Ticket Fees in Maryland Nevermore
Are ticket fees in Maryland nevermore? The high court of appeals in Annapolis, Maryland has ruled on a landmark case. The ruling does not bode well for venues and events charging per-ticket fees. More importantly, the ruling may result in court ordered refunds to be issued to ticket buyers. Fee Free Friday has the very latest information. Plus there is news of consumers having to pay $125 million in ticket fees in Canada and the weekly Wall of Woe has been renamed in honor of this week's theme!
The state of Maryland now equates charging ticket fees with scalping. Is your state next?
Ticket fees in Maryland nevermore
The state of Maryland is home to many great things. The AFC champion Baltimore Ravens football team and writer Edgar Allan Poe to name just two. Maryland is also home to a genuine hatred of event ticket fees. That hatred has just become law with a landmark ruling representing a new chapter in the story of ticket fees in Maryland.
According to John Fritze, the Maryland Court of Appeals now equates ticket fees with scalping. The ruling is in response to an instruction from the U.S. District Court as it deliberates on a class action lawsuit. Fritze explains:
"Service charges are a way of masking the real price for consumers and driving up the cost," said Marty Wolf of Towson-based Gordon & Wolf, which brought the lawsuit. The decision, he said, could affect "almost every venue in the city."
A Baltimore man, Andre Bourgeois, filed the suit in 2011 after paying $12 in Ticketmaster service charges on a $52 ticket to see Jackson Browne perform at the Lyric in 2009. It is one of several lawsuits that have been filed over the fees against Ticketmaster, which merged with events company Live Nation in 2010.
The federal court requested the Maryland Court of Appeals to decide whether a Baltimore City ordinance banning the sale of tickets above face value applied in the case. That ordinance was rushed through the City Council in one day in 1948 after reports that city residents were being charged exorbitant prices by ticket agencies to attend a Navy-Notre Dame football game.
The Maryland court ruled that the ordinance does apply. It's not clear how many tickets could be affected by the decision.
What is of much greater interest for venue owners in Maryland is if they will be required to retroactively issue refunds for the fees they have charged their customers.
Whether the ruling will result in refunds for people who attended games at Camden Yards, performances at the Patricia & Arthur Modell Performing Arts Center at the Lyric or shows at other major venues in the city will depend on how the U.S. District Court for Maryland decides on several unresolved questions...Even if refunds never come, the ruling may force Ticketmaster to use what's known as all-in pricing on tickets sold in Baltimore, meaning additional charges would have to be included in the face value price, which the company sometimes already does.
The implications of Maryland venue owners having to pay out cash refunds to ticket buyers can only be speculated upon. But just the mere mention of the word "refund" is enough to give everyone involved in ticketing industry pause.
There has been no formal response to the ruling from Ticketmaster or LiveNation as of this writing. Rumors are rampant that the Maryland Court of Appeals decision could cause the federal class action suit to be immediately settled behind closed doors as to not establish a legal precedent in other states.
In Edgar Allan Poe's most famous work a supernatural, talking raven torments the narrator with a single word - "nevermore". With this landmark ruling, it is quite possible that ticket fees in Maryland are "nevermore".
$125 Million in ticket fees
In Alberta Canada, the owners of the Oilers NHL hockey team have reached an agreement with the city council to build a new arena. The agreement has put rumors to rest the beloved hockey team would leave the Great White North and move to Seattle Washington in order to get a new arena. The cost to build the new sports arena is an estimated $600 million, with a $125 million chunk being passed onto fans in the form of ticket fees.
The issue of who would pay for the new arena became a heated debate over the past few months with many hockey fans not wanting to pay ticket fees just to keep their team in town. The Bleacher Report details the donnybrook:
Construction will begin this fall and the Oilers should be playing in the 18,559-seat arena by 2016. The total cost of the project will be $601 million.
The city will be paying $219 million, the Oilers will be chipping in $143 million and a tax on tickets will account for another $125 million. The tax won’t exceed seven percent of the cost of a ticket, according to TSN. The two sides are hoping to secure the majority of the remaining $114 million from the provincial government and the rest from the federal government.
The arena deal was years in the making and there were certainly some significant bumps along the way.
Perhaps the most dramatic point in the process was when Oilers owner Daryl Katz, along with team president Patrick Laforge and president of hockey operations Kevin Lowe, paid a visit to Seattle. There has been much speculation that Seattle could be a destination for an NHL team, should one relocate.
The $125 million burden in ticket fees is considered to be the price fans must pay to continue to enjoy professional hockey. Anything less would mean more money being paid in taxes by area residents. Supposedly ticket fees in lieu of taxes is the lesser of two evils. That same choice is being deliberated in another city...
Ticket fees in lieu of taxes
Last week the New England Patriots lost a hard fought battle with the Baltimore Ravens for the AFC championship. The Patriots can take heart in the fact that their franchise is one of the most profitable in the NFL. Like the Edmonton Oilers, the Patriots use a blend of revenue sources to operate the stadium that they play in, known as Gillette Stadium. The Patriots have written agreements with the city of Foxborough and the state of Massachusetts as well as an unspoken one with the fans in the form of ticket fees.
In an interview last week, Randy Scollins describes the stadium's finances and profits:
Patriots playoff games at Gillette Stadium net the town roughly $100,000 apiece, which means the over the past two seasons, the town will have collected roughly $400,000 from New England's playoff success.
"Under a deal negotiated with the Patriots when owner Robert Kraft agreed to build Gillette Stadium, instead of conventional property taxes, the stadium makes payments in lieu of taxes pegged to how many events are held each year and how many people attend...It's a great deal for the town, from my perspective...With payment in lieu of taxes, ticket fees on every event that they have there, the stadium makes out, the stadium ownership, and then the town makes out as well, so the more events they have the better it is for the town."
Whether or not everyone "makes out" is open to interpretation. It's hard to imagine ticket fees being something fans want. It is important to note that the Scollins interview took place before the landmark ticket fee ruling in Baltimore.
The Wall of Poe
Given this week's Edgar Allan Poe theme, the "punny" re-naming of the Wall of Woe was inevitable. Also inevitable is the curated list of hundreds of thousands of tweets, Facebook status updates and blog posts decrying unreasonable per-ticket fees.
That last barbed tweet by 'Pup n Taco' applies to venues in highly competitive markets too. Consumers are going to spend what little disposable income they have at places they perceive are offering the most value. It takes just a few seconds to find out which venues are charging unreasonable fees and which aren't. Ticket sales lost to your "no fee" competitor may not be immediately apparent in your monthly revenue reports - so why wait until it's too late? Gain the competitive advantage in your market now by lowering, if not eliminating, per-ticket fees. You can do that voluntarily or... wait until your state deems ticket fees illegal and requires you to issue refunds retroactively.
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