In the joy of completing my math project, I forgot to mention two important things…to me, at least.
First, in July, Pearl Jam made a grant in my honor to support youth soccer in the DC area.
Pretty sweet.
Another cool thing.
Friend of the newsletter, podcast, and all of my assorted adventures, Tim Chambers, is participating in Thames Path UltraChallenge on 12-13 September.
This has become an annual tradition for him.
If you’ve never had the chance to meet Tim, you should. He’s an A+ dude and someone I am fortunate to get to hang out with every time I’m in London. He’s taken me on some amazing tours of London.
He’s raising money for CALM. Which is reason enough to highlight what he is up to.
Yesterday’s post generated a lot of back-and-forth on social media, in my inbox, and in the Talking Tickets Slack Channel.
Almost all of it was constructive.
I have time for constructive discussions.
My favorite one is this one:
I mean: “You suck, bro. I don’t even care, bro. No one likes you, bro. Let me tell you how much I don’t like you while asking you to comment about another topic that is important to me.”
Amazing work.
Too good.
Bless your heart.
The reaction to the piece was a map of the industry’s defenses.
Instead of answering them one by one, I’ll put together a post to address them for everyone’s benefit.
As a foundation for this follow-up, a couple of folks questioned my understanding of the secondary market.
Which is amazing to me.
The BBC called me “The King of Tickets” on air. I use the title jokingly because, c’mon, it’s the BBC calling me “The King of Tickets” to millions of viewers and listeners.
I’d be a moron not to use the title…even in jest.
The foundation of that name was built by my day-to-day work in the secondary market.
I was a partner, a manager, or an operator in several businesses that used the secondary market exclusively or heavily.
So I’ve managed inventory with long time horizons, priced billions of dollars in tickets without the aid of an algorithm, made decisions on distribution, and managed day-to-day decisions.
These weren’t small operations.
The smallest sold mid-7 figures annually. The largest was mid-8 figures.
At one point, when I was handling the premium inventory for several VIP credit card programs…I was possibly the most influential broker in the world.
So to say I just don’t get the business is fucking stupid.
What’s accurate:
I did the job…as well as anyone.
I saw where the business was headed.
I didn’t like it.
So, I went and did something else.
A History Lesson
History doesn’t repeat itself, but it does rhyme.
The argument I made yesterday has more sources and more math…but I’m not making a fundamentally different argument than I made a decade ago, when ScoreBig collapsed and left lots of fans out in the cold.
At the moment ScoreBig went under, the NATB’s brokers stepped in and filled the void that ScoreBig left, putting fans first…at their own expense.
It was a simpler time.
In 2016, I wrote about the ScoreBig failure.
The company failed. This left partners out of money and fans without tickets…often for once-in-a-lifetime experiences.
The NATB had a policy of “Resale Done Right,” and its members lived up to that motto.
What ScoreBig should have been is a moment of clarity that the fan must come first and if that wasn’t the case, the relationship between fan and content producer would be broken.
Crickets.
Not crickets. A lot of lip service.
Instead, the logic of capital was allowed to do its work…unimpeded for years.
Commoditize everything. Extract maximum transaction volume. Accumulation is the only thing that matters.
It is hard to look at the business today and say that everything hasn’t gotten much worse.
Live Nation’s power became so consuming and corrosive that the federal government stepped in. The DOJ filed a suit. A jury found the company guilty of holding an illegal monopoly.
Discovery was a confession: “…robbing them blind, baby.”
The moves brokers use have gotten more inventive and more sophisticated.
Yay, innovation.
They’ve also turned the ticket-buying process into a game of roulette.
Bots. Incognito browsers. Buying teams. Spec listings.
The fan isn’t a fan. The fan is a mark.
Prices have gone through the roof…for everything.
It’s a $30 cover to see a glorified bar band at a dive bar in Rockville.
A cheap night out has become a major financial decision. Get-in prices make fans do double takes.
The industry calls it “market pricing.”
The fans…call it something else.
Fans still buy tickets. But they aren’t happy about the way they are treated.
Fans know the game is fixed.
They know that they are being gouged and abused on both sides.
They keep buying because there is no alternative. For now.
The argument that fans are lazy, uneducated, or impatient doesn’t carry a lot of weight with me because it shouldn’t take a PhD in tickets to buy one.
But how do you think this really ends?
The Arguments Folks Made
The responses I received were not unique.
They were the industry’s best arguments made by articulate voices…mostly.
But not unique.
I will take them seriously because they are the best case that the industry can make.
But even that best case is built on a crumbling foundation.
The group of responses that said something along the lines of:
- “Bro, arbitrage.”
- “Some people will make money and some won’t”
- “Primary is so stupid, leaving money on the table.”
These are all the rawest forms of the Check Casher.
No talk of liquidity. No mention of customer savings. No concern about anything but “I got mine.”
I don’t find these to be credible arguments.
These are the types of responses that justify every negative perception and every regulatory action.
They are just the cold, hard face of a business model built for extraction.
The fan is a counterparty. The ticket is the spread. The transaction is all that matters.
Another set of arguments falls into the “tradeable security” and tactical fixes camp.
“Let’s require instant delivery.”
These are pragmatic, technical fixes.
They offer solutions, but never deal with the structural problem.
The Black Market threat is always there, often invoked…reaffirming the dependency on brokers.
The alternative is just “naïve.”
The logic is: regulate us and create chaos.
My challenge is that the chaos is already there, and it isn’t even hidden.
It is rules masquerading as freedom.
The final set of arguments are slightly more sophisticated and fall into a few buckets:
- “Separate the brokers from the marketplace.”
- “The broker has no control over buyer’s fees only the marketplaces can do that.”
- “Excessive fees…that’s on someone else. Talk to them.”
These aren’t unthoughtful ideas.
But the logic proves my point.
The argument boils down to the marketplaces are untrustworthy. Fans don’t know the legitimate brokers. The costs are unreasonable and/or hidden in the transaction flow…and brokers can’t be held responsible for that.
Thanks for making my argument for me.
The “free market” logic that the industry used for years to underline the importance of its existence is crumbling…by its own logic.
The solutions the secondary market is offering aren’t “free market.” They are rules and regulations.
Instant delivery. The BOTS act enforced. Rules.
Conflicts of interest scrutinized. Enforcement.
That’s a regulated market.
The only time the “free market” comes up is when it benefits a broker who wants to let their “arbitrage” run free.
That’s not a philosophy. That’s a justification.
This is the contradiction that the industry’s defenders don’t want to see. They are inside a mental model that no longer matches the world that exists around them.
I call it Economist Brain.
Economist Brain is the inability to see the world around you because you are ideologically committed to a worldview…as long as it works for you.
It isn’t stupidity. It isn’t malice. It’s trained blindness.
The Economist Brain isn’t looking at the world. It is looking at a model of the world…and it’s been rewarded for it.
Until now.
“Arbitrage” isn’t a deliberate lie.
It’s just the embodiment of the saying, “…knows the price of everything and the value of nothing.”
“Separate the marketplace from the broker” isn’t a cynical dodge.
It’s just the confusion inherent in a business where most brokers never deal with a customer and are totally fine with that.
Meaning: you can’t separate one from the other.
These defenders aren’t evil. They aren’t dumb. They are just blind to the environment that has created the conditions for these regulations and changes.
Change
The world is already changing.
I’ve seen the business change several times over the years…both sides.
The legal ground is shifting.
It’s lurching, uneven, ugly, and, most of all, inconsistent.
The federal government has moved from lax enforcement to a renewed antitrust focus to open corruption in the last 15 years.
But the states have started to move in consistently.
International regulators are cracking down.
Private cases on anti-competitive behavior are gaining popularity and real wins like MJ winning against NASCAR.
This is the environment that these ticket stories exist in.
Keep pretending the rules are the same and nothing is ever going to change.
Good luck.
Things are already changing.
The rules are moving. The arguments for the secondary market are made for a reality that’s already gone.
The fan voice is cutting through. Legislators are acting consistently…TBF, I’m as shocked as anyone.
The math is public. Even if it is only directionally accurate, it gives fans and legislators incentive to act.
The “free market” logic is fading…at the hands of the most eloquent defenders.
I’m not telling you the secondary market is good or bad, right or wrong.
In fact, if I said such a thing, I’d be a hypocrite.
All I’m doing is pointing out the obvious that is happening in plain sight. You just have to be willing to look.
The business has become more detached from reality for a long time.
For a show to be a success for the secondary market, it has to be “hot.”
That’s not a business skill.
That’s gambling. Like my system for picking Powerball numbers.
I call it skill but I’m lying…I’m pulling things out of thin air.
Sometimes it feels like they don’t even try.
This is a sustainable business…?
None of this is a business strategy. It’s wishful thinking trying to be framed as “skill.”
The free market era in tickets is over.
The only question is whether or not the industry will learn the lesson that was evident a decade ago…or will everyone try to go back to business as usual.