My thanks to Chair Ward and members of the Committee for the opportunity to appear and present remarks in opposition to AB 1720. The Progressive Policy Institute (PPI) urges the Committee to reject invasive regulatory price controls in the resale ticket market.
The economics of price caps on resale ticket prices and fees are simple. Price caps will eliminate the only source of competition in ticketing, driving fans back to Live Nation-Ticketmaster where they have been ripped off by monopoly ticket fees for decades.
Price caps will decimate the resale market. The resale market serves as “clean-up” hitter for primary market ticket shortages caused by the exercise of Live Nation-Ticketmaster’s monopoly power, underpricing of tickets, and ticket “holdbacks.”
Resale provides fans with a functional, competitive alternative for buying tickets – not to mention putting more “fans in seats,” for the benefit of artists and fans alike.
All of this will come crashing down under resale price caps. Invasive price controls will replace balancing supply and demand with resale ticket shortages, driving up ticket prices, guaranteeing half-full concert halls, and prompting the exit of online marketplaces from the market.
With a resale market that is debilitated by invasive price controls, ticket buyers will have two highly undesirable alternatives. The first is to go back to shadow markets, where fans will be subject to the fraud and abuse that occurred before the advent of competitive, online resale marketplaces.
The second outcome of a hamstrung resale market is that fans will have no choice but to go but back to Live Nation-Ticketmaster. There, the monopoly will sell more tickets and collect more in monopoly ticket fees. Price caps, therefore, hand the monopoly even more market power.
Finally, any state regulatory system that displaces competition in resale could legally immunize market participants from antitrust liability. This includes Live Nation-Ticketmaster, which is currently ensnarled in one of the largest antitrust cases in U.S. history.
PPI urges the Committee to be skeptical of “support” for resale price cap proposals, which are running aground in multiple states. Live Nation-Ticketmaster supports resale price cap regulation because it protects their monopoly profits.
Venues support price cap regulation because it guarantees a continued share of monopoly profits from their exclusive contracts with Live Nation-Ticketmaster. Artists support price cap regulation because their revenues come largely from the primary market and they dislike resale because they do not collect revenue “royalties.”
The only stakeholders in the market that do not like resale ticket price caps are consumers. And without consumers, there would be no live events ecosystem.
For all these reasons, resale price caps will put consumers, artists, and the entire live events ecosystem at even more risk. PPI urges the Committee to reject AB 1720, avoid invasive and distortionary regulation of the resale ticket market, and instead focus on genuine consumer protection such as price transparency, ticket transferability, and banning bots and speculative ticketing.
Thank you for the opportunity to appear today and I urge you to read PPI’s recent report, State Regulation of the Resale Ticket Market: Risks to Competition, Fans, and Antitrust Enforcement that I submitted into the record with my written testimony.
