City politicians rush to save Ticketmaster's user fees
By By Luke Broadwater and Wesley Case and The Baltimore Sun
Feb 23, 2013 | 12:47 PM
Musician Jackson Browne's managers were so excited when they heard Maryland's high court had struck down Ticketmaster's unpopular user fees in Baltimore that they promised free lifetime tickets to the city resident who had filed suit alleging he'd been ripped off by "exorbitant charges."
The Ravens, Orioles and Baltimore concert venues — along with city politicians — didn't share the singer's jubilation.
Concerned that Ticketmaster and other ticket vendors might refuse to handle events in Baltimore, the City Council is poised to carve out an exception to its long-standing anti-scalping law, which bars companies from charging fees in excess of 50 cents on top of a ticket's stated price. A council finance committee is scheduled to vote this week on a measure aimed at allowing Ticketmaster to continue to charge its fees.
"I don't understand why the city would want to change a good law that protects its citizens," said Andre Bourgeois, the 50-year-old Inner Harbor resident whose legal victory stunned area businesses last month. The anti-scalping law "just means that the face price of the ticket has to be what the ticket actually costs," he said.
At issue are service fees Ticketmaster charges on top of the stated price of a ticket. As any concert-goer or sports fan knows, these fees can sometimes spike the total cost of a ticket to more 120 percent of its stated price.
Bourgeois filed suit against Ticketmaster and the Lyric Opera House in 2011 after being charged $12 in user fees on a $52 ticket to see Jackson Browne in 2009. His hope was that Ticketmaster would be forced to stop charging the fees for events in Baltimore — and to issue refunds to customers who have paid the charges.
According to his suit, Ticketmaster takes in about $1 billion annually from user fees on $8 billion in ticket sales worldwide. It does not estimate how much of those sales come from Baltimore.
In January, Maryland's highest court ruled that Ticketmaster's fees violate a 1948 Baltimore ordinance designed to curb scalping of Navy football tickets. What happens next — whether Ticketmaster should be ordered to stop charging the fees, and whether customers should get refunds — is still to be decided by the federal court in Baltimore.
In 2011, Ticketmaster owner Live Nation agreed to pay $22.3 million to customers to settle a class action lawsuit in California over fees.
The Baltimore City Council bill would create an exception to city law making clear that Ticketmaster and similar companies may continue to charge their fees.
Ticketmaster and Live Nation declined to comment for this article. The Lyric Opera House also declined to comment.
Bourgeois thinks the City Council should leave the anti-scalping law as it is.
"Ticket pricing should be transparent and honest," said Bourgeois, who works in sales. "There should be one price for a ticket. No add-ons."
His position resonates with many concertgoers, who complain that ticket vendors seem to go out of their way to add new fees.
"They're like, 'We had to go to the trouble of selling you these tickets. So, there's a fee for that. And, you wanted to pick up the tickets, too? You'll have to pay for that,'" said Tyler Laporte,music director at Towson's WTMD radio station.
"And there's this time limit to buy the tickets, so you feel pressured to buy them or you lose your place in line. They straight up hold you hostage," Laporte said.
Kevin Cross, 35, of Bolton Hill — who recently paid $25 in processing and service fees for tickets to a Belle and Sebastian show — says his main complaint with the charges is their seemingly arbitrary nature.
"What frustrates me is it's not the cost of doing business," said Cross, an attorney. "It doesn't cost $25 to do an online transaction. It doesn't bear any relationship to the cost of the transaction or the cost of holding the concert."
But the venues that rely on companies like Ticketmaster, Ticketfly and MissionTix say they don't want to be in the business of processing large volumes of tickets, so they appreciate the service such vendors provide.
City Councilman Carl Stokes, who introduced the bill seeking an exception for the ticket companies, said the Lyric Opera House, Ravens, Orioles, Hippodrome and the National Aquarium are among the organizations asking the council to change the law. Although Orioles tickets are now sold through a different vendor, the court ruling would apply to those user fees as well.
"One big concern is Ticketmaster would say, 'We're not doing business in Baltimore anymore if we can't charge more than 50 cents,'" Stokes said. "Fifty cents is much too small an amount for their services."
Though Stokes' bill would set no limits on the fees ticket vendors may charge, he says the measure is designed to buy the council time until it can fully consider and propose a new regulation on user fees. That could limit the fee to a percentage of the ticket price, he said.
"Many of the vendors want us to do away with the law entirely," Stokes said. "We have said, 'No, we won't do that. There is a consumer interest here.'"
Ryan O'Doherty, spokesman for Mayor Stephanie Rawlings-Blake, said the administration "supports a bill that allows local culture venues to continue their long-standing operations, including reliance on third party ticket distribution services, temporarily while the City Council modernizes the law with regard to ticket sales."
He said the mayor views the legislation as a "temporary solution to deal with the court ruling" while the council crafts an "appropriate law for the long term."
Ravens spokesman Kevin Byrne said the organization believes the current laws are "antiquated."
"We are in support that the law be updated to meet the current practices throughout the country," he said. "Ticketmaster provides a convenience to fans and to teams and other entertainment providers. They have costs to their infrastructure, as do other companies involved in the same business."
But the Maryland Consumer Rights Coalition thinks the city shouldn't be in a hurry to do away with its anti-scalping law.
Marceline White, the coalition's executive director, said she wants the city to enforce the law by imposing the statute's $1,000 fee each time Ticketmaster breaks the law.
The council's bill "would, in effect, block enforcement of the city's anti-scalping ordinance against Ticketmaster even as the same law continues to be enforced against Baltimore citizens," she said. "There should be one standard that both individuals and corporations are held to."
Not everyone sees the issue in black or white.
Brian Shupe and his wife, Abigail Janssens, owners of the 8x10 club in Federal Hill, have sold tickets through Ticketmaster since they took over more than eight years ago. Shupe believes the surcharge fees are too high, but doesn't equate them to scalping.
"I am not a Ticketmaster apologist," Shupe said. "However, Ticketmaster has to charge fees to do what they do."
The surcharges for 8x10 tickets, in particular, can be hard for consumers to accept, Shupe admits. Most of the club's shows are in the $10-$15 range, but Ticketmaster adds $7.90, which includes a $2 "facility charge" and $5.90 "convenience charge." Still, he says, the benefits of using the company far outweigh the costs.
For example, Shupe said, using Ticketmaster can ensure that a customer is admitted to a venue, even when he or she loses a ticket.
"When people come to my venue and say, 'I ran my tickets through the wash,' the only way I can verify that is to call Ticketmaster," Shupe said. "They print out another ticket. [The customer] gets in the show with no questions asked."
Meanwhile, rivals to Ticketmaster say they, too, need to charge more than 50 cents per ticket — but not as much as Ticketmaster.
Founded in 2008, San Francisco-based Ticketfly has emerged as a local and national competitor. On Jan. 3, Rams Head Promotions — which owns Rams Head Live in Baltimore and Rams Head on Stage in Annapolis and operates the Pier Six Pavilion — announced that its tickets would be sold exclusively through Ticketfly. Rams Head venues had previously used ShoWare, and to a lesser extent, Ticketmaster.
Will Payne, marketing communications manager for Ticketfly, says his company's fees are, on average, 30 percent to 50 percent lower than Ticketmaster's. He says the surcharges are necessary to cover the costs and salaries of a professional-grade ticket system.
"As a ticket provider, we don't make anything off face value," he said. "The only way we make money is from the service fee."
Payne said the best way to avoid surcharge fees is to buy tickets at a venue's box office, not online. But that's not always convenient.
"We're trying to save you time and money," Payne said. "What if the Rolling Stones came to town? Are you really going to camp out for two days?"