Legislation to Limit Markups by Ticket Brokers Defeated in Senate

Legislation supported by national rock concert promoter Bill Graham and musical artists to crack down harder on independent brokers who astronomically inflate ticket prices was dashed in the state Senate on Thursday.

The high-stakes bill would cut deeply into the profits of ticket brokers and agents by limiting their charges on resale tickets to the face value plus a regulated service fee.

The bill was defeated by a 15-12 vote after an unusual debate in which an outspoken conservative Republican, Sen. Frank Hill of Whittier, and a firebrand liberal Democrat, Senate President Pro Tem David A. Roberti of Los Angeles, teamed up to denounce the proposal as an affront to free market capitalism and an individual’s right to make a profit.

But Sen. Bill Lockyer (D-Hayward), who carried the bill for Graham and a variety of entertainment and athletic entrepreneurs, kept the proposal technically alive by getting permission to try again.

Basically, the legislation pitted segments of management of the sports and entertainment industry against independent ticket brokers, who purchase blocks of often choice seats and resell them to consumers at inflated prices for major events.

Adversaries on both sides of the issue had hired some of the priciest and most influential lobbyists in Sacramento to help fight the battle. Roberti indicated that he considered both sides less than savory, telling the Senate at one point, “I don’t think I necessarily would want to have dinner on a weekly basis with any of them.”

Current law, which is considered largely unenforceable, makes it a crime punishable by up to six months in jail and a $1,000 fine to resell a ticket in excess of its face value at the site of the event. However, Lockyer pointed out, computerized brokers, whom he called scalpers, can legally set up shop across the street and sell tickets at higher prices.

“They are leeches, parasites,” Lockyer charged. “They don’t offer any significant social services except to inflate the price dramatically. . . . Ordinary consumers, concert-goers, sporting event enthusiasts are squeezed out of these events.”

The bill would subject violators to a six-month jail term and fine for sales involving up to 20 tickets and a one-year jail sentence and a $5,000 fine for each violation involving more than 20 tickets.

But Hill charged that in an era when Soviet President Mikhail S. Gorbachev, former Eastern Bloc nations and the “rest of the world race toward free enterprise,” the California legislation could create a monopoly dominated by such major operators as Ticketmaster, Ticketron and BASS.

Defending the independents, Hill noted that Ticketmaster is purchasing Ticketron, which, he said, has a “contractual arrangement” with BASS. If independent brokers disappear, he warned, “the only place you’ll be able to buy a ticket, if you don’t want to stand in line at an arena, is through this big, huge monopoly.”

“These are leeches,” Lockyer told Hill. “What do you want to stand up for them for? Stand up for the real entrepreneurs--the promoters, the arenas, the artists, the record companies.”

While Roberti accused both the bill’s proponents and opponents of wearing different-colored “suede shoes,” he sided with the brokers. “Why shouldn’t you have the right to resell the ticket at a profit?” he asked.

“The rock concert promoters knew exactly what they were doing when they put this bill in. It freezes out any competition to them,” Roberti charged, aiming his remarks at Lockyer, usually a philosophical ally of Roberti.

Roberti charged that the bill would enable an entertainment or sports event promoter, in effect, to manipulate the price of the ticket, but that an ordinary citizen who purchased a ticket months in advance would be prohibited from reselling it a higher price.

Lockyer denied that the bill would give promoters any preferential treatment. “This bill applies evenly to the promoters of the event as much as the resale artists,” he said.