Everyone at the edges talks really fast. Like they’re in a hurry. Like with each wasted second they’re missing out on another piece of business they could be transacting. Guys (and they are overwhelmingly guys) in Toronto Maple Leafs caps bark out, “Tickets. Buying. Selling. Who needs tickets? LEAFS TICK-ETS!”
I’m outside the Air Canada Centre’s Bay Street Galleria entrance at 6:30-ish pm on May 8, before the 7 pm puck-drop kicking off game four of the Leafs vs Bruins Stanley Cup playoff series.
Ontario law prohibits selling and buying tickets for more than the advertised price, as well as purchasing tickets “with the intention of reselling them at a profit.” So technically, these guys – the sellers, the buyers – are criminals.
Yet all of this goes on within spitting distance of ACC security in their billowy yellow windbreakers. They do nothing.
A guy in glasses and a leather coat, Leafs cap sliding down his brow, seems to be the centre of gravity for the whole operation. Holding a stack of tickets thick as a pack of smokes, he feeds the others circling in and out of his orbit, restocking their inventory. “Gimme those Reds.” “I need a single.”
He’s asking $400 for a single seat in the Golds, face value $315. I hem. $350. I haw. He can tell I’m wasting his time. “I gotta make money,” he tells me. “I don’t work for free.” No sale.
The hawkers’ pitches swell under the general din, like they’re mixed low in the soundtrack. This barely clandestine market is defined not by its strangeness or seediness, but by its normalcy. It’s part of the fabric of attending a pro sports event.
And it’s all rather quaint. These hustling scalpers with their hangdog faces seem like relics. Sure, they’re criminals. But it feels like the sun is setting on their empire, as sure as it sinks behind the ACC at 7 pm on a Wednesday night in the middle of May.
The rising forces in ticket inflation are all online. Like dating, book-buying, insurance estimation and pretty much everything else, scalping has migrated to the digital sphere over the past decade. There, it’s more commonly referred to as ticket “reselling” or ticket “brokering,” the practice of scalping loosed of its violent frontier connotations and given the sheen of respectability.
Online, ticket reselling takes all kinds of forms. Some people use Craigslist forums. One person I reach there exchanges a few emails with me before I tell him I cannot promise ad space for a condo development in the Grand Caymans in exchange for an interview.
Others use semi-legitimate sites like StubHub (“Where fans buy & sell tickets”). There, centre-ice seats to Leafs-Bruins game four run you $1,200. Others use eBay to peddle futures on prospective games, with refund guarantees. There, two 100-level seats to a hypothetical round 4, game 7 Leafs playoff ticket would have set you back $13,323.22. You could buy a Nissan Versa for that.
There’s a certain “so what?” factor at work in the public mind.
So what if some investment banker drops 13 large for Leafs playoff tickets? For the most part, scalping is viewed as a victimless crime.
But when considered in the context of our city’s cultural industry, the answers to these “so what?”s tend to clarify themselves.
Toronto seems like a city perched perpetually on the edge of greatness. We make deliberate, flashy efforts to develop sports teams, to bait big-ticket concerts, touring theatre productions and film festivals. It’s a city striving desperately to be as entertaining as other places. We call our entertainment district the Entertainment District, as if it were just a bunch of SimCity placeholder tiles. Against this backdrop, reselling can be seen to make it more difficult – and considerably more expensive – to have fun in Toronto.
Online ticket brokers trade in open duplicity. Some recycle graphics and web layouts from major ticketing sites to pass themselves off as the real deal. Others can’t be bothered. TicketCentre.com – “Your Ticket Connection in TORONTO and Beyond!” – has a small picture of a blond woman wearing a headset offering customer service from an 800 number. To anyone raised online, it’s as fake as a $3 bill.
“It’s the Wild, Wild West,” says Live Nation Entertainment and Ticketmaster representative Jacqueline Peterson. And she’d know.
Ticketmaster has struggled to keep pace with the ballooning resale market. They’ve even entered it themselves. In February 2008, Ticketmaster acquired secondary ticketing giant TicketsNow, effectively vesting it with control over the primary and secondary resale of its own products.
In 2009, tickets to a Springsteen concert appeared simultaneously on Ticketmaster and TicketsNow, leading many to believe that Ticketmaster was intentionally diverting tickets into the resale market, where they could be sold at a premium.
In 2012, a Canadian court ordered Ticketmaster to pay out an $850,000 class action settlement to ticket buyers in Ontario, Alberta, Manitoba and Quebec. This suit also claimed that Ticketmaster was funnelling product to TicketsNow. Cheques were mailed out late last year, about $36 per customer, less some deductions for legal fees.
Despite these much-publicized scandals – and the longer history of anti-trust accusations against Ticketmaster – Peterson is adamant. “We don’t own or control the inventory,” she says. “Nor do we divert the inventory to be sold anywhere other than Ticketmaster.” (She should have added “anymore.”)
Peterson says Ticketmaster’s move into resale, where resale is legal, is designed to protect not its monopoly, but the fans. “Fans can be duped,” she says, “tricked into paying too much money, not sold legitimate tickets. That’s not good. That’s not good for the fans, for people who work in the industry, for anyone. Having a poorly run secondary market doesn’t protect fans.”
So private corporations like Ticketmaster are now self-regulating this freest of free markets, where the high end of pricing reaches the outer limit of what the market will bear.
In Ontario, enforcing laws – even newly amended laws – designed to stymie ticket resales seems of little concern. Brendan Crawley, a spokesperson for the Ministry of the Attorney General, admits via email that the “Ticket Speculation Act has a limited scope.”
Violations carry fines capped at $5,000 “if the person is an individual” and $50,000 “if the person is a corporation.” Mike Chilelli, who runs Toronto online broker Kangaroo Tickets, says such penalties are no deterrent. “It’s like a parking ticket.”
A Toronto police officer stationed at the ACC the night of game four, who all but openly laughs at a question about how they’re patrolling brazen game-night scalping, confirms as much. Street scalpers aren’t bothered by the penalties. “They don’t care. It’s just a fine. They’ll pay it.”
The trail of e-breadcrumbs that online ticket brokering leaves makes enforcement even trickier, were anyone to bother.
Take Chilelli’s Kangaroo Tickets. Though promising the “best tickets for all your Toronto events,” Kangaroo’s web domain is registered in Phoenix, Arizona, where ticket reselling is perfectly legal (provided you’re conducting business more than 60 metres from the venue).
Given the atrophy and indifference that seem to mark enforcement efforts, it’s little surprise that it has fallen to ticketing agents, promoters and even producers to try and weed out the illegal resellers themselves.
John Karastamatis is officially Mirvish Productions’ director of communications. But lately he’s been occupied part-time as an in-house private investigator, working with fellow Mirvish staffers – including senior marketing manager Chris Dorscht and Alan Forsyth, phone operations manager for TicketKing, who handles in-house sales – to smoke out scalpers, hucksters and other unsavouries looking to flip their tickets on the grey market.
“Reselling was a fairly innocuous activity before the web,” says Karastamatis. “The markups were never that outrageous. Since the web, which allows for a sense of anonymity, people are doing all kinds of stuff.”
Karastamatis estimates that 60 per cent of tickets to major events – concerts, basketball games, and so on – enter the resale market. So when Mirvish was preparing to bring the touring production of blockbuster Broadway musical The Book Of Mormon to Toronto, it took steps to ensure that the tickets went directly into the hands of fans, not the grubby mitts of the brokers.
For the original Book Of Mormon on-sale, held February 19, Mirvish limited ticket sales to eight per customer. It also wouldn’t sell to anyone who didn’t have a Canadian mailing address (to cut out resellers working out of the U.S. or offshore) and printed only physical tickets, no electronic tickets. “Otherwise,” says Karastamatis, “Someone could write software that goes into our website and gets all these e-tickets in minutes.”
The rush of traffic clogged Mirvish’s site and the King Street box office (where in-person sales were given a two-hour head start), but all in all, Karastamatis considers it a success. There were loopholes, of course. The software algorithm that verified Canadian mailing addresses only looked for a province code, meaning some unscrupulous brokers listed an American address with a Canadian province (one block of tickets was mailed to “Denver, ON”), counting on the postal service to correct the error.
A few days after visiting Mirvish and TicketKing’s offices, I speak with Forsyth over the phone. He boasts about having cancelled six tickets that were purchased and resold through California-based All Access Tickets. Forsyth says representatives at All Access offered to pay him off to not cancel the seats.
Darren Greenly of All Access wouldn’t comment on his back-and-forth with Forsyth and TicketKing except to say he’s “providing a service to his clients.” Then he passed the phone to “James” – who agreed to be quoted only under this name, likely not his real one. He was all too eager to talk about his run-in with Mirvish’s ticketing service.
Smugly matter-of-fact, James noted that the six tickets Forsyth cancelled are a minor inconvenience. “He’s spending hours and hours and hours on this,” James says of Forsyth’s efforts. “Out of about 500 tickets [we purchased], he caught, like, six.”
Forsyth nailed All Access when the company purchased a block of seats under its own name, which seems like a bit of rookie manoeuvre for a company that employs 82 people and (re)sold, by James’s estimate, a million tickets last year. But six tickets is nothing to All Access, which acquires seats through “many avenues” (including season ticket holders) and will pay to replace voided tickets for their clients.
All Access deals in such high volumes that it can easily eat the cost of upgrading tickets, with no real dip to the bottom line. If James’s figures are to be believed, All Access netted close to $75,000 U.S. on Toronto Book Of Mormon tickets alone, given his estimate that 500 procured tickets were resold at an average $150 markup. With margins like that, what’s $900 in lost revenue?
“The broker world isn’t going away,” James says. “There’s no way to stop it.”
Brokers argue that they’re just responding to demand. If Ticketmaster sells out of Rolling Stones floor seats priced at $624.50, a reseller may deem it totally principled to charge a considerable markup on that. The demand has exceeded the supply, driving up the price. Econ 101-type stuff.
If some sufficiently monied superfan wants to spend $2,530 on StubHub for a general admission ticket to the Tongue Pit at the Stones’ upcoming ACC show so he can watch irrelevant rock royalty work through a catalogue of standards, then that’s his prerogative. Call it a tax on poor taste. Or call it the collapse of ethics in the marketplace.
It’s tricky to talk about ethics and morals without hectoring. It’s perhaps even trickier when the subject is something as seemingly benign as a ticket to a pro hockey game or a touring production of an off-Broadway play.
For Karastamatis, reselling is anything but a victimless crime. While solid stats on the effects of ticket brokering and regulation are tricky to come by (given the region-by-region legality of the practice), one study shows that theatre attendance increases in regions where reselling is regulated by law enforcement. As producer, promoter and ticket agent, Mirvish is in more than just the business of moving tickets. Yes, it benefits from seeing that the money made from its productions is kept in-house. But it also benefits from keeping ticket prices reasonable so as not to “alienate” (Karastamatis’s word) anyone who may leave The Book Of Mormon having become lifelong theatregoing converts.
Shows like The Book Of Mormon, teams like the Toronto Maple Leafs and acts like the Rolling Stones have an inflated value in certain customers’ minds – what economists would call “perceived value.” Like other brands (Sony, Chanel, Stella Artois, whatever), their aura of quality is determined not by factors that belong purely to the market, but to social and cultural connotations: status, distinction, refinement or, when it comes to concerts or sporting events, the fear of missing out. When these associations get wrapped up in a product, its market value increases disproportionately.
So where Mirvish sells orchestra row U Book Of Mormon seats for a Friday, May 10, show at $107, Kangaroo Tickets brokers tickets listed at $384, the perceived value inflating the market value by, like, 300 per cent. And when customers begin paying perceived-value prices – or not paying them, because they’re simply cost-prohibitive – places like Mirvish can suffer. Theatre, concerts, sporting events, things long considered cultural levellers, become as rarefied as the opera or a yacht christening.
Even in places where ticket resales are legal, the practice embodies a conflict as old as capital itself. Should social behaviour and standards of acceptability in the market be determined by the (supposed) non-coercive openness of the market itself? Or by some other, maybe higher, social norm? The scalping industry illustrates, to borrow a phrase from Trotsky, the gulf between “their morals and ours.”
Scalpers may not be as unscrupulous as predatory sub-prime lenders or multinational bankers paying out hundreds of millions in bonuses with taxpayer bailout cash, but they belong to same genus. They’re all points on a model of unchecked profitability that stretches out toward infinity, testing the capacity of the market to bend and, eventually, break, like a curious kid poking a hornet’s nest just to see what’ll happen.
These aren’t the practices that tank whole economies. But they’re the things that pollute any pretense of fairness, of freedom, in the free market. Because although some people certainly will, nobody should have to pay a 300 per cent markup on theatre tickets.
At the end of the day, the need to see the Rolling Stones stadium jukebox show circa 2013 is no real need at all.
Scalping.
It doesn’t mean what you think.
Granted, “scalping” has certain unseemly, violent frontier connotations – especially if you’ve ever read Blood Meridian. But its usage in the context of ticket reselling dates back to the mid-19th century, when hucksters would sell off unused portions of railway tickets across the continent. Because railways offered discounts for longer voyages, a scalper could hop on in New York, disembark in Cincinnati, then sell the rest of his ticket to San Francisco for a tidy profit.
news@nowtoronto.com | @johnsemley3000
