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Primary Lobbyists Give Confusing Testimony to Nevada Legislature

IndustryLegalTop Story

May 16, 2019
Dave Clark

In public testimony given before the Nevada Assembly Committee on Judiciary on May 6, primary industry lobbyists gave testimony regarding Senate Bill 131, which features a number of provisions designed to strip consumers of rights related to the resale of tickets. While there is a great deal of content to unpack regarding the testimony given, one exchange in particular is worth examining – it came about 45 minutes into the reading, which is viewable on the Nevada Legislature’s website.

Assemblywoman Jill Tolles, a Republican serving District 25 in the state assembly, asked the proponents of the bill whether or not their claims that secondary ticket sales constitute lost revenue on the part of primary rights-holders – given that resold tickets have already been paid for by the consumers listing them for sale. “You are paid by resellers for the initial cost,” she said. “Is [resale] really a loss of revenue?”

Up first to respond was Mike Newquist, a Vice President of Marketing for Endeavor, a conglomerate which owns UFC as well as Learfield/IMG and the Professional Bull Riders organization.

“In that case, we receive the initial face value of the tickets,” he began. “In today’s world of ticketing, tickets are dynamically priced, up and down, real-time, every event. So, if we know that there’s buyers that are spending $3,000. That $3,000 is being taken away from us. So as we’re pricing our seats, in very real time, the economics would tell us that’s where the price should be, so we are definitely losing out on that delta.”

Note that this is in reference to tickets that the organization had put on sale at one price, and voluntarily sold to a buyer at that price. The implication seems to be that a market existing for those tickets in excess of their original price is perfectly fine – they price tickets dynamically, as he points out. The issue, rather, is that the organization believes itself to be the only entity that has the right to use the free market, rather than consumers.

A case of seller’s remorse, if that is a real thing.

Following that naked admission of the reasoning behind the bill being discussed, Myron Martin jumped onto the microphone. Martin, the President and CEO of The Smith Center for the Performing Arts, tried to shift the conversation to claims that Cirque du Soleil had made two years ago when the prior update to Nevada ticket resale laws was being debated.

“[Cirque du Soleil] testified that they had a loss of millions of dollars in ticket revenue whereby they actually had some empty seats,” he said. “People showed up with fraudulent tickets but they still found them a place to sit, and they didn’t charge them a penny for it. They didn’t get any revenue, because these are tickets that were sold, and then they had to put people in empty seats for free. And that represented millions of dollars two years ago. This is real.”

This story begs a number of questions – a few off the top of the head:

Were the seats empty because the tickets were in fact sold through the primary marketplace, but there was some kind of system error that caused the tickets to be invalid when consumers arrived?

Did Cirque seat these customers in the empty seats rather than sell the seats to customers waiting in line for the performances?

If so, why did they not (as is standard operating procedure with any denied entry claim we’ve ever heard of) ask the consumers to pay face value for the open seats, instructing them to charge their original purchases back through their credit card systems to recoup the original purchase price (just ask Ed Sheeran’s management about its Viagogo invalidation process at his tour last year).

TicketNews sources in the Nevada ticketing world openly questioned whether or not this was in fact a case of credit card fraud perpetrated against the Cirque organization that they are choosing to paint as resale malfeasance to further their legislative agenda. Regrettably, Cirque did not respond to requests for details regarding these claims sent by TicketNews.

Regardless, there are a number of questions raised by this and other points of contention raised by the proponents of these new consumer restrictions proposed by SB 131. We’ll be examining other aspects that raised questions as we digest the testimony throughout the coming days.

Photo: Smith Center for the Performing Arts via Wikimedia Commons

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