Does Ticketmaster own resell sites?

Ticketmaster is the largest primary ticket outlet and ticketing company in the United States. There has been speculation that Ticketmaster owns or partners with ticket resale sites to extract more profit from ticket sales. This article examines the evidence around whether Ticketmaster has ownership stakes in secondary market ticket sites.

Quick Answers

Yes, there is evidence that Ticketmaster owns or partners with some ticket resale sites:

• Ticketmaster acquired the resale site TicketsNow in 2008, although it later divested from the company.
• Ticketmaster launched its own resale site TicketExchange in 2009 which later became Ticketmaster Resale.
• Ticketmaster has official resale partnerships with StubHub, Vivid Seats and TickPick.
• Ticketmaster resale sites and partners frequently receive disproportionate allocations of tickets for high demand events.
• Artists and event organizers have accused Ticketmaster of double dipping – profiting from both initial sales and marked up resales.

Ticketmaster’s Acquisition of TicketsNow

In 2008, Ticketmaster acquired TicketsNow, an online ticket resale marketplace, for $265 million. The acquisition gave Ticketmaster an entry point into the rapidly growing secondary ticket market. Under the deal, Ticketmaster continued to operate TicketsNow as a separate brand and entity.

However, in 2010 Ticketmaster decided to divest from TicketsNow after the acquisition attracted significant controversy. Critics accused Ticketmaster of double dipping – profiting from both the initial ticket sale and then again via marked up resale prices on TicketsNow.

TicketsNow was sold to TicketNetwork in 2013. So while Ticketmaster briefly owned TicketsNow over a decade ago, it no longer has an ownership stake in the resale site.

The Launch of Ticketmaster Resale Sites

In 2009, the same year it divested from TicketsNow, Ticketmaster launched its own ticket resale site TicketExchange. The site enabled fans to resell event tickets they had previously bought from Ticketmaster.

TicketExchange later rebranded to Ticketmaster Resale in 2016. Ticketmaster Resale provides a platform for season ticket holders and other fans to resell event tickets.

Unlike TicketsNow, Ticketmaster continues to own and operate Ticketmaster Resale. It represents the company’s core presence in the secondary ticket market.

Ticketmaster Resale Controversy

The launch of TicketExchange, and later Ticketmaster Resale, renewed accusations that the company was double dipping on fees.

Ticketmaster collects fees on the initial ticket sale, then collects buyer and seller fees again when the ticket is resold on Ticketmaster Resale at higher than face value prices.

Fans argue Ticketmaster is essentially scalping its own tickets. Ticketmaster maintains the fees fund security enhancements and buyer protections exclusive to its resale marketplace.

Ticketmaster’s Resale Partners

In addition to its wholly owned resale site, Ticketmaster also maintains official resale partnerships with major secondary ticket marketplaces like StubHub, Vivid Seats and TickPick.

Ticketmaster provides inventory to these partners by facilitating season ticket holders reselling their seats through these third party marketplaces.

While Ticketmaster doesn’t have an ownership stake in these companies, the partnerships give it an expanded presence and revenue share in the secondary ticket market.

Evidence of Preferential Treatment

There is also evidence that Ticketmaster allocates more tickets to its own resale sites and partners compared to the general public.

For high demand events like concerts, sporting events and Broadway shows, Ticketmaster Resale and partners like StubHub frequently receive 10% or more of available tickets.

These allocations of prime tickets for resale have led to accusations that Ticketmaster artificially restricts supply to drive up secondary market prices and therefore its own resale profits.

A New York Times investigation found that up to half the resale listings for some events on StubHub were being sourced from just a few individual brokers, suggesting backdoor collusion with Ticketmaster.

Bruce Springsteen Controversy

In 2009, fans trying to buy Bruce Springsteen tickets on Ticketmaster found over 80% of tickets were allocated to its TicketsNow resale site just minutes after the on-sale time.

Springsteen was infuriated and demanded Ticketmaster cancel sales of his tickets on TicketsNow. The incident provided evidence of Ticketmaster controlling inventory supply to favor its own resale sites.

Company Responses

Ticketmaster maintains that there are completely logical and above board explanations for why its resale sites receive so many prime tickets:

• As tickets are often sold through pre-sales before the general on-sale, this necessarily allocates stock to Ticketmaster as both the box office and resaleTICKETMARKET.
• They have direct partnerships with season ticket holders, venues and sports franchises to resell tickets.
• There is open market competition for tickets – if Ticketmaster Resale didn’t source them, another resale site would.

Ticketmaster argues the price differences between initial sales and resale are simply a function of supply and demand in a competitive secondary market.

However, critics counter that Ticketmaster has both the incentives and means to manipulate supply and skew the market through preferential allocations to its own platforms.

Lawsuits

Ticketmaster has faced a number of lawsuits around its resale practices including:

• In 2003, Ticketmaster paid $15 million to settle a lawsuit alleging it monopolized ticket distribution and resold tickets on the secondary market.
• In 2007, Ticketmaster settled a class action lawsuit for $18.5 million over excessive order processing fees.
• In 2019, a lawsuit alleged Ticketmaster conspired with scalpers to charge inflated resale prices on TradeDesk.

While Ticketmaster has paid millions in legal settlements over the years, none of the lawsuits definitively proved allegations of anti-competitive collusion with secondary ticket markets.

Government Regulations

There have been some government efforts to regulate Ticketmaster’s resale practices and other secondary ticket markets:

• The BOTS Act outlawed the use of ticket buying bots to unfairly scoop up event tickets.
• Some states have passed anti-scalping laws capping the markup on resold tickets.
• New York requires the licensing of ticket resellers.
• The FTC and ticket resale sites have taken steps to reduce speculative ticket listings and fake ticket scams.

However, Ticketmaster itself has largely escaped legislative efforts to rein in perceived abuses of its market power.

The company maintains that calls for regulation are unnecessary and would mainly hurt consumers by reducing choice, competition and liquidity in ticket resales.

Conclusion

There is considerable evidence that Ticketmaster maintains close ties and preferential inventory allocation with ticket resale marketplaces, especially its wholly owned Ticketmaster Resale:

• Ticketmaster briefly owned TicketsNow before divesting it.
• It launched TicketExchange which became Ticketmaster Resale.
• It partners with major secondary sites like StubHub.
• Its resale operations receive large allocations of prime tickets.

This integration and apparent favoritism have led to ongoing accusations that Ticketmaster is double dipping on fees and even scalping its own tickets.

While Ticketmaster defends its resale practices as transparent and pro-consumer, critics contend the company is unethically profiting from its dominant market position in primary ticket sales.

Despite controversies and lawsuits, Ticketmaster remains highly influential over both the primary and secondary live event ticketing market. Regulatory oversight of the company’s resale practices continues to be relatively limited.