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Ticket Touts and the Rugby Union

  • November 12th, 2007

I’m looking forward to an intellectual property presentation this evening. Specialist law firm AJ Parks will lead discussion at the Law and Economics Association of NZ on the Major Events Management Act 2007.

The Bill has been notorious for its prohibition of  “ambush marketing”. In the original form the Bill would have even banned the Westpac Rescue helicopter from going near the venue, because of its logos.

Less attention has been paid to the ban on a secondary market in tickets. Sections 25 and 26 make “ticket scalping” illegal.

There’s resentment the world over at “unscrupulous sellers fleecing fans“.  Thus spake the front page of of a Dubai newspaper I was reading a fortnight ago, about the Dubai Rugby Sevens at the end of this month. Tickets issued at dhs 225 are being auctioned for dhs 450.  Justin Timberlake fans were suffering similarly.

It went on – “It’s not good for the artist to see there’s money unaccounted for, it’s not good for the organisers who have spent a lot of money to see it disappearing into the hands of scavengers, and its not good for the audience – who will be disappointed if more tickets are officially released later“.

I suspect that the opposite is true. Restrictions on the free sale of any property usually cut its value to any owner.  After the All Black debacle in France, Kiwis who could not bear to watch the sad final had the consolation of selling their tickets. That flexibility would underpin initial prices in future World Cups. It is worth paying more if your downside is covered. If resale is forbidden how will the Poms and French and others we want here in 4 years  cover their risk that the final could be between teams that bore them?

If the Act’s resale prohibition sticks, the initial issue price might need to be lower, to compensate buyers for being unable to salvage anything should they be unable to attend.

In reality the resale prohibition is unlikely to work. It will just make the market less transparent but more profitable for the touts. The go-between’s risk will be reflected in the margin between the secondary seller’s and buyer’s prices.

This part of the Bill is an own-goal, unless the Rugby Union have a cunning plan to profit from a monopoly control of resales. To maximise the initial price the Rugby Union should announce early that they will consent to approved resales, and offer a resale facility.

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