The View From Here . . .
By Bob Morgan, Jr.

While the current New York State legislature has few admirers, once in a while it does get something right. A case in point is the new law, just signed by Governor Spitzer, repealing much of the anti-scalping law.

For many years, New York had very strict restrictions on ticket brokers. Tickets for larger venues with more than 5000 seats (Yankee Stadium and the Nassau Coliseum come to mind) could not be sold for more than 45% over face value, while smaller venues (think Broadway theatres) could not sell for more than 20% over face value.

Not surprisingly, this law has been flouted in recent years. Out of state ticket brokers supply tickets to all New York events at premium prices. Even more significantly, the internet provides numerous opportunities for sales at market driven prices.

The basic result under the repealed law was that prospective purchasers usually could find the tickets they wanted, but frequently have to go through considerable hoops and extra expense. For example, tickets sold to New York residents on eBay were subject to maximum prices conforming to the New York limits, which in effect limits their availability. These residents had to look around for sites willing to sell to them, often at higher prices.

The new law repeals the limits on resales, so that a season ticket holder, for example, can sell his or her tickets at any price. (Large commercial brokers would continue to need licenses.)

The bill's ending of price controls on tickets makes sense as a philosophical matter. Generally speaking, free markets work better than government-controlled ones, and entertainment tickets are not one of the necessities of life which might warrant an exception to this principle. Moreover, increases in supply often result in lower, rather than higher, prices in the long run.

The legislation had the support of a number of Broadway theatres and some arena owners who were concerned about brokers making large profits from their tickets and who decided to enter the resale market themselves. This is all to the good, but the legislature wisely rejected the effort of baseball teams and others to in effect become the only seller in the resale market. As state Senator Dean Skelos put it, "My feeling is, if I have a ticket, and I can't go to a ballgame, I should certainly have a right to give it to my brother or my cousin -- and if they want to pay me for it, why should I have to go through the Yankees to do it?"

My only criticism of the bill is that it does not go far enough by keeping in place restrictions on ticket sales at an event, within 1500 feet of a large venue and 500 feet of a smaller venue. At the very minimum, sales at face value or less should be permitted near the stadium or theatre to permit casual sellers of extra tickets to hook up with casual buyers. Other vendors perhaps could be licensed and counterfeiters prosecuted severely. A number of other jurisdictions (for example, Cincinnati) have eased up on scalping prohibitions without apparent ill effect.

Nevertheless, despite the ticket scalping repeal bill's limitations, the legislature did get it right. Tickets should be allocated by willing buyers and willing sellers, rather than by government fiat.