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TicketsNow Once Again in Hot Water

Site sold Springsteen tickets that didn't exist

By Jon Hood
ConsumerAffairs.com

May 21, 2009

In the February settlement, thousands of consumers who tried to buy tickets to a show at the New Jersey Meadowlands by either Bruce Springsteen or the E Street Band were redirected to TicketsNow.com, where they were charged prices as high as four times the actual face value of the tickets. This in spite of the fact that original tickets were still available on Ticketmaster's own site.

The suit should probably not have come as a surprise; the relationship between the two companies provides ample incentive for such shady practices. Ticketmaster bought TicketsNow in January 2008 for $265 million. The purchase was designed to move Ticketmaster, already an industry giant, into the vaunted “secondary ticket” market. Companies like Ticketmaster are primary ticket sellers, meaning that they sell the “original” ticket.

Secondary ticket companies essentially act as online “scalpers,” where people who bought tickets on Ticketmaster can go and resell them for more than their actual worth. Depending on the event's popularity, ticketholders can make a handsome sum; a recent Garth Brooks event allowed some to turn an eight-fold profit. At the time of the acquisition, TicketsNow was the second largest secondary ticketer, behind only StubHub!, and Ticketmaster was already the number one primary ticketing company.

The settlement in the February case, negotiated by New Jersey Attorney General Anne Milgram, placed a “wall” between Ticketmaster and TicketsNow. Ticketmaster promised not to link to the subsidiary for at least a year for all shows and entertainment events. Ticketmaster agreed to pay New Jersey $350,000, and to set up a random drawing for 1,000 consumers who filed complaints against Ticketmaster with the Division of Consumer Affairs. The winners of the drawing received tickets to one of two concerts scheduled for May 21 and May 23 at the Meadowlands.

Those not selected in the drawing were given a $100 Ticketmaster gift certificate and the chance to purchase two tickets to a future Springsteen show before sales opened to the general public.

In the current scandal, TicketsNow told over 300 consumers who bought tickets for a Springsteen show on May 18 in Washington that the tickets wouldn't be available. The website essentially oversold the show, collecting money for tickets that didn't exist in the first place.

TicketsNow has acted quickly to try to right the problem, no doubt cognizant of the fact that they are being eyed closely by regulators and the public at large. The company offered the wronged consumers a full refund and a TicketsNow gift card equal to what they paid for their ticket. Customers who balk at the offer were also given the choice of better seats to an earlier show, along with $75 for gas and $150 for a hotel room.

This chivalrous offer has done nothing to assuage New Jersey Rep. Bill Pascrell (D) from vowing to introduce legislation mandating the FTC to create a framework of rules for the secondary ticket market. According to Pascrell, “Right now there is no transparency, no checks and balances. No one knows what the hell is going on.” He went one step further by calling the secondary ticket market “legalized scalping.”

Looking at Ticketmasters's website, one would think that the partnership between the two companies is a roaring success – and great news for consumers. The site proclaims that, “The partnership between Ticketmaster and TicketsNow allows fans the greatest choice and access to live entertainment while ensuring reliability of service, convenience, and security.”

The online ticket market has proved problematic several times over the past year.

In March, Pennsylvania Attorney General Tom Corbett announced a settlement with the fan website of child star Miley Cyrus, which offered $30 memberships in a fan club with the incentive of early access to ticket sales. The website, however, failed to inform fan club members that sales went public within fifteen minutes of first being offered to members. The site also offered “pre-sale codes” for early access to tickets, when in fact all tickets were already sold out. Under the settlement, 996 consumers got their membership extended by four months.

Additionally, Ticketmaster faces yet another suit regarding the bait-and-switch implicated in the February case. Phish fan John O'Hurley filed suit in federal court in Massachusetts. The suit says that consumers who log onto Ticketmaster are told that tickets are sold out and immediately rerouted to TicketsNow O'Hurley's confirmation e-mail said he had purchased nine tickets for a total of $2,064; the face value of the tickets, however, was $60.

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