price of the ticket and the portion of that price that represents any fees or surcharges. The seller must also provide a link to an internet webpage that includes certain refund requirements, as specified. AB 8 is currently pending in the Assembly Privacy and Consumer Protection Committee.

Prior Legislation:

AB 1556 (Friedman, Ch. 180, Stats. 2021) requires for cancelled events, that a refund be made within 30 calendar days of the cancellation; and requires a ticket price at any event which is postponed, rescheduled, or replaced with another event at the same date and time be fully refunded to the purchaser by the ticket seller upon request within 30 calendar days of the refund request.

SB 342 (Hertzberg, Ch. 162, Stats. 2020) makes it unlawful to register, traffic in, or use the name of a professional sports team or the names of professional sports leagues, among others, in a domain or subdomain name of a website to sell tickets in a fraudulent, deceptive, or misleading manner. It provides a private right of action to a person who suffers an economic injury as a result of such misconduct.

AB 329 (Pan, Ch. 325, Stats. 2013) made it a misdemeanor to intentionally use or sell software to circumvent a security measure, access control system, or other control or measure on a ticket seller’s website that is used to ensure an equitable ticket buying process.

PRIOR VOTES:

Senate Business, Professions and Economic Development Committee (Ayes 11, Noes 0)

**************

1. Ethan Millman, Beyoncé Fans Are the Latest to Be Fleeced by Huge Ticket Fees (Feb. 9, 2023) RollingStone, https://www.rollingstone.com/music/music-news/beyonce-renaissance-tour-ticket-fees-1234676864/. ↑

2. Michael Kan, 3 Scalpers Fined for Using Bots to Scoop Up Tickets on Ticketmaster (Jan. 22, 2021) PCMag, https://www.pcmag.com/news/3-scalpers-fined-for-using-bots-to-scoop-up-tickets-on-ticketmaster. All internet citations are current as of April 18, 2023. ↑

3. Emily Lorsch, Why Live Nation and Ticketmaster dominate the live entertainment industry (Jan 25, 2023) CNBC, https://www.cnbc.com/2023/01/25/the-live-nation-and-ticketmaster-monopoly-of-live-entertainment.html. ↑

4. Ibid. ↑

5. David McCabe & Ben Sisario, Justice Dept. Is Said to Investigate Ticketmaster’s Parent Company (Jan 24, 2023) The New York Times, https://www.nytimes.com/2022/11/18/technology/live-nation-ticketmaster-investigation-taylor-swift.html. ↑

6. Video of the hearing available at: https://www.judiciary.senate.gov/committee-activity/hearings/thats-the-ticket-promoting-competition-and-protecting-consumers-in-live-entertainment. ↑

7. News Releases, Klobuchar, Lee Announce Date of Senate Judiciary Committee Hearing on Problems in America’s Ticketing Markets (Jan. 17, 2023) Senator Amy Klobuchar website, https://www.klobuchar.senate.gov/public/index.cfm/2023/1/klobuchar-lee-announce-date-of-senate-judiciary-committee-hearing-on-problems-in-america-s-ticketing-markets. ↑

8. Event Ticket Sales: Market Characteristics and Consumer Protection Issues (Apr. 2018) GAO, https://www.gao.gov/assets/gao-18-347.pdf. ↑

9. Ticket Buyer Bill of Rights, https://www.ticketbuyerbillofrights.org/#:~:text=The%20Ticket%20Buyer%20Bill%20of%20Rights%20is%20a,year.%20The%20Bill%20of%20Rights%20features%20four%20pillars%3A. ↑

SENATE COMMITTEE ON

BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT

Senator Richard Roth, Chair

2023 - 2024 Regular

Bill No: SB 829 Hearing Date: April 17, 2023

Subject: Ticket sellers: exclusivity

SUMMARY:

Prohibits an exclusivity clause in a contract between a ticket seller and primary entertainment facility operator, where the primary ticket seller is the exclusive ticket seller for the operator of the entertainment facility, as specified. States this bill will not require an operator of an entertainment facility to enter into an agreement with a primary ticket seller or require that an operator of an entertainment facility have an agreement with multiple primary ticket sellers.

NOTE:

This measure is double-referred to the Senate Committee on Judiciary, second.

Existing law:

1. Requires that a ticket seller, prior to sale, disclose to the purchaser by means of description or a map, the location of the seat or seats represented by the ticket or tickets. (Business & Professions Code (BPC) § 22502)
2. Requires the ticket price of any event, which is canceled, postponed, or rescheduled to be fully refunded to the purchaser by the ticket seller within 30 calendar days of cancellation. States the ticket price of an event which is postponed, rescheduled, or replaced with another event at the same date and time, shall be fully refunded to the purchaser by the ticket seller upon request within 30 calendar days of the refund request. Defines a rescheduled event to include a canceled occurrence of a recurring event for which the purchaser is offered the opportunity to attend another, materially identical occurrence of the same event at a different date or time. Permits a local jurisdiction to require a ticket seller to provide a bond of up to $50,000 to provide for any refunds that may be required. (BPC § 22507)
3. Requires any partial or full deposit received by a ticket seller on a future event for which tickets are not available to be refundable except for a service charge of not more than 10% until tickets for the event are actually available. Requires ticket sellers to maintain records of ticket sales, deposits, and refunds. (BPC § 22506)
4. Requires a ticket seller to disclose that a service charge is imposed by the ticket seller and is added to the actual ticket price by the seller in any advertisement or promotion for any event by the ticket seller. (BPC § 22508)
5. Requires ticket sellers to maintain records of ticket sales, deposits, and refunds. (BPC § 22501)
6. Defines “ticket seller” as any person who for compensation, commission, or otherwise sells admission tickets to sporting, musical, theatre, or any other entertainment event; and provides specific exclusions from that definition, including, any person who sells six tickets or less to any one single event, provided the tickets are sold off the premises where the event is to take place, including, but not limited to, designated parking areas and points of entry to the event. (BPC §§ 22503-22504)
7. States a ticket seller must have a permanent business address from which tickets may only be sold and that address shall be included in any advertisement or solicitation and will be duly licensed as may be required by any local jurisdiction. States a violation of this above provision constitutes a misdemeanor punishable by imprisonment in a county jail not exceeding six months, or by fine not exceeding two thousand five hundred dollars ($2,500), or by both. States that any person who engages, has engaged, or proposes to engage in a violation of the above is liable for a civil penalty of not more than two thousand five hundred dollars ($2,500) for each violation, as specified. States that each ticket sold or offered for sale in violation of the above shall constitute a separate violation, and that the remedies provided are cumulative to each other and to the remedies or penalties available under all other laws of this state, as specified. (BPC § 22500(c))
8. Provides for the comprehensive regulation of ticket sellers, including prohibiting a ticket seller from contracting to sell or accepting payment for tickets unless the ticket seller has lawful possession of the ticket; has a contractual right to obtain the ticket; or informs the purchaser the seller does not have possession of the tickets, has no contract to obtain the offered ticket, and may not be able to supply the ticket at the contracted price, as specified. (BPC § 22502.1)
9. Defines a primary contractor as the person or organization who is responsible for the event for which tickets are being sold. (BPC § 22503.5)
10. Declares that regulation of ticket sellers does not apply to a primary contractor or seller of tickets for the primary contractor operating under a written contract with the primary contractor. (BPC § 22503.5)
11. Declares that violations of statutory regulations of ticket sellers are punishable as a misdemeanor. (BPC § 22505)

This bill:

1. Makes the following definitions:
   1. “Entertainment” means all forms of entertainment including, but not limited to, theatrical or operatic performances, concerts, motion pictures, all forms of entertainment at fairgrounds and amusement parks, and all types of athletic competitions including football, basketball, baseball, boxing, tennis, hockey, and any other sport, and all other forms of diversion, recreation or show.
   2. “Entertainment facility” means a publicly or privately owned place of entertainment including, but not limited to, an amusement park, arena, auditorium, concert hall, live performance venue, museum, racetrack, stadium, theater, or other place where entertainment events are presented for a price of admission. The facility does not have to be used exclusively for entertainment events.
   3. “Operator” means any person who owns, operates, or controls an entertainment facility.
   4. “Primary ticket seller” means a primary contractor as specified, ticket seller, or agent of the primary contractor or ticket seller that engages in the primary sale of tickets for an event.
   5. “Primary contractor” means the person or organization who is responsible for the event for which tickets are being sold.
2. Prohibits an exclusivity clause in a contract between a ticket seller and primary entertainment facility operator, where the primary ticket seller is the exclusive ticket seller for the operator of the entertainment facility.
3. States it is unlawful to threaten to enforce a provision that was made unlawfully based on this legislation or to otherwise penalize an operator of an entertainment facility for entering into an agreement with another primary ticket seller. Specifies that a waiver of a provision is contrary to public policy and thus is void and unenforceable.
4. States this bill will not require an operator of an entertainment facility to enter into an agreement with a primary ticket seller or require that an operator of an entertainment facility have an agreement with multiple primary ticket sellers.

FISCAL EFFECT:

Unknown. This bill is keyed fiscal by Legislative Counsel.

COMMENTS:

1. Purpose. The Author is the Sponsor of the bill. According to the Author, “SB 829 seeks to end the monopoly that is plaguing the live entertainment business across the world and will prevent ticket sellers from utilizing exclusivity clauses in their contracts with venues. Additionally it will create an open market where different sellers can compete. Preventing this clause will provide venues the autonomy to collaborate with other sellers without the fear of retaliation from large ticket sellers, while still providing them with the option to partner with however many sellers they would like.”
2. Background.

Ticket Sellers and Mergers in the Last Decade. In 2010, the Justice Department approved a merger between Ticketmaster and Live Nation, two of the biggest companies in ticket sales in the world. At the time, Tickemaster sold 141 tickets worth $8.9 billion in 2008. At the same time, Live Nation owned 120 theaters, and the combined company stood to achieve an estimated $6 billion/year.

According to The New York Times, the conditions of the merger included Tickemaster divesting one of its ticket divisions and licensing its software to a competitor and being subject for 10 years to “‘tough antireltaliation provisions’ to prevent abuse of its power over concert tours, artist management, ticketing and theaters.” While originally the Justice Department determined that the merger was anticompetitive, these terms alleviated its concerns.

Many consumer advocates, politicians, and independent concern promoters were not in favor of the merger. In July 2010, 50 members of the House of Representatives sent a letter urging the Justice Department to oppose the deal.

According to The New York Times, “Ticketmaster and Live Nation have argued that by combining they would be able to reduce inefficiencies in the marketing and presentation of live events, which would help to revive the ailing music industry and ultimately benefit consumers.” Years later, Senator Amy Klobuchar called for the DOJ to investigate Live Nation in 2019, according to Rolling Stone.

A Recent Catalyst: Taylor Swift “Midnights” Album. On October 21, 2022, singer and songwriter Taylor Swift released an entire new album, “Midnights.” The album was an overnight success, and Taylor Swift, at 32, became the first artist ever to simultaneously capture all Top 10 spots with songs from the “Midnights” album.

Days after releasing the album, Swift announced her Eras Tour, the first of her musical tours since 2018 due to the COVID-19 pandemic. During the pandemic, Swift released three other albums in addition to “Midnights.”

Tickets were to go on sale on November 18, 2022. Pre-sale for tickets for select fans with certain corporate partnerships began as early as November 1, 2022. Ticketmaster and at least one tour date in Nashville noted that ticket prices could fluctuate based on demand at any given time.

On November 15, during presale, Ticketmaster’s website crashed following millions showing up to buy Swift’s concert tickets. After Ticketmaster determined there were at least questions as to whether there were enough tickets to meet buyer demand, Ticketmaster also cancelled its general ticket sale that was supposed to open on November 18, 2022. This meant that fans who otherwise would have paid hundreds of dollars to see Swift in concert were left to purchase them off of resale websites, where they were going for thousands of dollars (some even around $20,000). According to Forbes, Ticketmaster’s failure was caused in large part due to bot attacks, but also due to the failure of leadership to engage in meaningful practices and philosophies among employees to help them respond in a crisis.

US Judiciary Committee Hearing. Following public outcry, The New York Times reported the Justice Department opened an antitrust investigation into Ticketmaster, who merged with Live Nation Entertainment back in 2010. For her own part, Swift criticized the situation on social media, sharing with fans that she and her team asked multiple times if Ticketmaster could handle the demand of her fan base, and the company assured her it could.

On Tuesday, January 24, 2023, the US Senate Judiciary Committee had a hearing on the issue, focusing specifically on the Live Nation and Ticketmaster’s 2010 merger. Leading up to the hearing, Senator Klobuchar told Rolling Stone that she believed Live Nation Entertainment was a monopoly because, as a company, it has 70% of tickets for major concern venues; venue operators said that they were concerned about not getting Live Nation’s shows at their venues if they didn’t use Ticketmaster; the company utilized exclusivity deals that can last 3-7 years; hidden fees, some costing up to 75% of a ticket’s face value; and Live Nation is owning more and more venues, which was not the case in 2010 when the merger occurred.

In the January 2023 hearing, U.S. Senators questioned Live Nation and raised potential solutions to the problems above, including non-exclusivity of contracts between venues and ticketing agents, placing price caps on tickets, and working more closely with the FTC to stop speculative ticket sales. National media has been following the story since October and November of 2022.

Efforts to Respond to Consumer Protection Issues. Among other steps taken to drive more cosumer-centric responses to the experiences highlighted above, consumer advocacy groups launched a campaign culminating in The Ticket Buyer Bill of Rights. According to its website, The Ticket Buyer Bill of Rights “is a set of principles the nation’s leading consumer advocacy groups and others believe should serve as a framework for ticketing legislation that can improve the live events ticketing market that serves millions of fans each year. The Bill of Rights features four pillars: 

1. The Right to Transferability, where ticketholders decide how to use, sell or give away their tickets if they wish and not the entity that previously sold the tickets; 
2. The Right to Transparency, which includes all-in pricing and disclosures of relevant information for the purchasing decision;  
3. The Right to Set the Price, so that companies who originally sold the tickets cannot dictate to fans for what price they can or cannot resell their purchased tickets, and, lastly; 
4. The Right to a Fair Marketplace, where fans compete with actual humans, not illegal software bots, for tickets.”

Specifically, The Ticket Buyer Bill of Rights includes:

• “All-in, upfront pricing – no surprise fees at checkout;
• Mandating primary ticket-selling companies to report all ticket bot activity to the appropriate authorities;
• Disclosure of how many tickets are available to the general public at the time of “on sale”;
• Clear and conspicuous disclosure when a ticket seller does not have a ticket in their possession or contractual right;
• The guarantee of unrestricted transfer of all tickets; and
• A prohibition on deceptive URLs and other fraudulent reseller practices.”

As stated above, this framework is meant to provide guidance for legislative action to ensure consumer protection in ticketing sales.

At the state level, legislatures have been taking action to ensure consumer protection with respect to ticket sellers, with a particular focus on Ticketmaster.

In June 2022, the New York legislature passed a bill to increase transparency in the ticket-buying process for live events like concerns and plays, whereby Ticketmaster and StubHub must disclose all fees upfront so that prices do not change during a transaction (for instance, in last step in checkout). Additionally, the New York Legislature introduced a bill in 2021 that would have instituted civil penalties for using ticket-purchasing software; required an online resale market to post the ticket price in advertisements or offers of resale; and required ticket prices to be disclosed prior to a customer purchasing a ticket, among other things.

In Colorado, a bill has been introduced this year that would prohibit “speculative ticketing,” or the process by which brokers sell tickets they do not possess. The bill would also require online companies to clearly display total, inclusive prices of all service charges and other fees included in the purchase of the ticket. According to The Denver Post, the bill also “expands the definition of deceptive trade practices to include the use of automation to buy tickets or circumvent limits, selling tickets without being upfront about all the fees, and increasing ticket prices once they have been selected.”

Moreover, Ireland’s Competition Consumer Protection Commission came to an agreement with Ticketmaster Ireland (TMI) that TMI should refrain from entering into an exclusivity clause with a venue, among other things.

Ticketing Bills in the California Legislature. In California, two other bills hope to tackle this problem.

In the Senate, other than this bill, SB 785 (Caballero) of 2023 would make a number of changes to ensure ticket sellers must have the ticket in their possession prior to sale. It also changes violations and penalties for this offense, requires certain disclosures, provides definitions, provides refunds for consumers who cancel their tickets, and specifies this bill does not apply to events where tickets are distributed free of charge or any nonprofit, charitable, tax-exempt organization that sells tickets to an event sponsored by the organization.

In the Assembly, AB 8 (Friedman) currently expands the definition of a ticket seller to include a primary contractor or platform, as defined, and would instead apply the refund requirement relating to the postponement or rescheduling of an event only to primary contractors. It also imposes disclosure requirements on ticket sellers relating to ticket price, including that the ticket seller would be required to display the total cost and fees for a ticket prior to the ticket being selected for purchase. It requires a primary contractor to make various disclosures regarding the total number of tickets available and the price or price range at which those tickets will be sold at least 7 days before tickets are made available, except as specified. It prohibits the resale of tickets that were initially offered at no charge and would require a ticket seller to provide printed tickets for a cellular phone-free event, as defined, at the same price that a mobile or electronic ticket is sold. Finally, it imposes various requirements on a primary contractor relating to the resale of tickets, including prohibiting a primary contractor from restricting the resale of tickets.

1. Related Legislation. AB 1556 (Friedman, Chapter 180, Statutes of 2021) required, for cancelled events, that a refund be made within 30 calendar days of the cancellation. Required a ticket price at any event which is postponed, rescheduled, or replaced with another event at the same date and time be fully refunded to the purchaser by the ticket seller upon request within 30 calendar days of the refund request.

AB 472 (Cooley and Boerner Horvath) of 2021 would have prohibited a person from intentionally using or selling software or services to circumvent a security control or measure that is used to ensure an equitable campsite reservation making process for visitors, as specified. (Status: The measure was vetoed by the Governor.)

1. Arguments in Opposition. Broadway San Diego, Hollywood Pantages, and Nederlander Concerts write in opposition: “We believe the bill is built on the false premise that major league sports teams and venue owners and operators are somehow compelled to enter into exclusive contracts with ticketing companies. In fact, our organizations are willing partners in these contracts and find that the relationship between us and our ticketing partners is good for both parties and consumers. Most notably, our relationship with a ticketing partner allows us to better ensure the safety, security, and validity of tickets on behalf of the purchasing consumer.

Bill proponents assert that the bill doesn’t preclude us from entering into exclusive relationships. However, the prohibition on a contract effectuating that exclusive relationship is a de facto ban. None of us would enter into an exclusive relationship without a contract establishing the terms and responsibilities of both parties.

Our organizations enter exclusive relationships across many sectors of our businesses – from food service to security to performers and labor unions. These agreements are entered into by two sophisticated parties and are secured by contracts. Ticketing should be no different.”

SUPPORT AND OPPOSITION:

Support:

None received

Opposition:

Broadway San Diego
Hollywood Pantages
Nederlander Concerts

-- END --