Ontario’s plan to crack down on what Premier Doug Ford calls resale “rip-offs” on sports and concert tickets by capping prices at face value is raising questions about unintended consequences.
While the move is being applauded by Ticketmaster’s parent company, other industry players and observers said Friday it could result in higher initial prices for major games and concerts, hurt artists at smaller venues that don’t typically sell out, and lacks detail on what additional extra service fees could be charged.
“I’d like to see some clarity about fees,” said Catherine Moore, an adjunct professor at the University of Toronto who teaches the business side of the music industry.
As first reported by the Star, Ford is taking aim at scalpers seven years after removing a previous Liberal government’s cap on resale prices that was deemed “unenforceable.”
The catalyst seems to be the high cost of Blue Jays tickets during the seven-game World Series last October, when Ford complained about Ticketmaster “gouging the people” for tickets on the secondary market.
Amendments to the 2017 Ticket Sales Act, to be proposed after the legislature returns from its winter break Monday, would make it illegal to resell tickets above the original cost and impose hefty fines.
“We’re putting ticket scalpers on notice: Your days of ripping people off are done,” Ford wrote on social media Friday.
Live Nation Entertainment, which owns Ticketmaster, said it supports the new cap.
“We are in favour of measures that promote fair, transparent ticketing and curb exploitative resale practices,” the company wrote in a statement.
StubHub spokesperson Jack Sterne characterized the plan as “straight out of Ticketmaster’s playbook” because the company dominates the primary ticket market.
SeatGeek, a primary ticket seller as well as a reseller, warned price controls may be “well intentioned” but can result in higher original prices or push resales to the black market where there are no consumer protections against scams like fake tickets.
“Controls won’t eliminate consumer demand, they shift costs in ways that are harder to see, whether through higher base prices or fees buried elsewhere in the transaction,” said vice-president Joe Freeman.
The government did not answer specific questions Friday about what additional service fees will be permitted for resales under the new cap.
“They could be giving a really big gift to Ticketmaster and the other big resellers out there — again on the backs of fans,” warned Liberal MPP Rob Cerjanec (Ajax).
Any additional fees should be on a reasonable flat rate and not a percentage, said Moore, noting it does not cost a company more to process a $500 ticket resale than a $50 one.
There is also the risk that the policy could hurt season ticket sales for teams like the Jays and Maple Leafs, given that many subscribers count on reselling some tickets at a profit to offset the cost of the package, said one industry source, speaking confidentially to discuss internal deliberations.
New Democrat MPP Kristyn Wong-Tam said the price cap is a “very good move” but will require enough resources to ensure strict enforcement.
