By Luke Broadwater, The Baltimore Sun
8:47 PM EDT, July 2, 2013
Ticketmaster and other ticket sellers could add unlimited fees to the price of admission for concerts and sporting events under legislation approved by a key City Council committee on Tuesday.
The committee gutted a bill that sought to limit "convenience" fees for processing and other services. The fees are sometimes split by the ticket sellers and the venues hosting the events.
The decision won praise from ticket sellers and their venue clients — who packed the City Council chambers with lawyers and lobbyists — but criticism from a consumer rights group that advocated for lower fees.
"The headline should be: 'Ticketmaster 1, Consumers 0,'" said Marceline White, director of the Maryland Consumer Rights Coalition.
White said the bill allows ticket sellers to reap a "handsome" profit. "They voted to support the interests of corporations as opposed to city residents," she said of City Council members.
But Frank Remesch, general manager of 1st Mariner Arena, had warned that large acts, such as Bruce Springsteen, could skip over Baltimore for Washington or Philadelphia if the council limited convenience fees.
"They'll bypass Baltimore," he said.
City Council members had pledged to limit the fees in Baltimore, which were the subject of a federal lawsuit. But four council members voted to send a weakened version of the bill to the full council, arguing that limiting fees in Baltimore would put city businesses at a disadvantage to other jurisdictions.
Councilwoman Mary Pat Clarke, who represents North Baltimore, was the lone vote against the amended bill, which requires only that vendors disclose their fees at the time of sale.
The bill's sponsor, Councilman Carl Stokes, who doesn't sit on the committee that considered the bill, had sought to cap the amount of fees to no more than 15 percent of a ticket's stated price. After the vote, he described the amended bill as now useless.
"They might as well just throw it away," he said. "All it does is allow the exorbitant fees to go even higher now. There's no limit to how much price gouging can take place in the city of Baltimore."
Stokes' bill was designed to reduce by about half the percentage of convenience fees some entities charge in Baltimore. He said Ticketmaster routinely charges convenience fees of up to 25 percent of a ticket's price.
"The bill was gutted and changed because of the lobbyists and the influence they had on the political process. And so the consumers bit the dust," he said.
The bill also would have required businesses to disclose the fees in advertising in Baltimore, another aspect of the bill that was eliminated. Council members left intact language requiring disclosure at the time of sale.
The bill would have created a tiered system for capping the fees. It would have limited fees to 15 percent of the first $50 of a ticket. An additional 10 percent could be charged for the next $50 to $150, and another 5 percent for amounts above that.
Stokes said at least one club in Baltimore is charging convenience fees of up to 80 percent for ticket processing. He said venue operators use the convenience fees to avoid paying the city's arts and amusement tax, which takes 10 percent of ticket sales for the city's coffers. He estimated that the city is missing out on $500,000 in revenue from the uncollected taxes, because vendors don't pay taxes on the service fees.
Councilman James Kraft, chairman of the judiciary and legislative investigations committee, lamented voting for the amended bill but felt compelled to help smaller venues and organizations that objected to the caps. He called it a "damn shame" that large corporations were being allowed to continue to tack on high fees in Baltimore.
"We're talking about Live Nation and Ticketmaster," he said. "They are a monopoly everywhere."
Among the groups that testified against the bill were the Baltimore Ravens, Major League Baseball, 1st Mariner Arena, the Lyric Opera House and Baltimore public schools. While a city schools official said they don't charge for tickets to school events, they didn't want their future options to be limited.
Michael J. Mellis, general counsel for Major League Baseball Advanced Media, an arm of the professional sports organization, said Internet ticket vendors need the fees to be financially viable, and that fans like the convenience of buying tickets online.
"We make every effort to avoid service charges and keep them as low as possible," he said. "Fee caps are unnecessary and could have an adverse impact on the ticketing services provided in Baltimore City."
Councilwoman Rochelle "Rikki" Spector, who introduced the amendments to the original bill, said customers have a choice and can skip fees if they buy tickets in person. She said she worried about losing musical acts to other venues if Baltimore moved to limit fees.
"It was definitely a dangerous place to go in terms of keeping us competitive for entertainment," she said. "It would have cost us business. It would have cost us jobs."
Councilman Bill Henry, who voted for the amended bill, said he believed the market would determine how high user fees would go.
"Clearly people are willing to pay," he said.
The legislation comes after the council voted in March to allow companies such as Ticketmaster to continue to charge unlimited fees when selling tickets to events in Baltimore. The council approved that bill to counter a court ruling that the fees are illegal under the city's anti-scalping law.
Ticketmaster and its owner, Live Nation Entertainment, have declined to comment on the issue.
Andre Bourgeois, a 50-year-old Inner Harbor resident, sued Ticketmaster and the Lyric Opera House in 2011 after being charged $12 in user fees on a $52 ticket to see singer Jackson Browne in 2009. His hope was that Ticketmaster would be forced to stop charging the fees for events in Baltimore — and would issue refunds to customers who have paid the charges.
According to his lawsuit, Ticketmaster takes in about $1 billion annually from user fees on $8 billion in ticket sales worldwide. The suit does not estimate how much of that comes from Baltimore.
In 2011, Live Nation agreed to pay $22.3 million to customers to settle a class-action lawsuit over delivery fees.
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