Business 3 October 2013 The problem with touts: how ticket resellers got a foothold in football Football clubs such as Spurs are replacing their ticket exchange schemes with commercial resellers. Are their fans getting a good deal? Print HTML There are few areas where weasel-worded apologism for the excesses and failures of the unfettered free market is quite as pronounced as the secondary ticketing market – or touting, as we used to call it before the internet gave it a veneer of respectability. It’s a market estimated by the police to be worth more than £1bn a year in the UK. Companies such as StubHub, Seatwave and Viagogo are well-established in the music business, where the "service" they offer enables fans to buy a £136.50 face value pair of tickets to see Justin Bieber for £1,147.04. Plus £144.50 booking fee. Now these firms are making a concerted effort to establish themselves in the football market. The resale of football tickets is illegal under section 166 of the Criminal Justice and Public Order Act 1994. Unless the resale is authorised by the organiser of the match. That’s why the likes of StubHub and Viagogo are striking deals with leading football clubs. So if you sell a spare ticket to a mate for face value, you are breaking the law. But if StubHub or Viagogo sell your spare ticket for a massive mark-up, that’s perfectly legitimate. One of the clubs StubHub is currently "official partners" with is Tottenham Hotspur, whose 36,000 capacity ground sells out for pretty much every game. The deal is a surprising one given the fact that the club used to run a campaign called Out the Tout, which it said was intended to stop tickets being sold at above face value to fans. But it appears that what Spurs really objected to was not resale above face value, but not making any money out of it. StubHub offered Spurs a large sum of money – the precise figure is commercially confidential as potentially embarrassing details so often are – to step in and replace the ticket exchange scheme the club used to run. The large sum came on the condition that there would be none of the restrictions – such as price caps on resale – that exist at some other clubs StubHub deals with. Spurs like to present the deal as a service to fans, but its decision to take the money without seeking to protect fans from the excesses of the unfettered market shows that greed, rather than customer service, was the prime motivation. And here’s where the weasel words come into play. Spurs promoted the deal to its fans by pointing out that one of the benefits of the scheme was that "you can set your own price" when reselling tickets. That is active encouragement to price up. Yet the club also says "it is very rare indeed for tickets to sell at more than their original price". Leaving aside the question of which parallel universe the club is referring to, the observation could be made that the situation would be rarer still if the club wasn’t actively encouraging it. But there’s more. Even though the club insists that the situation is very rare, it says: "While we understand that some fans might be frustrated to find prices higher than they hoped, it is the Season Ticket Member’s prerogative to list their seats at whatever price they choose." StubHub itself says it "does not own, price or sell any tickets". You see, all Spurs and StubHub are doing is providing an opportunity – it’s the greedy customers who are to blame for the high prices. It is, as I said in an article for the Football Supporters Federation blog, the National Rifle Association defence – "we just supply the guns, if people choose to shoot each other with them, it’s nothing to do with us". But even this weasel-worded justification does not stand up to serious analysis. If your business model is based on a commission structure, as StubHub and the other agencies’ is, it is in your interest for prices to be high, because the percentage you take is greater. Yet these agencies are quick to distance themselves from any responsibility for high prices. Why, one wonders, are they so coy? Spurs and StubHub have said repeatedly that just because tickets are listed at high prices, it doesn’t mean they are selling at high prices. Yet it seems strange that people would keep listing tickets at prices they can’t get. Of course, StubHub must have the hard information. But it won’t share. Good old commercial confidentiality again. Some may say this is just supply and demand at work, the free market in all its glory. But, as is so often the case, the "free" market is given a little help by those who can benefit the most. As has been seen with the sale of music tickets, the market can be gamed. If you can buy a sufficient volume of tickets, you control supply, and so you can push the price up. This is why fans often log on to buy concert tickets, find the gig is sold out within minutes, but then see tickets appearing at well-above face value soon after. The agencies acknowledge that what they like to call "professional resellers" – and most people like to call touts – use the “service” they provide. It’s perfectly legitimate. That explains why on StubHub’s customer support page, for instance, it helpfully points out that you can resell tickets you buy from it. That explains why one Spurs fan who sold his ticket on StubHub at face value found it listed for sale a few days later at six times the price. As Spurs fansite Total Tottenham pointed out: "Tottenham Hotspur were quick to point the finger at season ticket holders, their most loyal and important customers, as the cause of the inflated ticket prices being asked on StubHub", yet "It is very likely that a large share of the tickets that are being sold in excess of sometimes £500 are actually the listings of professional ticket touts." The Mirror’s Penman and Sommerlad column reported last year that StubHub’s senior management hosted a meeting at its London offices with some of the UK’s leading ticket touts. StubHub says it merely invited them to "get feedback". I bet it did. Spurs have generated terrible PR with this deal, although no doubt they, along with other clubs, will be watching what fans are prepared to pay for tickets carefully. Season tickets have only risen 100 per cent + over the last 10 years, so every penny counts. A group of fan sites working with the Tottenham Hotspur Supporters Trust have launched a petition against the deal, calling for proper consultation on deals such as this in future. (For transparency, I should point out I am one of the initial signatories). They are backed by the Football Supporters Federation, whose chair Malcolm Clarke called secondary ticket agencies "legalised ticket touts" amid complaints by fans of Manchester City over their club’s deal with Viagogo. Viagogo was the target of campaigning by fans of German Bundesliga side Schalke 04 last year – 10,000 of them turned up to the club’s AGM, which was dominated by discussion of the deal. In a vote, 80 per cent of club members opted to scrap the deal. In England, clubs are not quite as receptive to fans’ wishes. Nor are fans yet as organised as those in Germany. In 2011, MP Sharon Hodgson put forward a Private Member’s Bill to restrict ticket resale prices to 10 per cent above face value. It was talked out by Tory MPs. › From Niki Lauda to Damian McBride, when does the cost of winning become too high? Spurs. Photograph: Getty Images Martin Cloake is a writer and editor based in London. You can follow him on Twitter at @MartinCloake. Subscribe More Related articles In both business and sport, specialisation can increase efficiency – and blind spots The players make their mistakes on the pitch – I make mine on the page Why is the government giving £45m to Roman Abramovich while letting a British steelworks go to the wall?