Box office masters Ticketmaster have been recruiting and utilizing a network of professional scalpers to cheat their own customer base, according to a searing new investigation by CBC News/Toronto Star. The investigators found that Ticketmaster has been doing something that most had only joked about as a possibility—buying up its own tickets and then reselling them for higher prices on the secondary market, while earning transaction fees all the while.
The journalists involved discovered the operation during a July event called Ticket Summit 2018, “a ticketing and live entertainment convention” at Caesars Palace, Las Vegas. The journalists identified themselves as scalpers and wore hidden cameras, and were immediately invited to join Ticketmaster’s “professional reseller” program.
This program is essentially made up of a powerful network of scalpers, capable of buying thousands of tickets at a time for any given event, which they then uploaded to Ticketmaster’s own TradeDesk platform, “a web-based inventory management system for scalpers.” The tickets could then be sold on TradeDesk for inflated prices, with TIcketmaster making money on fees during every step of the process. Scalpers were likewise compensated with a cut of the profits.
In case you’re wondering, there is indeed a fraud prevention, “buyer abuse” division at Ticketmaster—one instructed to completely ignore the shady goings on associated with the scalper network and TradeDesk. It’s a stunning piece of hypocrisy that flies straight in the face of what then-CEO Irving Azoff said to U.S. legislators several years ago: “I believe that scalping and resales should be illegal.”
Now, clearly, things have changed. Just look at the words of one Ticketmaster employee, recorded by CBC News/Toronto Star during a conference, when asked if Ticketmaster would stop scalpers from getting around ticket-buying limits: “We’ve spent millions of dollars on this tool. The last thing we’d want to do is get brokers caught up to where they can’t sell inventory with us.”
The list of grievances is long and incredibly abusive toward customers. To understand just how much Ticketmaster stands to profit in a typical concert scenario, just look at the following calculation from the investigation:
Resale tickets are particularly lucrative for Ticketmaster because the company charges fees twice on the same ticket. So, for example, if Ticketmaster collects $25.75 on a $209.50 ticket on the initial sale, when the owner posts it for resale for $400 on the site, the company stands to collect an additional $76 on the same ticket.
It goes without saying that Ticketmaster is going to be in some hot water, at least in the court of public opinion, but unfortunately the practice of going out of your way to create a second market in the reselling of tickets isn’t technically illegal in the U.S. Here’s hoping that this investigation opens the eyes of legislators, to the point where they take action to protect the public from the greed of corporations like Ticketmaster.
After initially declining to give a statement, Ticketmaster has now made the following statement, denying aspects of the CBC/Toronto Star story, while tacitly acknowledging that other portions are true:
It is categorically untrue that Ticketmaster has any program in place to enable resellers to acquire large volumes of tickets at the expense of consumers. Ticketmaster’s Seller Code of Conduct specifically prohibits resellers from purchasing tickets that exceed the posted ticket limit for an event. In addition, our policy also prohibits the creation of fictitious user accounts for the purpose of circumventing ticket limit detection in order to amass tickets intended for resale.
A recent CBC story found that an employee of Ticketmaster’s resale division acknowledged being aware of some resellers having as many as 200 TradeDesk accounts for this purpose (TradeDesk is Ticketmaster’s professional reseller product that allows resellers to validate and distribute tickets to multiple marketplaces). We do not condone the statements made by the employee as the conduct described clearly violates our terms of service. The company had already begun an internal review of our professional reseller accounts and employee practices to ensure that our policies are being upheld by all stakeholders. Moving forward we will be putting additional measures in place to proactively monitor for this type of inappropriate activity.