Report: NFL Ticket Policies Subject Of Antitrust Investigation

New York Attorney General Eric Schneiderman just released a report detailing his three-year investigation into the corrupt world of secondary ticket markets. The NFL’s shady re-sale policies are a subject of the report, and according to Bloomberg Business, Schneiderman is now investigating the league for possible anti-trust violations.

According to Bloomberg’s source, Schneiderman is looking into the NFL’s relationship with Ticketmaster, which is billed as the league’s official ticket re-sale partner. The way this partnership plays out is that the NFL urges fans to only use Ticketmaster when re-selling unwanted tickets. The problem with this is that Ticketmaster sets artificial price floors, thus depriving buyers of a fair market. From the AG’s report:

NYAG’s concern with price floors is twofold. First, buyers of tickets on Ticket Exchange or other sites with price floors are frequently not informed that the tickets they are buying are subject to a floor. It is therefore easy for buyers to be fooled into believing what they are paying is the market price for a ticket, when in fact the buyer is paying a price artificially inflated by a price floor. The more aggressively sports leagues and individual teams push ticket buyers and sellers to use their “official” secondary markets, the more serious this problem becomes.

More fundamentally, even when buyers are informed of price floors, the floors deprive the public of a chief benefit of the market-driven approach taken by the 2007 law: lower prices. In particular, price floors may make it impossible to obtain tickets on the team-promoted Ticket Exchange platform for below face value when demand decreases. As described above, when contemplating the legalization of ticket resale, the sponsors of the 2007 legislature repeatedly expressed the hope that legalizing profit resale might lower prices for consumers. A clear source of such savings is lower prices when demand falls. For example, near the end of an unsuccessful baseball season, the tickets to watch a team not destined for the playoffs may go down sharply, allowing fans who otherwise might not be able to afford to see a match to buy tickets for far less money.

This wouldn’t be such a big deal if the NFL wasn’t so aggressive about preventing fans from reselling their tickets on competing services that don’t use price floors. Saying that the league “urges” fans to use Ticketmaster is a charitable way of putting it, considering that season ticket holders can have their tickets revoked if they use a competing service.

According to Bloomberg’s report, the Attorney General’s office may request documents and data from the NFL, and could possibly decide to bring an enforcement action against the league.

[ Bloomberg Business]