Recent increases in the cost of live event tickets, especially for musical performances, have led to calls for government intervention. Many blame Ticketmaster, which controls most primary ticket sales in the United States, while industry players such as Live Nation point to the secondary market—where tickets are resold by initial buyers—as a source of problems.
Lawmakers at both state and federal levels have responded by proposing direct price caps on secondary ticket sales. In Maine, a law was passed capping resale prices at 10 percent above the original value. A similar proposal was introduced in the District of Columbia but has not been enacted. Live Nation has also recommended to the Federal Trade Commission that there should be “a national 20% cap on resale markups and service fees on concert tickets.”
The debate centers on whether these interventions help or harm consumers. The article states: “Capping prices on ticket resales is a foolhardy market intervention that would certainly harm more consumers than it would benefit.”
Prices serve as signals of value in markets. While practices like scalping can drive up costs, particularly with automated bots purchasing large numbers of tickets, the underlying issue often stems from artists and venues keeping initial ticket prices below what the market would bear. This approach is sometimes intended to maintain accessibility for fans or avoid negative perceptions associated with high prices.
Secondary markets play a role beyond enabling arbitrage; they allow tickets to reach those who value them most. Demand fluctuates over time, and while some resale transactions yield profits, studies show that over half of sampled events had resale prices below face value.
Economists caution that price controls can distort markets. According to the article: “Economistshave warnedconsistently that price controls cause harmful distortions to markets, and the live event ticketing market is no exception.” While caps may deter illegal activities like scalping, they could also reduce participation by legitimate resellers and lead to shortages for those unable to buy during initial sales.
Enforcement challenges persist where price caps exist, often pushing consumers toward unregulated markets with higher risks of fraud. In the United Kingdom, research suggests such caps could result in more unsold seats and fewer people reselling unused tickets.
Live Nation’s support for capping resale prices is noted as potentially self-serving: “It would be ironic for the government to impose price controls that entrench the most dominant live event companies even as the Department of Justice attempts to break up Live Nation due to their alleged monopolization of multiple layers of the industry.”
There are examples of consumer protections aimed at curbing problematic practices without imposing broad price controls. The Better Online Ticket Sales (BOTS) Act was passed in 2016, making automated mass purchases illegal at a federal level. President Donald J. Trump signed an executive order requiring stricter enforcement of this law and greater transparency in pricing.
The article concludes: “In general, however, lawmakers must acknowledge that secondary ticket markets are an essential part of the live events market and let the laws of supply and demand do their work.”
