Consumer rip-off as ticket touts rake in huge profits

21 May 10

G4S Events’ 2010 Ticket Tout Index reveals that event tickets purchased via online auction sites cost on average 59% more than the designated face value. Brian Sims reports.

By Brian Sims

Ticket touts are now earning more than the average UK salary by selling tickets online. In addition, tickets for this summer’s biggest music events are selling for a 32% premium.

Touts selling tickets through online auction sites are typically earning a 59% profit on every ticket sold. They’re continuing to rip off consumers by charging hugely inflated prices for tickets to events such as rock concerts and rugby matches.

Indeed, G4S Events’ just-published 2010 Ticket Tout Index shows that touts are snapping up hundreds of tickets for events they have no intention of ever attending and, as a consequence, driving up prices for real fans.

Online touts were identified selling hundreds of tickets for a single event and are estimated to be generating huge profits selling thousands of tickets each year. G4S estimates that a committed tout can earn in excess of £28,000 each year, which is £2,200 more than the average UK salary.

Not just online

It’s not only online that touts are exploiting consumers, either. G4S sent researchers to a key fixture for a recent international rugby tournament and found touts swarming outside the stadium. Tickets were selling for up to 142% over their face value at £85, when they originally cost just £35.

Touts took advantage of desperate fans, promoting seats as being by the stadium’s pitch side tunnel when they were actually located in the final row of the upper tier.

At a recent London gig by a North American rap music star, researchers found organised gangs of touts in the tunnel leading to the arena selling tickets at inflated prices of up to 50% over the face value despite the gig not being a sell out.

Festival fever has already gripped the UK, with touts making an average of a third (32%) profit on tickets for this summer’s biggest live music events. Hundreds of tickets for the Reading Festival featuring Guns and Roses, The Libertines and Blink 182 are being touted online, and are regularly selling for 38% over their face value.

However, beyond the festival circuit tickets for gigs and concerts are not securing as big a premium as in previous years, trading on average for 22% over the face value in 2010 compared to 53% in 2009.

Huge profit at the expense of genuine fans

Commenting on the survey results, Mark Hamilton – the managing director of G4S Events – said: “Touts continue to secure huge profits at the expense of sports and music fans. Fans are helping to drive hugely inflated prices in the secondary market, and continue to pour thousands of pounds into the wallets of the touts. Those fans should be aware that, in buying tickets from unauthorised outlets, they could find themselves barred from entering events if their tickets are found to be fraudulent, or their identification does not match up with the ticket purchaser.”

In a trend following the previous year’s Index, sports tickets are resold consistently for far more than their face value. Sports tickets in 2010 are reselling on online auction sites for 85% more than the original asking price, which represents an increase of 14% on 2009 (71%).

A rugby ticket for the Heineken Cup semi-final between Munster and the Northampton Saints, for example, sold on the black market for £144 – a staggering 188% over the face value.

Hamilton continued: “There are serious security reasons for crowd segregation. The resale of tickets can hamper efforts by police and security providers to ensure Health and Safety in stadiums. Heated rivalries can unfortunately overspill into physical or verbal aggression. It’s vital that every effort is made to keep opposing fans apart, but touting isn’t helping.”

Examples of recent touting activity

A pair of tickets to see Paul McCartney at the Dublin RDS sold for £450 – that’s 235% over their face value, while a pair of Michael Buble tickets at the O2 arena sold for 116% over the face value.

On top of that, a pair of tickets for the V Festival sold for £430 despite a face value of just £162.50.

Researchers found many of the tickets sold are ‘phantom tickets’ and do not even exist, as touts prey on peoples’ desire to secure ‘must have’ tickets for sold out events. At one point, tickets for the Kings of Leon Hyde Park gigs were being advertised by online touts before they had even been released for sale to the public!

The average price of tickets in the secondary market has declined in the last two years, which may be a consequence of increased supply. More people have recognised that they can make significant returns reselling tickets, so are snapping them up for events they have no intention of attending.

This practice has led to increased competition between sellers in the secondary market, which has in turn led to a slight depression in prices.

However, the profit for touts on tickets sold in the secondary market has remained consistently high – at over 50% - for the last five years.

Despite repeated warnings, fans are still prepared to risk purchasing non-existent or exorbitantly priced tickets from unlicensed sources where there is little or no legal recourse.