Here's why you can't get good concert tickets

ALBANY -- There's a reason why it's hard to get reasonably priced tickets to major events: The system is rigged, the state's attorney general charged Thursday.

Tickets to concerts and sports events have been kept out of the hands of the general public, leading to inflated prices when the public could access them, an investigation by Attorney General Eric Schneiderman found.

Schneiderman detailed a three-year investigation that alleged widespread abuse in the ticket industry, claiming that the practices prevented New York consumers from buying tickets at affordable prices. In some cases, customers couldn't even get the same tickets afforded to insiders, he said.

For example, about 70 percent of tickets for two Jay-Z and Justin Timberlake shows at Yankee Stadium in 2013 were only available through pre-sale events, the report said.

“Ticketing is a fixed game," Schneiderman said in a statement. “My office will continue to crack down on those who break our laws, prey on ordinary consumers and deny New Yorkers affordable access to the concerts and sporting events they love."

The investigation led to the settlement with two New York City-based ticket brokers -- MSMSS, LLC and Extra Base Tickets, LLC -- who were illegally operating without a ticket reseller license in New York, Schneiderman said. MSMSS will pay $80,000 in penalties, and Extra Base Tickets will pay $65,000.

Vow to cooperate

Consumer groups praised the findings, while ticket brokers vowed to work with Schneiderman to avoid any abuses.

"StubHub believes that a fair, secure and open ticket marketplace supports fans," the San Francisco-based, online ticket giant said in a statement. "Consumers should be protected from unfair and deceptive practices that make it harder for fans to buy and use event tickets in an open market. We are strongly committed to partnering with industry, public policy and other leaders to achieve this goal."

Launched after complaints from the public, Schneiderman's probe found that there were a host of middle men tied to the ticket industry that limits the availability of affordable tickets to consumers.

In some cases, tickets were either put on “hold” and reserved for "a variety of industry insiders including the venues, artists or promoters," Schneiderman said. There's also the business of reserved tickets for “pre-sale” events for people with specific credit cards or access.

Fees and brokers

The review found that on average, more than half of all tickets -- 54 percent – were reserved for so-called insiders.

"The report’s finding—that the modern ticket marketplace is rife with abuses that prevent consumers from accessing tickets to popular events at a fair price—has long been known to anyone that tries to buy a live event ticket," The National Consumers League, a Washington D.C.-based consumer group, said in a statement.

The situation is compounded by fees added to ticket sales by companies such as Ticketmaster that can add more than 20 percent to the face price of the tickets, Schneiderman said.

In the case of third-party brokers like StubHub and TicketsNow, tickets can go for 49 percent above face-value -- sometimes more than 1,000 percent, the report said.

“Ticketmaster fully cooperated with the attorney general’s office in developing the report and looks forward to continuing to work with the attorney general to ensure that artists can get tickets into the hands of their fans," the West Hollywood, Calif., company said in a statement.

'Ticket bots'

Part of the problem, Schneiderman contended, is that some brokers use illegal software – called “ticket bots” -- to purchase top tickets to shows and sporting events, leaving customers to pay exorbitant prices in the secondary market.

For example, a broker buying tickets to a U2 show at Madison Square Garden last June purchased 1,012 tickets in the first minute of the sale through a "ticket bot."

The issue has come up for major concerts in New York in recent years. For example, tickets to a Rolling Stones concert in Buffalo last year started going on sale at twice the base price -- even before they were the public was able to have a chance to buy tickets through a public sale.

Last month, Schneiderman's office sent letters to three online ticketing sites selling tickets to Bruce Springsteen concerts in New York, including a Feb. 27 show at the Blue Cross Arena in Rochester and shows at Madison Square Garden, before those shows went on sale.

Schneiderman's letter to StubHub, TicketNetwork and Vivid Seats said the sites are prohibited from listing "speculative tickets" before they go on sale.