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Ticket Brokering: ODU Prof Explores Supply Side of Scalping Industry in Seminal Study

An Old Dominion University faculty member is the co-author of the first national study of the secondary ticket market (or scalping) in sport that has been done from the perspective of people supplying the tickets, to attempt to better understand the business of ticket brokering and address perceptions of the industry.

Stephen Shapiro, assistant professor of sport management in the department of human movement sciences in ODU's Darden College of Education, has studied the secondary ticket market for a number of years with Joris Drayer, a colleague from his doctoral program at the University of Northern Colorado who is now at the University of Memphis.

"We're not making a value judgment about the industry, saying it's good or bad," said Shapiro, noting that scalping has existed in various forms for decades. "What we want to do is understand the industry better."

The findings of their paper "Understanding Ticket Brokers" will be presented Thursday, July 15, at Ticket Summit 2010, the ticket broker industry conference in Las Vegas. The gathering will feature giants like StubHub, as well as small ticket resellers, venue managers, event promoters and legal experts from the entertainment industry.

Shapiro said the secondary ticket market is an interesting field of study because public perception of the industry is often very negative.

When people think of scalpers, they imagine men hanging out on street corners outside of stadiums with a handful of tickets, brokering deals to sell tickets for a profit for fans that walk by.

"Ticket brokers have dealt with negative portrayals from consumer and the media, creating a perception that brokers drive the price up for high-demand events so that some fans can't afford tickets," Shapiro said.

In fact, the industry is a global one now, Shapiro said. And in many ways, state laws regulating the reselling of tickets for sporting events and concerts haven't kept up with the evolution of the industry into a giant, online marketplace. The ticket broker industry has been legitimized and self-regulated, lessening the need for government intervention, Shapiro said.

"I think there are two sides to the industry. We did the research and tried to look at it from a neutral perspective," he said.

"It's a free market, and you certainly don't want to limit competition. The teams also want people in the seats, to take advantage of ancillary revenue - concessions, parking - or just have a better atmosphere in the stadium.

"From the other side, are the real fans able to get tickets to games to get into events without having to pay an outrageous amount? That can be a negative perception, where there's price gouging."

The researchers surveyed ticket brokers, gathering information about the companies and how they conduct their business. Shapiro said it was a lengthy process because such a survey had never been done, and some ticket brokers were wary because they were being asked about their business practices.

"I think that might just be because of the sensitive nature of what we asked about, such as how they get their tickets, or what they use to price their tickets. And there's a lot of competition."

Among the key findings is that the reputation ticket brokers have of obtaining tickets through underhanded and unethical means is largely not valid. "Overwhelmingly … the results of this study suggest that the majority of brokers acquire tickets the same was as all other ticket buyers."

The authors also found out that ticket resale laws have little impact on how brokers conduct their business.

Shapiro has not studied the secondary ticket market locally, but said it would be interesting to know how the industry has evolved in Hampton Roads in the past few years.

"There's incredible demand for ODU football, because of the number of season tickets and the relatively small size of (Foreman Field at S.B. Ballard Stadium)," he said. "I'm sure there is some ticket brokering that occurs. It would be interesting to see what effect that has."

This article was posted on: July 14, 2010

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