Deanna Reyes hates ticket scalpers.
"For those of us who just enjoy baseball, we tried to get tickets to the World Series last year and were not able to because scalpers had bought out most of the tickets," she said.
The Phoenix resident and many other fans have begun to rally behind local lawmakers who want to restrict and outlaw the resale of tickets above face value.
But whether it's opening day of the baseball season, N'Sync or Britney Spears, sold out crowds are common, leading to fans such as Reyes to demand more regulation.
And there's the problem.
Supporters of ticket scalpers say placing restrictions against scalpers would only drive the entire market underground. On the other hand, opponents say it's a matter of fairness and equity to the average consumer.
Two ASU professors are champions of ticket scalping. They say that scalping is just another business that benefits, rather than harms, consumers.
Stephen Happel, professor of economics, and Marianne Jennings, professor of legal and ethical issues, both agree that ticket scalping is misunderstood by the public and lawmakers who seek stricter regulation.
Initially, Jennings said she, much like Reyes, was not a fan of ticket scalpers because she felt scalpers took tickets away from the average fan wanting to attend a sporting event or concert.
"That's the emotional reaction and was my initial reaction," Jennings said.
Happel, who has been working to change the perception of ticket scalping for years, said consumers shouldn't be angry that scalpers send in other people, like the homeless, to buy tickets.
"Is it against the law to send in other people?" Happel said. "If it's not against the law, then don't complain. Why not go out and earn money and buy better seats for less rather than jacking around in a line?"
Happel added that students are sometimes paid by other students to stand in line to purchase tickets, and he questioned how that was different from scalpers using the homeless.
Because of the angry reaction that the average person has toward scalpers, Jennings said many states have instituted laws to limit ticket scalping.
States such as Arizona have moderate ticket scalping laws. Scalpers who want to sell above face value cannot be within 200 feet of any entrance of the event, but if the tickets are sold below or at face value, scalpers may locate themselves anywhere.
While Arizona does not have strict laws against ticket scalping, New York has one of the most stringent, instituting laws that do not allow tickets to be resold for more than $5 or 20 percent above face value, whichever is greater.
Recently, two Arizona lawmakers, Rep. Bill Brotherton, D-Phoenix and Rep. Sylvia Laughter, D-Kayenta, proposed a bill that would make it illegal to resell tickets above face value.
Brotherton, the bill's primary sponsor, said he made the proposal after receiving calls from unhappy constituents who couldn't get tickets for events such as the World Series.
"I represent the people in district 20," Brotherton said. "These people are blue-collared workers and they can't afford paying mortgage price for a ticket."
Brotherton added that even with the open market, the average person doesn't have access to a lot of time or money. He said that his constituents wanted to get in at face value and have the ability to get tickets beforehand.
Laughter declined to comment.
The bill has not received widespread support and the Legislature is currently planning to set hearings before setting a voting date.
Mesa resident Valinda Miller said she doesn't like ticket scalpers and supports placing a price cap on the resale of tickets. She said she spent approximately four hours on the phone trying to get tickets unsuccessfully to the April 1 Arizona Diamondbacks versus San Diego Padres game.
"This bill would be fairer to the consumer," Miller said. "They (scalpers) make prices go up for everyone else and then we can't buy those tickets."
But Happel disagrees with Brotherton and Laughter's proposal to regulate ticket scalping and said regulation will prove more harmful than helpful to the consumer.
"These people are lost in time and space," Happel said. "If you believe in wage and price controls and think it will benefit consumers, you're a village idiot."
Jennings re-emphasized Happel's comments and added that placing different types of controls on the market would only result with nasty side effects.
"What they don't realize is that they are actually exacerbating the very problem they are trying to fix," Jennings added.
Currently, the Phoenix area has more than 25 ticket agencies, with the number of scalpers varying depending on the event.
Paula Spears, a Gilbert resident, spent her Monday afternoon on opening day of the baseball season packed into a 60-by-30 foot rectangular lot trying to unload her extra tickets along with 25 other scalpers. She said what lawmakers are doing is actually hurting consumers.
"When you're stuck with tickets that you can't use, shouldn't you be able to resell them for a higher price and try to make up the time and money spent for coming down here?" Spears asked. "It's not right for them to put a price cap on how much we can resell them for; it's not fair to us or the consumer."
Tempe resident David Sharry was another scalper who tried to make a profit on his extra tickets on opening day.
He said if lawmakers such as Brotherton and Laughter got their way and imposed a cap on how much a ticket could be purchased for, it would prove to be counterproductive.
"We're not worrying about it," Sharry said. "It would force all of us underground and we can make more money underground. As far as we're concerned, it would help us, not hurt us."
It's about the Economics
But does Brotherton have a point when he said his constituents can't afford to pay a mortgage price for one ticket?
Not according to the ticket prices listed by some scalpers on eBay, which showed an abundance of tickets sold at only a few dollars above face value.
Just one day before opening day that featured the Diamondbacks versus the Padres, four deep foul line tickets could be purchased for a total of $30, which was approximately $7.50 per seat, with no takers and only a few hours left on the bid.
Regularly priced, those same seats cost $6 apiece.
Both Jennings and Happel said the ticket prices listed by a number of scalpers on eBay is typical of what happens when there are no price controls set on ticket resales.
Jennings said when the market is open and scalpers see what their counterparts are charging, they start to competitively price their tickets, which benefits consumers.
"You get to studying the market and you realize that the reason prices are as they are are for a couple of reasons," Jennings said.
Some of those reasons she mentioned included poor access and poor information to the services scalpers provide and the fact that many people do not understand the economics behind it.
From an economist point of view, Happel said individuals such as Valinda Miller don't consider their opportunity costs associated with buying tickets and only see it in terms of the price printed on a ticket.
"For people who stand in line for three hours saying that they deserve to get the best seats at the best price, my response to that is what could you have earned in those three hours?" Happel said. "Could you have gone out and worked overtime and earned $50?"
Because of Jennings and Happel's testimony to the Phoenix City Council in 1994, a scalpers market was subsequently set up on Third Street and Jackson Avenue in downtown Phoenix the following year.
Happel and Jennings both said the open market essentially created a free market where buying and selling becomes open and competitive.
"For many events, whether it be the Suns or Diamondbacks, you can get in for, or even below, face value," Happel said.
On opening day of the baseball season, Happel's predictions came true.
Contained within a small pen were a number of scalpers with a copious amount of Diamondbacks tickets.
At exactly noon, just one hour before the first pitch was thrown, many scalpers were selling tickets at face value, having a difficult time finding buyers.
With only 30 minutes left before game time, the supply of tickets became greater as demand started to decrease. Scalpers became worried that they would not be able to unload their extra tickets and, as a result, dropped the price of a ticket to just below face value.
But according to Happel and Jennings, if Brotherton's bill were to pass, open sales would cease, thus driving prices up.
"In the history of man, price controls have never worked," Jennings said. "I don't know why they think tickets are any different."
"Get real," Happel added. "Anyone stupid enough to believe in a price control shouldn't be serving in the Legislature."
Joe Rooney, a Mesa resident and a fan who was attempting to resell his tickets at face value on opening day, said he had a mixed reaction to ticket scalping. On one side, he said, there is a question of fairness, but on the other, there is the problem of regulating scalping.
"If people are willing to pay for what they want, then I guess it's OK," Rooney said. "At the same time, there are people that want to go but can't afford the prices scalpers charge."
Third-year ASU law student Mike Liburdi said it is basic economics, and setting price controls on tickets will not help consumers in their quest for the best price.
"These democratic legislatures are deluding themselves if they think they can sit down in a basement and create legislation that is supposed to solve problems, but actually creates more problems," Liburdi said.
Jennings added that fans and team owners shouldn't be angry at ticket prices and that they should be displeased with the concession stand prices instead.
"Those complimentary sales are where teams really make their money," Jennings said. "They (team owners) give all of the perception that 'we price for the family' and 'we're the good guys,' but then you walk into the arena and everywhere you turn you're dinged (by concession prices)."
Diamondbacks President Rich Dozer said he has a mixed reaction to ticket scalping.
"In a way economically, it helps the Diamondbacks, Suns or any other organization that sells tickets because they (scalpers) buy up the tickets," Dozer said. "Many times, however, ticket scalpers will unknowingly have stolen tickets that they sell off to someone, and what happens is we end up replacing those stolen tickets for the same seats, and we get into a situation where there are two sets of tickets for the same seats."
Dozer added that while it is economically good for teams like the Diamondbacks or Suns, fans who really want to attend a sold out game are unable to because most of the tickets have been bought up.
"There are so many good arguments," Dozer said. "Some say it's capitalism and others say maybe those scalpers don't pay sales tax or income tax. It just is one of those really tough problems."
Regulation Issues
According to Jennings, the creation of the scalpers market in downtown Phoenix has helped to reduce the nuisances such as street congestion caused by individuals searching for tickets. In addition, fans are not bothered by scalpers, and the area becomes a centralized area that is easy to patrol.
"The creation of this market has solved a lot of the social issues they (the police) have been trying to address," Jennings said.
Robert Brown, a bicycle officer for the Phoenix Police Department, agrees with Jennings and said the market has eliminated much of the troubles created by scalpers. During game time, patrolling the area becomes much easier.
"It (the scalpers market) keeps them from blocking the sidewalks, standing out in the middle of the road and obstructing traffic," Brown said.
Phoenix police Sgt. Bill Wren, who regularly patrols the area during any major downtown event, said while the scalpers market has proven to benefit the consumer, he still sees consumers being duped by fake tickets. He added that some scalpers have started to move outside of the regulated area.
"It was completely out of control all over and throughout the downtown area prior to the creation of that market," Wren said. "It's a lot easier (now) to see a violation going on, but by having scalpers sell in one area, it adds authenticity (to their activities), and what we have found is that there are some people that attempt to sell counterfeit tickets."
Wren added that Brotherton's bill may introduce a flood of counterfeit tickets and open the door wider to corruption as scalpers start to go underground and people decide to create their own tickets in order to make a quick buck.
Currently, the punishment for selling outside the scalpers market is up to six months in jail and a fine ranging anywhere from $100 to $600, something that Wren said Brotherton should make more stringent rather than trying to destroy what's currently working.
"They (lawmakers) have to make it a higher punishment for ticket vending violations and deal with scalpers who try and corrupt the marketplace," Wren said.
Dozer agrees with Wren and said one of the problems he sees with scalpers is that many of them are starting to return to the pre-scalpers market era where they venture outside of the designated selling space.
"It's become hard for police to monitor that area," Dozer said. "I think it's proven to be beneficial for those that know that area, but there are still fake tickets being scalped, and some are starting to hassle fans as they walk by that area."
Even with the marketplace, Brotherton said he still believes in some form of government regulation that will help control prices, and added that simply because scalpers guess incorrectly on the value of a certain game and have to end up selling those tickets below face value, doesn't change his mind.
"I represent the hard working folks of district 20," Brotherton said. "They can't afford to camp overnight just to get tickets."
But Happel said without government interference, tickets can be bought at or below face value. He added that while its not always the case, a good majority of the time tickets can be procured at much lower than expected prices.
"Scalpers won't come unless they have the opportunity to make a killing on the World Series or Michael Jordan's last game," Happel said. "So what will happen is you won't attract them there, and you won't drive the price below face value."
Jennings and Happel both added that any type of anti-scalping bill will introduce negative consequences such as corruption and black markets.
Despite those negative consequences, Brotherton said other states such as New York haven't had any serious black market issues.
The Great Compromise
While the debate over whether regulation is appropriate or not, Jennings and Happel believe they have come up with a solution that is feasible and designed to benefit consumers.
They said the creation of a nationally organized futures trading market would create endless possibilities.
The proposed market would create one Web site, similar to that of eBay. It would allow people to resell their tickets on the open market, while simultaneously allowing buyers to search for the best prices, seats and overall current market value.
"People need to trade these tickets more than once -- that's the reality," Jennings said. "Situations change, people's lives change - the nature of the performers and the nature of sports is always fluctuating."
Happel said that currently there is already an "informal" type of ticket trading that is ongoing.
"The Internet is already trading tickets," Happel said. "You have all kinds of Web sites and a kind of market place for it, but it isn't nationally organized."
Happel added that the ingenuity of creating one Web site similar to eBay is that prices would be open and competitive and give consumers a chance to find the most suitable price, or even give them a chance to go to games that may be in another town they are currently visiting.
Paul Li, a third-year ASU law student, said the creation of a nationally organized futures market is a good idea.
"If there is demand out there for tickets and people are willing to pay the price, then they should be allowed to," Li said. "The creation of this market will give people who can't make a game or whatever a chance to recoup the price of the ticket by not just finding buyers on the local market, but the national as well."
While Jennings and Happel said there are many solutions to ticket scalping, both agree the solution is not to have government enforce their own style of regulation.
"All it does is increase corruption and ultimately drive it underground," Jennings said.
"One of the most fundamental laws in economics is that there are times when you simply cannot set price by an outside source and expect the market to benefit consumers," Happel added. "Do you trust free markets or not? That's the fundamental leap of faith."
Reach the reporter at tony.ku@asu.edu.
