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Taking on Ticketmaster

City Council weighs limits on fees

Baltimore is moving to cap “convenience fees” charged by Ticketmaster and other vendors, but the new rules are a complicated compromise that fail to please consumer rights advocates.

The new rules, introduced in the City Council on June 3, would cap most fees at 15 percent of the price of the ticket, tapering that to 10 percent on amounts over $50 and 5 percent for the last bit of tickets that cost more than $150. The fees will have to be disclosed on the ticket itself and on all advertisements for the event.

The background: Late last year, a Baltimore man named Andre Bourgeois won a lawsuit against Ticketmaster. He argued that the more than $12 in convenience (and other) fees he paid over and above the $52 face price of the ticket he bought to see Jackson Browne at the Lyric Opera House amounted to scalping, as defined in a 1948 city ordinance that prohibited anyone from selling any ticket for a price above 50 cents more than the price printed on the front of the ticket.

The old law was not a moot point. In the 1990s a guy was thrown in jail, his car towed, for trying to sell an Orioles ticket for the price he had paid Ticketmaster. That was $6 more than the face price, so he got locked up and fined.

But the irony of that old case—well-reported by local and national media—was not the only interesting detail in the court documents of the new case. On page six of the judge’s decision comes discussion of the “Facility Agreement,” under which a $3 fee is collected by Ticketmaster. Turns out $2.50 of that was kicked back to the Lyric, and that’s a tax dodge.

The city charges a 10 percent “Admissions and Amusement Tax” on all the fun, for-profit shows held here. That tax revenue was one of the main benefits cited, for example, in the argument to bring the Grand Prix to Baltimore.

But the city only gets 10 percent of the face price and service fees of the ticket. So if the price you pay is 40 percent or 50 percent or 100 percent more than that face price, the argument could be made that the city ought to get its cut of that too.

That’s the argument Marceline White, executive director of the Maryland Consumer Rights Coalition, makes. She says Ticketmaster is skipping out on $500,000 a year in taxes it should pay the city. But she hasn’t done a serious analysis. “We simply did a basic, back-of-the-envelope figure,” she says, “based on the Jackson Browne” numbers in the lawsuit.

That is, based on $2.50 a head in all Ticketmaster-related events in Baltimore in a typical year. That would appear to assume 2 million tickets sold each year at the Hippodrome, 1st Mariner Arena, and the Lyric.

White has advocated a single price on each ticket. There is precedent.

“When the Arkansas Supreme Court ruled that Ticketmaster could not collect service charges on tickets to music events in the state, Ticketmaster went to ‘all-in-one’ pricing, which is exactly what we are asking them to do here,” she told a council committee hearing several months ago.

“Politically I don’t think we could pass that,” says Carl Stokes, chairman of the committee that drafted the new bill.

The bill as drafted, with the cap on fees, is meant to shift some of Ticketmaster’s outrageous fee (a 40 percent premium on the face price is pretty common) to the ticket cost itself, thus netting the city a bit more tax revenue. The law “also says they can no longer kick back money to the venue,” Stokes says.

The bill should not affect too many of the city’s cultural institutions, Stokes says. The Lyric and the Hippodrome have Ticketmaster arrangements, but the Meyerhoff charges only $4 over face price on its tickets—”that’s under the cap,” Stokes says. “The zoo charges a $3 processing fee per transaction. The BMA, the Walters, the Eubie Blake are all free.”

So now the players are Ticketmaster and its rivals (which are few) versus consumer rights people, which are fewer. White says the bill was taken from Stokes’ committee to facilitate work by the ticket vendors. Stokes doesn’t confirm that.

“The bill became a regulatory bill instead of just a bill about fees,” he says of its move from his Taxation, Finance and Economic Development Committee to James Kraft’s Judiciary and Legislative Investigations Committee, where a hearing has not yet been announced. “I was surprised that it left the committee,” Stokes says.

Stokes says he has “no idea” if the politically unfeasible all-in-one pricing scheme favored by White’s group would foster more competition and lower ticket prices in Baltimore, but he has some idea about what will happen in committee if things continue the way they have been.

“It’s a business model,” he says. “The model is gamed to get the highest profit in the promoter’s pocket. And by the way, the consumer people better get down there and lobby. Doing a press release isn’t enough. . . if not, there will be no caps at the end of the day.”

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