Assembly Standing Committee on Arts, Entertainment, Sports, and Tourism

Quirk-Silva. Here. Wallis. Here. Fong. Here. Friedman. Hart. Here. Lackey. Here. Valencia.

With that -- oh, these buttons. With that, I see our author, Senator Caballero, if you'd like to come up. And today she will be presenting SB 785, Consumer Protection Ticket Sellers.

Good morning, Madam Chair and members. I would like to thank the Chair and the committee staff for this work on this issue. Over the past few months, I have heard countless stories from consumers, who were misled during the purchase of live event tickets.

Every so often, a consumer selects a ticket that falls within their price range, only to discover hidden fees at the checkout. I've also heard from consumers who have purchased tickets, only to discover 24 hours before an event, that the order was not fulfilled. When a consumer purchases tickets to live entertainment events, they care about three things: one, what's the total price I'm going to have to pay? Two, where is the seat location? And three, are they purchasing a real ticket? SB 785 will protect consumers by requiring upfront pricing, effectively banning the use of bots and deceptive URLs, and requiring ticket sellers to own or possess a ticket before actually listing it for sale.

SB 785 would ensure consumers know the final price of a ticket by requiring ticket sellers to disclose the total price upfront. In other words, the first price the consumer sees will be the final price they will pay. The bill also ensures consumers get exactly what they pay for, by requiring a ticket seller to disclose seed information and ensure a ticket seller own or possess a ticket at the time of the sale.

Furthermore, in an effort to effectively ban the practice of scalping and the use of bots, this bill establishes serious penalties for the use of deceptive URLs that lure consumers into buying tickets at inflated prices, and for employing bots that allow professional scalpers to hoard tickets and engage in large-scale scalping, depriving consumers of access to face-value tickets. You no longer have to buy the tickets, get them in your hand, and then go stand out in front of the event in order to sell them. You can do it by using deceptive practices that lure people to your site when you don't actually even have the ticket.

Lastly, SB 785 expressly protects the ability of artists and sports teams to set terms and conditions on the sale of their tickets, including the ability to use technology to control scalping and price gouging. It's time we modernize California's ticket statute, in order to protect consumers from anti-consumer practices and price gouging, while preserving the rights of the artists, entertainers, teams and venues. To allow for ongoing stakeholder engagement on this important topic, I intend to hold this bill in Assembly Privacy as a two-year bill and work with the Chair and the committee on an informational hearing in the fall.

And the Chair has advised me that Madam Chair can participate in the hearing as well, as well as the committee. So with me, today, to testify in support, is Andrew Govenar on behalf of the San Francisco 49ers and Major League Baseball.

Andrew Govenar, here on behalf of the San Francisco 49ers in support. Our team strives to provide a world class experience for our fans and those that attend our stadium and games. We believe being able to control how our tickets are priced, transferred, sold, and resold is fundamental to providing that experience in our private venues.

SB 785 will enact meaningful consumer protections, while also protecting the rights of event presenters, our California teams, our artists, and our venues, who invest in, create and deliver entertainment to our fans. To determine how best to serve their fans and choose how tickets to their events may be sold, we support this bill because it would enact meaningful reforms to the ticketing ecosystem that put consumers and entertainers first. It is for these reasons that we support SB 785, and we look forward to working with this committee and the other committees in the off-season on this issue. Thank you.

We're good now? All right, Madam Chair, good morning, members of the committee. First of all, we want to thank Senator Caballero for introducing this bill. Mark Aprea here on behalf of AEG, and its ticketing division access. And we urge your aye vote. Thank you.

Good morning. Tim Lynch on behalf of the Golden State Warriors. We'd like to also thank the committee and the author for the bill. We support it in its current form and look forward to the ongoing work in this space.

Good morning. Silvio Ferrari on behalf of the National Football League, in support.

Madam Chair and members, Mike Carpenter on behalf of Live Nation Entertainment. Also in support.

Julie Baker, California Arts Advocates, in support.

All right, thank you. And let's go to opposition if we have any testimony.

If I could, I am a tweener on behalf of another client. I represent five California baseball teams in MLB. We have asked for some technical changes in both SB 785 and AB 8, that has to do with fee transparency in the definition. At the working group convened by the Senate and Assembly committees, it seemed they had come to an agreement on this, that happens during the purchase versus advertising. So in the off-season, we'd just like to continue that discussion as we work on that and some other technical changes to the issues. So thank you.

Good morning, Madam Chair and members. Robert Herrell. I'm the Executive Director of the Consumer Federation of California. I'm also representing, today, a few other groups that couldn't make it, given the nature of the committee -- sportsfans.org, the National Consumers League, Protect Ticket Rights and other consumer organizations. We oppose this bill. The problem here in this industry, writ large, is that you have a monopoly player: Live Nation-Ticketmaster, which was allowed to merge a little more than a decade ago, has become a dominant monopoly, particularly in the primary ticket space, the original ticket sellers, and also increasingly, raising market share in the secondary market.

That history is important because if you look back on the history of antitrust in this country, standard oil, the Rockefellers, it goes back 100 plus years. You see that, never once in the history of consumer protection, has a monopoly actually cared about protecting consumers. What they care about is protecting their monopoly, in fact, in some cases enhancing their monopoly and maximizing profits. That's the game here. And unfortunately, we see a number of provisions in this bill -- and I've met with Senator Caballero and we had a good respectful conversation, walked through the principles that the Consumer Federation of California thinks are important to have comprehensive reform that actually protects consumers --

And this sadly, just falls short of that mark. When you have a monopoly -- let's take an issue like transferability -- when you have a monopoly, transferability, allowing consumers to transfer tickets -- as I say, life happens. Some of these concerts or sporting events are scheduled way in advance. People are buying Beyonce, Taylor Swift tickets almost a year in advance. Literally in Europe, they're talking about the pressures on the national inflation rate, in countries like Sweden, because of the existence of one or more Beyonce or Taylor Swift concerts. That's the impact that's having. Now granted, some of that is because of this pent up demand due to COVID.

But we have focused primarily on Section 9 of the bill. This is the section that essentially allows the original ticket seller to put anything and everything they want to in the terms and conditions. We are all, as consumers, trained to click on that box. I agree to the terms and conditions. Why? Because if you don't click on that box, you don't get the software in your phone updated, you don't get the ticket, you don't go to the sporting event. So that process, then, is allowing the monopolist in this marketplace to confine consumer protection, to limit consumers ability to deal with real world, real life situations.

Kid gets sick, your work is busy. Whatever it is, you can't go anymore. I would also note that all the sports teams that have spoken have partnerships with secondary market players. Yeah, just a few seconds. So we are happy to continue to work with the author and with the other stakeholders on this. I would note, there's a brand new report, out this morning, that shows that analyzing 25 million ticket transactions in the sporting area, transferability has helped sports fans save $260,000,000 over five years. So with that, we are happy to continue to work on this issue. We respectfully urge a no vote at this committee today. Thank you.

Madam Chair and members, Erin Niemela representing StubHub, one of the secondary market platforms that, unfortunately, has a respectful oppose unless amended position on this bill. We want to start by thanking the author and her staff for constantly being accessible during this process, and also being open to discussion at every point. Unfortunately, we find ourselves in a position of continuing to oppose unless amended.

And one of those reasons is that California already, currently, falls behind other comparable states, in terms of providing basic consumer protections to utilize and to purchase or resell your tickets. For example, in New York, since 2010, New Yorkers have had the ability to be protected against being turned away at the door, wherever they bought their ticket, and they have been protected in their ability to transfer tickets. There is an explicit protection for seasoned ticket holders, above and beyond that, that allows them to transfer tickets in any way that they would like to.

And so California is already falling behind. This bill, unfortunately, moves California further behind, in the way that it is drafted now, because it provides statutory protections for the original ticket seller or presenter to control the dispensation of the ticket at every turn, including turning away the ability of folks to utilize their ticket at the door. While this committee has done a great job trying to address Section 9, and the transferability prohibition that would have existed in that section, unfortunately, under the proposed amendments, that section would still allow those original ticket sellers to prohibit utilization of that ticket, purchased on a different platform, at the door.

And then there are two other provisions of the bill that would continue to allow that, including an explicit provision that would restrict the rights of ticket holders who have a contractual right to their ticket, such as seasoned ticket holders, from being able to transfer those tickets or have full contractual control of the ticket that they purchased. So those are the reasons we continue to oppose the bill. Thank you.

Thank you. Do we have any others speaking in opposition today?

Tish Rylander on behalf of Vivid Seats, and we are opposed unless amended.

Seeing no one else, we will bring it back to the committee for questions or comments. Committee members?

Thank you, Madam Chair, and thank you Senator, for bringing this bill forward. This is clearly a situation where we have a lot of negative impacts to consumers: inflated prices, speculative ticketing. I'm particularly concerned about the use of bots, and I appreciate that your bill is trying to increase the enforcement of that. I think one thing, as we go forward with the proposal that you have offered today, to have the bill make its way out of this committee, and then become a two-year bill in Privacy and give more time to consider this, is to have some real hard data on the use of bots. I don't know if the Attorney General has information, or if there are other consumer advocacy groups that can get us that.

It seems to me that that really is what's making the system be distorted, is the use of bots, and the scalping effect -- and the inflation of prices in the secondary market is driven by that. So the biggest impact I think we can make, for consumers, is to try and get a handle on that. And I'd like to see this bill do that. So one of the things that opposition has raised about this particular bill, is that there is a potential for concentrating power even more greatly in the individual ticket vendors and the venues themselves, that the huge size of the ticket vendors is anti-competitive and that there is too much consolidation in the market. What is your view of that problem?

Well, there's no question that there has to be diverse market opportunities, but allowing bots to be used as the solution to that doesn't make any sense to me. So we're going to have to figure out whether we can require -- and this is separate from it -- but the venues are deciding who will get the ticket sales. And the venues, in many times, are owned by some of the companies or some of the teams that end up playing.

So, for example, what has occurred, and which has created federal legislation, is that allowing the leagues to own the stadiums, means that the teams own the stadium, and they pick the ticket seller that they want to go through. And so they end up having a relationship that solidifies the monopoly. And so unless you require that they sell tickets on at least two or three sites, you're going to end up with the bigger companies becoming bigger and bigger. Because they have a way to be able to control that primary market, control the secondary market within that same organization by saying, "You can only resell your tickets through our sites."

And so they pick up the secondary market and then there's kickbacks back to the teams, in the secondary market, if the ticket is inflated. So that goes way beyond what -- in terms of the relationships, that are controlled, partially by the federal government, when they allowed the situation to occur, if you will. And it may be that we have to get to a point where we say, "You have to advertise or you have to sell tickets on at least two sites." That may be the topic of the hearing that we have in the fall to figure out: how far do we need to go? So that we're not creating a super monopoly, by enacting rules that protect the consumer, that start to provide some transparency, but also that will lead to a monopolization of the industry totally.

Well, I thank you for the answer because I think that's exactly the challenge that we need to address, in addition to going after bots in a systematic way that's effective. Those two things with the price transparency component, that Assembly Member Friedman has in her bill, I think, would put together a much better package than what we're looking at right now. So thank you.

Thank you for that. I appreciate it. That was always the goal.

Any other comments? Assembly Member Friedman.

Thanks. I want to thank the author, for jumping into what's a really complicated issue, and I know she's been working very thoughtfully and very diligently on all of these issues. And I appreciate the conversations that we've had. I also am very -- I'm really looking forward to you working on the bot issue. I think it's something that we've heard from, sort of, everybody as a problem and something that nobody wants to -- that's not friendly to consumers and that artificially inflates the price of desirable tickets.

I would align a lot of my thoughts with Consumer Federation, in terms of what I still see as being issues with the bill. But I also have a lot of faith in you, as an author, and want to certainly see the conversation continue. And so I'll be supporting the bill today, even though I probably couldn't support it eventually, in this particular format. But I know that you're going to continue to work with everybody. Thank you very much.

I appreciate that. Thank you.

Any other members? Seeing no other members. Would you like to close?

Thank you very much for the robust discussion. I really appreciate the comments and respectfully ask for your aye vote to send it over to the Privacy Committee, so that it can be a two-year bill and then see if we can solve some of these issues.

And I do have some comments to our committee members and to those who have worked extensively on this bill. When you take on a topic, as both of these authors have, they're not easy topics. They're challenging, they're messy. There's disagreement, there's opposition. And sometimes, we think within a legislative cycle, that we can just move things and everything will pattern out. So I appreciate your willingness to say there's more work to be done.

And we did quite a bit of work throughout the committee, trying to find some consensus or a place of agreement, that didn't happen in this timeline, which is why the Privacy Chair, Assembly Member Jesse Gabriel, and I have worked close together. We will be doing a joint hearing and have talked extensively through this. We want to get to a resolution. The time just ran out for us to get to that place. But we know that there's a spot that we can find, in essence, that will protect consumers and will move this bill forward. So with that, I am supporting it. And we know that your reputation of being hardworking and continuing the conversation, we can count on that. So we appreciate that. With that, that bill will be moved directly to Privacy. Take the roll.

Quirk-Silva. Aye. Wallace. Not voting. Fong. Aye. Friedman. Aye. Hart. Aye. Lackey. Not voting. Valencia.

Looks like that bill is out and we will continue the work. Thank you so much. The vote is 5-2 not voting. With that, we will be adjourning our committee.