General Law Committee

JOINT FAVORABLE REPORT

Bill No.:

HB-5972

Title:

AN ACT CONCERNING THE RESALE OF TICKETS TO ENTERTAINMENT EVENTS.

Vote Date:

3/14/2007

Vote Action:

Joint Favorable Substitute

PH Date:

2/13/2007

File No.:

323

SPONSORS OF BILL:

General Law

REASONS FOR BILL:

To permit the resale of tickets to entertainment events under certain circumstances.

RESPONSE FROM ADMINISTRATION/AGENCY:

Commissioner Jerry Farrell, Jr., Department of Consumer Protection (DCP)

DCP opposes this bill because this would add new licensing responsibilities to the Department's portfolio and would therefore have fiscal implications. This is not an area which DCP receives many consumer complaints. This is a vast area to control and may be challenging, given the far reaching aspects of ticket re-selling on the internet. We await further clarification and language to determine this proposal's impact on the Department.

– Written testimony

Richard Blumenthal, Attorney General, Office of the Attorney General

I urge the committee's rejection of House Bill 5972. This proposal would repeal our ticket scalping law and allow the licensing of ticket resellers.

It is a crime to scalp tickets to Connecticut events. This criminal law also makes it unfair and deceptive trade practice under our consumer protection laws. My office has brought civil actions against ticket scalpers. I have joined with other state attorneys general in seeking changes to the operations of StubHub to ensure that sellers of tickets are aware of Connecticut and other state ticket scalping laws.

Ticket scalping enables an industry to purchase many tickets to popular concerts and sporting events and make significant profit selling those tickets to the highest bidder. This industry corners the market on these tickets, denying access to these events to many less affluent parents and children.

The committee should consider strengthening our ticket scalping law rather than making ticket scalping legal. The most significant loophole is that our ticket scalping law allows ticket scalping in Connecticut to events in other states. This allows companies to set up operations in another state – out of reach of Connecticut law enforcement – and sell tickets from that location into Connecticut. - Oral and Written testimony

NATURE AND SOURCES OF SUPPORT:

Nick Eve, TicketNetwork

TicketNetwork believes a free and open market in ticket resale will benefit Connecticut consumers. It would cause more tickets to be held by Connecticut ticket sellers, rather than the situation which exists now where resale is largely handled outside of the state. Increasing resale within our borders should produce a number of different benefits. We therefore advocate repealing 53289 in accordance with HB 5972. We are one of the four major ticket exchanges providing the technological backbone for the secondary ticket market.

First, it should produce direct economic growth by helping companies like ours, and Connecticut ticket brokers who must now isolate their activities to out of state events.

This should help our local entertainment industry and its ancillary beneficiaries, as resellers will pour more dollars into promoting Connecticut events. We expect ticket prices will generally go down, as local resellers will be able to achieve unique service efficiencies, such as local delivery. An open market will benefit Connecticut residents, such as season ticket holders, and individuals who cannot attend events, as more services will be provided for them to resell their unwanted tickets.

Please level the playing field, and make it possible for Connecticut businesses and consumers to share in the benefits of an industry that has been pushed beyond our borders by Section 53289.

TicketNetwork submitted documentation of statistics below/newspaper articles - available in General Law. Summary of Key Points:

About TIcketNetwork

• TicketNetwork provides software and advertising services to ticket brokers.

• We employ 117 people in a wide range of skilled jobs.

The Maturing Secondary Ticket Industry

• The industry is increasingly competitive.

• The major resale firms depend upon repeat business & customer satisfaction.

• Individual sellers outnumber broker sellers are the fastest growing market segment.

• Structure of the industry adds level of policy enforcement through ticket exchanges.

Benefits of an Open Market

• Direct economic growth through the improvement of Connecticut firms like ours.

• Makes any consumer protection laws CT has much easier to enforce.

• Promotion of CT events with ancillary economic benefits coming from event attendees.

• Ticket prices will be reduced as local brokers can provide services more efficiently.

• Makes it easier to get rid of extra tickets you cannot use.

What Other States are Doing

• States are liberalizing ticket resale laws in recognition of the improved self regulation.

• Laws in other states (like Illinois) are a huge incentive to move our business out of CT.

• New Jersey, New York are trending toward opening the market.

• Online sales make individual state laws unenforceable, so sales usually happen across state lines. - Oral and Written testimony

NATURE AND SOURCES OF OPPOSITION:

Michael Norton, General Manager for Ticketmaster New England

I am here in opposition because we prefer the status quo of the bill that exists today. We believe the people that operate the venues and the promoters are the folks that are the risk-takers. They set the price and are hopeful they've set the price at the right point for fair access to all consumers. Mr. Norton says on a national basis, 60% of all tickets that are available to consumer public for live entertainment go unsold, so it is Ticketmaster who is at risk with respect to their hardware and software being installed in the Civic Center for it to conduct its business and lots of seats that go unsold and therefore no revenue is generated.

He is not sure how many tickets are sold outside of Connecticut for Connecticut venues but explains it depends on whether or not the show is just appearing in Connecticut, or if it will also be appearing in neighboring towns like Boston or Providence.

He also explains Ticketmaster negotiates fees with entities such as the Hartford Civic Center contractually and how tickets are acquired. When a show goes on sale, from ten in the morning on, anyone can buy tickets, and then what the consumer does with those tickets is up for discussion, but they find their way into the secondary market via any numerous amounts of ways. He responds in terms of keeping business in Connecticut or getting business into Connecticut, Ticketmaster would help with respect on how to craft caps on prices, if that's appropriate, what is fair market value. -Oral testimony

Reported by: Juliana Simone

Date: April 10, 2007