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Taming the Ticket Market: How a Closed Ticketing System Can Beat Back Scalpers and Recapture Lost Revenue

Spring 2020Article
Entertainment & Sports Lawyer: A Publication of the American Bar Association

Graham Fenton, a recent 2020 graduate of UCLA School of Law and current associate at Greenberg Glusker, published "Taming the Ticket Market: How a Closed Ticketing System Can Beat Back Scalpers and Recapture Lost Revenue" in "Entertainment & Sports Lawyer," a publication by the American Bar Association. 

Excerpt

Ticket resale for profit, or “scalping,” is seemingly as old as live entertainment itself. With the advent of computerized “ticket bots” and online secondary markets, what started as a street-corner trade has exploded into a multi-billion-dollar industry. In today’s music market, this is particularly unfortunate as concert revenue often comprises the vast majority of an artist’s income.

Lawmakers have tried and failed to address the problem. Economists, on the other hand, question whether scalping is a problem at all, or rather an illustration of the free market at work. This paper argues that it is the artist’s, rather than the market’s right to determine the price at which tickets reach the consumer. This can eventually be accomplished through blockchain ticketing, but as the industry waits for blockchain technology to reach scalability, Congress should federally mandate a closed-ticketing system that mimics the blockchain.

Part II of this paper explains the economics of the resale market. Part III looks at how lawmakers have tried and failed to curtail scalping. Part IV examines how the industry has responded with limited success. Part V proposes short-term and long-term solutions while Part VI concludes.