For the average consumer, ticket service, processing or "convenience" fees may be among the more annoying aspects of going to a big-time sporting event, concert, play or similar attraction. It's one thing to be "nickel and dimed," but service fees may heap as much as 50 percent more on top of the cost of a single ticket.
Does providing a ticket, particularly one that can be transferred instantaneously and electronically in this digital age, really cost $10 or more? Absolutely not. That's why a lot of people were probably happy when the Maryland Court of Appeals ruled earlier this year that Baltimore's 1948 anti-scalping law applied to such fees and restricted them to 50 cents per ticket.
But the problem is that the entertainment business is a bit more complicated than people may realize, and what companies like Ticketmaster may describe as a "convenience" fee is much more than that. For many venues, it's the means by which productions live or die. While the revenue from ticket sales often goes straight to the entertainer, group or traveling company, the add-on fee is split among the promoter, the venue and the ticket agency.
So capping what service fee can be charged by Ticketmaster or any other provider at 50 cents or most any other amount does consumers no favors. At best, it means these same costs would have to be recovered through other charges (such as raising prices for tickets or concessions). At worst, it could mean that promoters will bypass city-based venues entirely.
That's why in March the Baltimore City Council and Mayor Stephanie Rawlings-Blake approved legislation temporarily lifting the restriction on service fees. But that measure runs out this summer, and the council has yet to take up a more permanent fix.
That needs to happen soon. Keeping Baltimore venues in limbo does their business no good. It's safe to assume that at some point, promoters will start looking to alternative locations in the suburbs or elsewhere rather than take a chance of seeing their business plans skewered.
We know some council members aren't convinced that capping service fees will pose a problem, but we suggest they spend an hour or two discussing the entertainment business with people who actually sell tickets. It would be one thing if Ticketmaster and its competitors were pocketing the fees and operating like a monopoly, but that's not what's going on. These contractual arrangements are a great deal more complicated than meets the eye.
Here's a better alternative. Why not require ticket agencies to disclose to consumers up front how much of a fee they are charging? That's more than reasonable, and it essentially reveals to consumers the full price of a ticket. If the combined price is too high, they can decide not to buy.
People who are upset with high service fees do usually have an alternative. They can go visit a venue and buy directly from the box office and avoid the ticket agency entirely.
Although, here's the irony to that. Those who buy directly from the box office aren't doing the venue any favors. If tomorrow, for instance, the lobby of the Modell Performing Arts Center at The Lyric was flooded with ticket buyers, the Lyric would lose a lot of money — not only because the organization would have to hire more ticket sellers but because it would be out its piece of the service fee collected by those ticket agencies.
The worst thing the council could do would be to impose some arbitrary cap on fees in the name of consumer protection. They should notice that very few communities across the United States have attempted to do that — and for good reason. It does consumers no good if all such a law does is chase artists away and cause venues to suffer economically. Millions of dollars in economic activity is at stake, and not just at the box office but in jobs, hotel rooms, restaurant meals and other tourism-related business generated by entertainment.
And what business, exactly, is it of government in a free-market economy to set private-sector prices anyway? If the Lyric wants to charge $20 or $200 a ticket, that's its right — just as consumers have a right to refuse to pay it. Whether the charge is labeled "ticket price" or "service fee" is ultimately irrelevant if it all comes out of the same pocket.Copyright © 2015, CT Now