KEY POINTS:
Ticket scalpers defend themselves by saying their enterprise corrects a bad case of market failure. Business comes their way only because demand to see a sports event exists after supply has been exhausted. No one, they say, forces a buyer to pay three or four times a ticket's face value. It is a win-win situation. Tamper with this, as the Government is proposing, and you introduce the sort of market-distorting mechanism that bedevils command economies.
There is some merit in this, and the antidote to scalping is apparent enough: organisers simply charge a high price for their event. The temptation is there, given they would benefit most if tickets were auctioned to the highest bidders. But there is much more to running a sport than the matters of market purity. Salary caps are one departure and so, too, is deliberate undercharging for tickets.
Take America's National Football League which, rather than sell Super Bowl tickets at sky-high market prices, allocates them by lottery to maintain "an ongoing relationship with fans". Exactly the same rationale justifies the Government's plan to introduce legislation that will ban ticket scalping for major sporting events in this country.
Sports Minister Trevor Mallard envisages the major benefit will be that New Zealand becomes a more attractive venue for international tournaments. But, in reality, it is more to do with allowing sporting bodies to keep faith with their fans, and ensure ticket prices remain within their orbit. In particular, this applies to the New Zealand rugby union, which, ignoring the law of supply and demand, strives to keep its prices affordable.
During last year's British and Irish Lions tour, however, tickets for the tests fetched two to three times their value on Trade Me, despite threats from the union to confiscate scalped tickets. This was a vivid illustration of the impact of internet auction sites, which have created such a scalping explosion that governments worldwide are scrambling to pass legislation. No longer are touts required to skulk around stadiums or nearby pubs and sell person to person. The internet has encouraged the targeting of major events with ever-increasing sophistication.
For many New Zealand rugby followers, the Lions tour offered not only an unwelcome glimpse of scalping but a lesson in the value attached to major sport. In Britain, there are examples of where this can lead if administrators tune into the market. Glamour football club Manchester United is sometimes sneeringly referred to as a "tourist" team because crowds at its home matches contain a high number of Japanese bankers and Middle Eastern magnates. Tickets, whether acquired legally or through scalpers, have become too pricey for many local fans.
The Government's planned legislation would outlaw the on-selling of tickets for profit. It would also seek to protect event sponsors from individuals or businesses seeking to make money by mass-buying tickets to an event with which they had no formal association. It will not stop scalping on all occasions; issues of supply and demand will prove too compelling. That happened at this year's football World Cup when German countermeasures were rendered redundant by the decision to allot just 8 per cent of tickets to each team's governing association.
But legislation can, if applied seriously, tackle the impact of auction sites, and drive scalpers back to their traditional, less salubrious mode of operation. If so, it will have gone quite some way to helping sporting bodies that want to ensure accessibility and the long-term health of their sport. This is about their right to ensure tickets go to genuine fans. And at the price they want people to pay for them.
