‘Junk Fee Prevention Act’ Could Help us All Afford Tickets to the Show

By Steve Wishnia

If the minimum wage had gone up as much as event-ticket fees in the past 50 years, it would now be almost $70 an hour.

In 1973, when I was a teenager, the minimum wage was $2 an hour, and tickets were $6.50 to see Frank Zappa at the old Nassau Coliseum or Mott the Hoople and the New York Dolls at the theater in Madison Square Garden. There was also a 50-cent fee if you bought them from Ticketron, the pioneering electronic ticket-selling company that was acquired by Ticketmaster in 1991.

Fifty years later, I’m paying $93.50 each for two tickets to see Bob Dylan in Newark. That’s exorbitant, but acceptable for a legendary artist in a theater-size venue instead of an arena. But the Ticketmaster fee was $17.30 each.

However, I got off easily compared with the concertgoers who commented while the Federal Trade Commission was considering rules to ban “junk fees.” They got hit with service charges, processing fees, fees for purchasing tickets online (even if that was the only way to buy them), and unexplained “convenience fees.” Those fees can add up to more than half the ticket’s face value.

This problem isn’t confined to music. The last time I went to a Mets game, last year, the $17 fee brought the cost of an upper-deck seat to $70. Airlines and hotels assess similar surcharges.

These charges seem to come from two places. First, the mentality that if you can afford a relative luxury like a plane ticket, you can also afford to pay $30 to check a bag, $22 or $32 more to pick a more desirable seat or ensure that you can sit next to whoever you’re traveling with, not to mention the airport food deserts where you pay $20 for a stale cheese sandwich, a cup of coffee, and a bottle of water.

The other is monopoly. Ticketmaster has been estimated to control 70% of the market for all live-event ticket sales and 80% for live music. Its business partner, Live Nation, “controls an estimated 60% of the concert promotion market and is estimated to have exclusive contracts with about 70% of venues,” according to the American Antitrust Institute.

Ticketmaster explanations

“Ticketmaster doesn’t keep anything from the cost of a standard ticket,” the company says in a statement posted on its website. “Instead, we take a proportion of the added fees to cover the cost of running our business. We use this revenue to provide fans with the very best experience when buying tickets and getting into the show.”

The fees, it says, “simply cover the cost of processing a booking from start to finish,” including retail distribution on its websites and call center; customer service; processing payments; the technology of scanning phone or printed tickets at the venue, and the cost of printing, packing, and distributing tickets.

Consumers who made comments to the FTC were skeptical about those claims. “How much money does it take for a computer to process a ticket order?” asked one. “Ticketmaster is not printing physical tickets, yet charges a significant delivery fee,” said another. A third complained about being charged an order-processing fee, “even though this is an automated software system that requires no additional time or effort for a human to process.”

The company, founded in the mid-1970s, became a virtual monopoly through two practices, Dean Budnick and Josh Baron wrote in their 2011 book Ticket Masters. The Rise of the Concert Industry and How the Public Got Scalped. Unlike Ticketron, which simply charged a service fee on tickets it sold at its outlets, Ticketmaster required full inventory from venues or promoters in exchange for a share in the service fee, which meant the fees had to be doubled. It also encouraged them to close their box offices on the first day tickets went on sale and sell them exclusively through Ticketmaster. The company’s model, one employee told the authors, was, “now you don’t even have to pay the labor on the first day of sale. But if that’s not enough, I’m going to give you a piece of every ticket I sell. So I’ve just turned your cost center into a profit center.”

On Oct. 11, the FTC proposed new rules to prohibit hidden and misleading fees. They would require businesses to display the total price “more prominently than any other pricing information,” and define offering, displaying, or advertising prices “without clearly and conspicuously disclosing the total price” as an unfair and deceptive practice. It would also prohibit businesses from misrepresenting the nature and purpose of fees, including what goods or services they are being charged for and whether they are refundable.

The proposed rules would enable the FTC to seek $50,000 fines for violators, a spokesperson told Work-Bites. Once they are published in the Federal Register, there will be a 60-day period for public comments before a final version is adopted.

In March, Senators Richard Blumenthal (D-Conn.) and Sheldon Whitehouse (D-R.I.) introduced a bill, the Junk Fee Prevention Act, that would also require the full price of a service to be displayed upfront. It is specifically aimed at excessive online ticket fees, airline family seating fees, exorbitant early-termination fees for Internet or cell-phone service, and surprise resort or destination fees, the two senators said in a statement. It would also require airlines to seat children with an accompanying adult at no extra cost and enable the U.S. Department of Transportation to impose penalties for violations.

Although President Joseph Biden called for such legislation in his State of the Union address in February, neither the House nor the Senate have taken any action on the bill.