UPDATE: 10:25 p.m. EST — New York's attorney general has launched an antitrust investigation against the NFL and its practice of imposing "price floors" on some tickets as part of his probe into the online ticketing market, a source told Reuters Thursday. The investigation led by state Attorney General Eric Schneiderman grew out of a probe by his office into irregularities in the ticketing industry, which found that ticket brokers were using illegal software programs to snap up thousands of tickets and reselling them with huge price markups, Reuters reported.
The source familiar with the NFL antitrust probe, who asked not to be identified, told Reuters it was spurred by complaints about use of the illegal software known as ticket bots.
According to Reuters, a report from Schneiderman's office detailed how the National Football League, and sports teams like baseball's New York Yankees, implement rules barring sales of tickets below a certain price level on official sites. "Price floors may make it impossible to obtain tickets on the team-promoted Ticket Exchange platform for below face value when demand decreases," like during games at the end of a sports season between teams not headed to the playoffs, the report said.
The NFL did not immediately comment on the investigation, Reuters reported.
A wide-ranging investigation into New York state’s concert and sport tickets industry uncovered practices and abuses that prevent New Yorkers from accessing tickets at affordable prices, or even at all, according to a news release from the state attorney general’s office, which began the investigation after a series of customer complaints. The findings stated that for most popular concerts, the tickets are never made available to the general public in the first place. Instead, more than half of all tickets are reserved for a slew of industry insiders including artists or promoters, or are reserved for “presale” events and then made available to select groups, such as those who carry a specific credit card.
The investigation also uncovered that ticket sellers, such as Ticketmaster, tacked on fees, adding more than 21 percent to the face price of tickets. Meanwhile, third-party brokers, like StubHub, resell tickets at average margins of 49 percent above face value.
“Ticketing is a fixed game,” Attorney General Eric Schneiderman said in his news release. “My office will continue to crack down on those who break our laws, prey on ordinary consumers, and deny New Yorkers affordable access to the concerts and sporting events they love. This investigation is just the beginning of our efforts to create a level playing field in the ticket industry.”
The three-year investigation also revealed that hundreds of thousands of tickets have been acquired using illegal specialty software, dubbed ticket bots, that can rapidly purchase as many tickets as possible and resell them at a massive markup.
In addition, Schneiderman announced settlements with two ticket brokers, MSMSS LLC and Extra Base Tickets LLC, after they were found to be illegally operating without ticket reseller licenses.
The report made a number of recommendations, including asking concert promoters to be more transparent about how tickets are released to the public and encouraging secondary ticket markets to police their systems more thoroughly.