TL/DR –
California has passed a law prohibiting the sale of concert and sports tickets that aren’t owned by the seller, a practice known as selling “ghost tickets”. The law also bans the use of software to manipulate a venue’s purchasing restrictions. The law had led to a disagreement between Live Nation and StubHub, two major ticket sales platforms, with Live Nation supporting the law and critics suggesting that StubHub may be exempt from it.
Summary
A new law in California outlaws the sale of concert and sports tickets that are not yet owned by the seller. This rule, which has sparked a battle between Live Nation and Stubhub, is in response to the problem of ‘ghost tickets’.
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“Ghost tickets” are being targeted by California lawmakers in an effort to curb exorbitantly priced concert experiences. Such tickets are sold by individuals who don’t actually possess them yet, leading to deceptive e-commerce practices.
Gov. Gavin Newsom has signed a bipartisan bill designed to control this market by prohibiting the sale of unowned tickets. It also bans the use of software to manipulate venue purchasing restrictions.
Assemblymember Isaac Bryan, the bill’s author, highlighted an incident where he found high-priced tickets listed online before they officially went on sale. This deceptive practice often leaves small concert venues in California bearing the cost.
The law exempts certain marketplaces from its provisions, a point that Gov. Newsom has urged lawmakers to revisit. Stubhub has been cited by critics as an example of a platform that appears to be exempt.
Despite initial support from Live Nation, the company that owns Ticketmaster, the bill faced strong opposition. Critics alleged that the law would help Live Nation eliminate its competition. Stubhub, in contrast, spent $4.4 million lobbying against the measure.
However, Stubhub ended up supporting the final version of the bill, which is less beneficial to Live Nation. The National Independent Venue Association (NIVA), while initially in favor of the bill, opposed the final version. NIVA expressed concern that independent venues and promoters would be penalized for selling presale, VIP or waitlisted tickets.
The association believes that the law protects ticket resellers such as Stubhub by not classifying them as speculative ticket sellers, even though they host such transactions on their platforms.
Another related bill proposing a 10% cap on ticket resales was considered but stalled in the Senate Appropriations Committee.
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