U.k. Ticket Sales Scrutinized

Leading ticket agencies, venue owners and concert promoters are welcoming the decision by the United Kingdom's Office of Fair Trading to investigate ticket sale practices and pricing—especially if it could lead to a clampdown on illegal ticket sellers.

"There are touts [scalpers] that sell tourists balcony seats and tell them they are the best seats or those who tell tourists to turn up at theaters for tickets that don't exist," says Nick Blackburn, London-based managing director of See Tickets, the largest U.K.-owned ticket agency and the second-largest after Ticketmaster U.K. "That should be a criminal offense that the government should go after."

London-based Peter Tudor, director of sales and marketing at Wembley London (owner of Wembley Arena), agrees. "One good thing that can come out of this is improved legislation against touts."

Peter Latham, COO of Clear Channel Entertainment U.K. Music in London, adds: "We welcome this inquiry, because the complaints are against agents that are at the more unscrupulous end of the business."

On June 17, the OFT launched a fact-finding study into the ticketing business, which accounts for £100 million ($183 million) of the £3 billion ($5.5 billion) live-events sector.

It will examine whether agents use questionable methods that force consumers to pay overtly higher fees for tickets. These booking fees and handling charges can hike prices by as much as 30%, instead of the U.K. standard of 10%-12%, according to complaints filed with the OFT.

The study's results, to be published by year's end, will determine the effectiveness of consumer-protection regulations that cover misleading advertising and the terms of consumer contracts.

Additionally, it will look at exclusive arrangements between promoters and agents, which force consumers to buy tickets from only one source.

Official entertainment organizers and ticket sellers, usually members of industry-regulated STAR (Society of Ticket Agents and Retailers), say they support the study if it means taking a tougher stand against unauthorized ticket peddlers.

They do, however, support legitimate reasons for markups, which they say should come to no more than 12% of the ticket price. When promoters put on an event, they allocate a certain number of tickets to the venue owner, which are sold through the box office, and the remainder is allocated to ticket agents.

To make a profit on their investment, legitimate agents charge buyers booking fees per ticket and a transaction fee for the total purchase. These markup fees cover sales taxes, credit card transactions, technology for online sales, staff, premises and other administrative costs.

"We also offer marketing services for the [events'] producers and promoters. We do want to make a fair return on our investment," Blackburn adds.

The OFT's move comes almost a year after the country's Consumers Assn. published a report titled "Foul Play" in October 2003 that damned the whole industry.

The report concluded that "ticket agencies may not have broken the law . . . but most broke industry codes of conduct, and some are ripping off theater-goers with sky-high charges."

But STAR members say their codes of conduct work when used properly.