I'm an investigative reporter who spent a year investigating the online ticket market for live events. I can now explain its complex machinery, which leaves fans feeling deceived and ripped off. Ask me anything.

What is the legal justification for Delivery Fees when tickets are emailed or downloaded?

This, in particular, chaps my hide.

Great question! Fees were among the most commonly complained-about issue in the whole constellation of problems with this market. The short answer is that there are very few rules governing where companies set their fees. In fact, at a Congressional hearing last February, representatives from Stubhub, Vivid Seats and TicketNetwork all admitted that "the market" is the main driver of what they charge in fees. In other words, they're all locked into a game of chicken with each other. These companies might argue that competition drives prices down; but a lot of government studies have found these fees more often add up to a significant markup.

Meanwhile, as I mention in the piece, there are ways government regulations have alleviated this issue in the past: Like in 2011, when the federal Department of Transportation forced the airline industry to adopt an all-in pricing model that requires carriers to disclose a ticket’s total price – including fees – in their advertising, on websites and on e-ticket confirmations. At least in that case the consumer knows what she's getting herself into right up front.

We used to really love going to shows at The Hollywood Bowl. But, in recent years Ticketmaster has made that unbearable. It seems that as soon as tickets go on sale to the public, they're immediately scooped up then resold right on the Ticketmaster site at 2x/3x/4x the original price! It's absurd! This should be illegal, and it is obviously being done by Ticketmaster itself. Of course, there has been no shows for a year due to the pandemic, but I doubt I'll even look at them once they return. What's the point? I just wish other people would stop buying them, then maybe something would be done.

INTERESTING. You know TicketMaster got in trouble for what you're describing in Canada, right? This was back in 2018. https://www.cbc.ca/news/business/ticketmaster-resellers-las-vegas-1.4828535

You don't happen to have any screenshots/documents showing this, do you?

Roughly how many tickets get immediately scooped up by scalpers? Do the companies involved in the ticket selling get a cut of the marked-up prices? Are there any corrective actions in the works to make purchasing fairer?

The short answer is: As many as they can possibly scoop up, provided that the event is desirable enough for them to make a profit. As I mention in the piece, brokers who use bots are capable of buying literally thousands of tickets in a matter of minutes.

Additionally, at least one secondary marketplace – Vivid Seats – admitted to me that they have no way of differentiating which tickets on their site were purchased initially with bots. There's no way for them to tell what was acquired illegitimately at the initial onsale.

Yes, companies involved in the reselling take a percentage of what resellers earn when they mark up tickets on the site. I believe that varies by marketplace.

And finally, yes. The BOTS Act, passed in 2016, was supposed to crack down on bot use. The problem is, it went years without being enforced. Now, there's something called the BOSS Act (named after Bruce Springsteen, I believe), which is more sweeping and aims to rein in many of these practices.

Leaves fans "feeling" deceived and ripped off? Or actually just deceives them and rips them off?

Ha! The complaints these fans submitted show that they felt deceived and ripped off. Whether or not the companies intended to do that is up to regulators.

Will this ever be fixed or is it the status quo now?

It's absolutely the status quo now, and has been for years. The question of "will it be fixed" is a little more complicated. There is indeed proposed legislation – something called the BOSS Act – that aims to rein in a bunch of these practices. It is stalled at the moment.

Is there a overall best place to buy tickets for sporting events?

I would always recommend doing your best to find the OFFICIAL team or venue website first. Because those tickets are being sold – not RE-sold at a profit – there's no middleman looking to make a profit by marking them up.

That being said, sometimes tickets are legitimately sold out, but available on the secondary market for a premium. To a certain extent, that's just economics in action.

And, finally, it is possible to find deals on the secondary market! If, for example, an event is just hours away and brokers haven't sold all their inventory, they may lower prices by a LOT to just avoid eating the cost they've already incurred. So if you're OK with committing last-minute to a game or concert, it doesn't hurt to look at the secondary market just hours before the event starts. You might find a desperate broker looking to offload inventory and break even!

Are there any 'decent' resellers?

Yes. And the secondary market is not in and of itself bad or exploitative. In fact, in many cases, it's the ONLY way to get tickets! Tickets are a weird economics lesson: They're almost always underpriced, and supply is inherently limited. So sometimes, if you really want to see a show or game, and it's sold out, you have to pay "the market rate" – i.e. whatever the tix are going for on the resale market.

Couldnt this be solved via an auction mechanism for tickets? The problem is that the tickets are sold at a value that is discounted from the amount that fans are actually willing to pay, so the bots/brokers pocket that difference. If each ticket were sold at an auction rather than on a first come basis, they could sell for higher and take out the middlemen. Is that a correct way to think about it?

This is a really, really astute observation! You're totally right that tickets are inherently underpriced. Economists have spilled a LOT of ink on this issue over the years. There wouldn't be a resale market if people weren't willing to pay more, right?

But here's the thing about an auction: Artists and venues DO NOT want to do this. It's incredibly important for them – not just from an optics standpoint, but also from a long-term business sustainability standpoint – to show that their products are available to common people, not just the super-rich. To paraphrase one economist who studies this: "Nobody wants to go to a concert full of just rich guys."

One of my favorite papers about underpricing is this one, by two econ professors in Arizona. It goes into a lot of detail about why tickets are underpriced, and why it's not as simple as pricing them at "market rate."

Thanks for your ama.

What ist the scammiest company in the ticket market?

That's a really complicated question. One way to understand it is, "which company has been disciplined the most for practices regulators say are deceptive/exploitative?" TicketNetwork is an example of a company that continues to get slapped on the wrist for violations. Yet TicketNetwork is not the largest player in the market. So you take it with a grain of salt. Even if they are employing practices that fans find deceptive, how many fans are we talking here, relative to bigger resale companies?

In that same vein, as I report in the piece, Ticketmaster has its own share of problems, too. So do Vivid Seats, Stubhub, etc.

Do you think new technology like blockchain can be used to turn the online ticket market into a safe/verified/no-nonsense-fees market?

Here's what I'll say about that: As long as there has been a primary ticket market, there have been smart, sophisticated actors in the secondary market who find ways to scoop up and resell inventory.

After more than a year of reporting on this issue, I feel confident saying that no matter what tech gets employed, this cat and mouse game will continue. Primary sellers may employ new measures, but resellers will always find a way around them.

Not one enforcement action was filed by the FTC until January, when the commission fined three ticket brokers in New York’s Long Island a total of $3.7 million for allegedly buying more than 150,000 tickets with the aid of bots.

Is my math right, is that a less than $25 fine per ticket? Do you know what's the average profit per ticket these resellers are making? Because that sounds to me like not a lot, I'd assume they made more than $25 per sale.

Great piece btw, love Reveal.

Haven't crunched the numbers myself, and I'm not sure that's exactly how it works. But I do know this: Rebecca Slaughter of the FTC emphasized that this fine was so big that it would disincentivize bad actors who previously might have viewed fines as a mere slap on the wrist - or a cost of doing business.

I haven't read the article yet but if you get put in charge of the National Ticketing Agency, what do you implement to combat the issues that you uncovered?

I am but a lowly journalist, reporting on issues for lawmakers to sort out!

Yet I would venture to say that a lot of lawmakers are excited about the BOSS Act, introduced in 2019, which builds on earlier federal regulations designed to make the ticket marketplace more equitable for fans. Learn more about the BOSS Act here.

Do you think things will ever change or get better or do the ticket companies have too much power at this point?

There's definitely legislation aimed at making the environment more transparent for fans. It's called the BOSS Act. https://pascrell.house.gov/news/documentsingle.aspx?DocumentID=3931

But I will say this after a year of reporting: As long as there's primary market tickets that are underpriced, there will be creative actors in the secondary market looking to turn a profit. Enforcement might just continue to be a game of whack-a-mole.

Is there any evidence that bots and fees are driving down demand for tickets from regular people? For myself, I really have no interest in going through all these hoops and spending all this money for a two- to three-hour experience. I would do it for a top, top artist I was keen to see, but for anyone below that, forget it.

Or maybe the demand is inelastic enough that no matter what these brokers do, their product still sells?

Quantitatively, I haven't seen any evidence of that. But I have, of course, read plenty of complaints from dejected fans like you who are so discouraged that they've given up trying.

My guess, unfortunately, is a cynical one: That even if someone like you drops off, there are plenty of others lining up behind you, hoping to get tickets. So the brokers never fear that the demand won't be there. At least, not yet.

What’s the best way to avoid all the fees and junk they try to place on you? In other words. Tickets cheap how?

Good Q! I've answered it higher up, I think. Long story short: Find the actual venue's website. Or just give them a call.

If tickets are indeed sold out there, the secondary market is your only real chance.

And btw: Both the primary and secondary markets will slap on fees. It's just that often, in the secondary market, what you're getting are fees stacked on top of an already marked-up price.

Based on your well-written and fascinating article, it seems like a large percentage of the people getting "scammed" are merely uneducated or not careful about using their critical-thinking skills to make sure they're purchasing tickets from an official venue or venue's chosen vendor instead of these "white-label" sites. At the risk of sounding victim-blamey, what do you suggest as a remedy or solution to what appears to be carelessness on the part of ticket-buyers?

Thanks for the Q! Here's what I'll say about that: It's definitely not just hapless, Luddite grannies who end up feeling exploited. As my story shows, you can have a guy like Corey Pender, a 32-year-old tech-savvy software solutions worker. A season ticket holder who's been using the secondary market for years.

And the complaints I reviewed? They ran the gamut of people – those buying tickets for big musical festivals usually frequented by young people; people looking for Hamilton tix, etc.

I'd also add that I, a 34-year-old investigative reporter, got tricked by one of these sites back in 2019.

So sure. You could argue that the problem is the consumers not paying attention. But you could also just as easily argue that government reports, regulations, and consumer complaints suggest that these sites are designed to deceive.

Are there particular companies that you'd suggest if we're going to buy tickets?

I answered this a bit above. It's less about trusting one company and more about being careful in your buying process.

To understand what the OFFICIAL cost of a ticket is, it's super important to find a venue's official site. That said, you sometimes can find deals on the secondary market – especially if you're OK with buying right before a game or show starts.

So, I've used Vivid for baseball tickets (that's all). One thing I noticed was I *was able* to get good seats for a more reasonable and cheaper price than the stadium was selling them for. My theory was that people were likely buying season tickets and then renting out the seats for games they weren't interested in attending. Now that I've read your article, I'm wondering if people are just buying season tickets to make it a business? But, I've noticed that, even with a team that went to the world series, there were (frequently) lots of empty seats during the game while people were standing outside trying to get in. My question, as it follows is, how does anyone make money reselling these tickets (since they seem to be at a loss)?

For sports events, sometimes season ticket holders can sell one or two games against popular opponents for enough money to underwrite the whole season, then they have the luxury of deciding on the fly whether to attend the other games since the tickets were essentially free.

Good point!

Yeah! I would also add that the value of a seat, per game, probably fluctuates a lot. So if you were a season ticket holder who came down with an illness last minute and needed to offload tickets for a game starting in like two hours, you might just try to recoup SOMETHING of what you paid up front. Then, as Alexis mentioned above, as the playoffs approach (or as a big-name competitors come into town), you can make up the difference for a game with higher demand.

Have you heard anyone else with the opinion that the system isn’t all that broken? Basically we have an inefficient auction system. The alternative would be to just have a legit auction for the tickets but there are planning and time constraints.

Hey! The auction model is a problem for the reasons I went into above. Long story short: It's actually not in an artist or venue's interest to sell to the highest bidder. They have to counter-balance that profit opportunity with longer-term goals, such as being perceived as "accessible" to common people. Even major acts like Taylor Swift worry about this a lot. It's a legit business concern. So there is a long-term economic incentive to keep prices low/accessible. In some cases, an auction would just fill your game or concert with rich guys in boat shoes and salmon-colored khaki pants. No one wants that. Lol

So BOTs act failed, FTC is toothless... How much would Pascrells bill help if passed?

What else do you think needs to happen?

Pascrell's bill is more sweeping and sophisticated; it also tackles so many of the issues I address in the piece, not just bots.

But you're right ... there is a bit of a structural problem with enforcing these rules. Most regulatory agencies aren't equipped to go after lone bad actors. Rebecca Slaughter, the acting FTC chair, told me as much.

Regulators tend to wait for a tsunami of complaints about one entity to come in, then they marshal their resources and try to make an example out of that actor, hoping that others will be scared into complying.

So when you have a diffuse collection of companies – some small, some very large, some who employ affiliates – all doing questionable things, it's hard for regulators hearing about a problem here and there to pick out big patterns.

Plus, ticketing is largely regulated at the state level. So that makes things even harder in some cases.

Hypothetically, how do you think eliminating platform fees would impact the speculative ticket market?

I think more than eliminating fees, the speculative market could be better regulated if consumers understood what they were getting themselves into.

Companies I spoke to claimed they were clearly disclosing when tickets were speculative. But when I asked whether they thought consumers would willingly purchase tickets they knew to be speculative, I got a different answer. I think it's fair to assume that if consumers actually understood what they were getting themselves into, there would be a lot less caution – and a lot less willingness – to buy spec tickets.

With so many tickets being "electronic" -- a buyer just gets a PDF that they print or an image on their smartphone that gets scanned at the show -- aren't there a lot of tickets being resold multiple times? Seems like anybody could print out 100 tickets for seat K1 and the victim won't find out until they show up and are denied entry.

Interestingly, my reporting indicated that this phenomenon – outright fraud – is not that much of an issue. This, I think, is because a lot of the people reselling tickets are professional brokers. They have long-term business concerns, and they don't want to go to prison. So they're operating legally.

What you're describing sounds more like something someone desperate to make a buck would do. Someone who didn't care if they were banned from a resale marketplace. Most brokers are required to play the marketplace's rules – and they do, because they're trying to run businesses.

Which event were trying to get tickets to?

Sacramento Kings vs. Philadelphia 76ers in Sacramento. My best friend is a Sixers fan.

My family bought some Very Expensive concert tickets to see S Korean K-pop band BTS in May 2020, and that concert is “postponed indefinitely” due to covid. It’s not CANCELLED because then they’d have to refund I guess? We don’t seem to have any recourse with the ticket agency. We’re trying to claw back our money by working with the credit card co. Are we just hosed?

Great Q. There have actually been a few lawsuits over this in the wake of COVID. I think a few companies were accused of retroactively changing their terms and conditions. Here's an example of one: https://topclassactions.com/coronavirus-covid-19/vivid-seats-class-action-alleges-shameful-response-to-covid-19/

Thanks for sharing the article about your investigation. This definitely seems like a scam to me. Have you heard anything from the FTC regarding their staffing levels with the new admin?

All I know is that they're hoping to get more resources under Biden for consumer protection initiatives.

There’s been lots of talk in the blockchain community about it being a potential solution for some of these issues plaguing the ticketing industry. Have you looked into any of the blockchain-related solutions? Are any of them viable solutions?

Blockchain is not something I really looked into! Fascinating. I would be thrilled to better understand how, specifically, blockchain would be used to help fix these issues. Got any links?

Thank you for writing about this issue!

Did you exclusively investigate this story for a year or do you have multiple stories/investigations going on at the same time? Did you publish multiple articles as the investigation unfolded? I wonder what kind of deadlines you work under.

I had several other stories and projects cross my desk. Also, the process of submitting records requests and then waiting for them to come back necessarily involves a little downtime. Such is the nature of investigative reporting.

Do you know of any interesting ways artists have tried to prevent scalpers, for example printing photos on tickets?

Yes! Artists have gotten pretty creative with this.

Taylor Swift: https://globalnews.ca/news/4222047/taylor-swift-ontario-ticket-sales-act-scalpers/

Bruce Springsteen: https://www.marketplace.org/2017/08/29/can-bruce-springsteen-vanquish-ticket-scalpers/

Pearl Jam: https://ultimatepearljam.com/pearl-jam-scalping-tickets-gigaton-tour/

Of course, it helps if you're a massively wealthy and popular artist.

I've heard the argument that brokers buy tickets to make sure events sell well. My favorite baseball team (Chicago Cubs) doesn't seem to need the help from the secondary market but still brokers hold literally thousands of tickets for each game, it's incredibly frustrating. Are any major sports teams working against the secondary market to keep tickets accessible to the regular folks?

I'm actually not sure about this one. But my guess would be that in some cases, MLB teams are actually OK with the secondary market playing a role. I would posit this for a couple reasons:

• (In non-COVID times, at least) there are a lot of games, and a lot of seats, which means that the whole "scarcity" question is less of a major problem. Like, how often do we see empty seats in baseball stadiums? I think these teams are probably happy if there are butts in seats, period.
• Also, sports introduce a wrinkle that other things, like theater and concerts, don't: season ticket holders. People who, in other words, have already committed to a major purchase but then can't make every game. I think teams are totally fine with those folks using the secondary market to make sure some other fan enjoys the experience. And because of the point I made above, I'm not sure you'd see a ton of dramatic markups for like a late-July Colorado Rockies game, for example.

Why should fans be more furious with this deceptive mechanism than we already are?

I think my reporting shows that fans have been pretty steamed for quite a while! And that efforts to make things right for them have fallen short, again and again, for years.