Empty Seats Olympic Style

Much attention was made during the 2012 Olympic games in London over the row after row of empty seats for many of the venues.  It seems that tickets are being allocated to various countries, agencies, athletes and families who simply don’t want to attend those events.

I might suggest we’ll see it in Russia too:

MOSCOW –  The upper house of Russia’s parliament has passed a bill calling for fines of up to $30,000 for anyone scalping tickets to the 2014 Winter Olympics in Sochi.

The bill, passed Wednesday by the Federation Council, now needs to be signed into law by President Vladimir Putin.

For low-level scalping by individuals, the fine would be five to 10 times the ticket’s face value, but penalties will be heavier for scalping done as a business.

Russian Olympic Committee head Alexander Zhukov told a news conference that “we as Olympic organizers have an obligation under our contract with the International Olympic Committee to prevent speculative price hikes for hotels and Olympic tickets.”

There needs to be a market for these tickets.  For those who don’t wanna go to the venue or the game, they need an easy method for selling those tickets to someone who does.  And at fair market value.

For an example of the London experience:

Germany, Canada, Norway and Slovakia are represented here as having produced suspects in a strict crackdown on ticket scalping and other ticket fraud, stretching from venues across the city to global Internet outlets.

Since the first full day of competition, the Metropolitan Police Department has swept up more than 30 people for scalping or ticket “touting,” including a 29-year-old man who was sentenced this week to 28 days in jail for hawking tickets outside the Olympic boxing venue.

In a separate action this week, three Norwegian companies, which operate 12 websites, have agreed to provide full refunds for up to 15,000 tickets that they were not authorized to sell, the result of an ongoing inquiry by Britain’s Office of Fair Trade.

The string of criminal arrests and civil actions represent yet another slice of ticket woes that have shadowed the Summer Games in which organizers have been scrambling since the start to fill empty seats across the venues.

Just make these tickets available to the market and the market will adjust the price until the stadium is full, or more full than it otherwise would be.

But in classic “big government style”:

The troubles prompted the chairman of the British Olympic Association, Colin Moynihan, to call for the International Olympic Committee to take over the ticketing operation and provide a centralized system for ticket distribution.

There’s no reason for these laws to be on the books.  And there’s no reason for the centralization of ticket distribution.

Set the tickets free!

 

4 responses to “Empty Seats Olympic Style

  1. The reason for many of the empty seats are that scalpers take the tickets at face value, monopolizing that miniature economy, and then extract more value from customers by charging more than face value to go in. The scalpers are free riders who add transactional costs to an otherwise free economy. Every scalping law I’ve ever seen has only prohibited sale of tickets at more than face value, and the stories you link suggest the same. Scalping is anti-capitalist.

    • The reason for many of the empty seats are that scalpers take the tickets at face value, monopolizing that miniature economy, and then extract more value from customers by charging more than face value to go in.

      Well, yes. Scarce resources will drive price up. Concert tickets are prime examples.

      However, the opposite must then also be true; low demand venues would drive price DOWN. For example, early rounds of low interest events would almost be free. And if not, should be.

      The scalpers are free riders who add transactional costs to an otherwise free economy.

      Well, they provide the service of marketing and moving the tickets. As it is, tickets aren’t being used because they have no value to the holder.

      Scalping is anti-capitalist.

      I disagree It is capitalist at its best.

  2. If no one is in the arena, then the prices of the tickets must be lowered. Scalpers, meanwhile, sell tickets for higher than face value because otherwise they don’t make a profit. They only start selling tickets for less than face value near the end of an event when they are simply trying to salvage some value out of them, but that doesn’t really address the issue of getting tickets at lower prices to people who want to watch an event.

    You are apparently assuming that the scalpers are part of the ticket manufacturing and can print them at will, set whatever price they want, and then the market works smoothly. Instead, scalpers buy tickets at face value and then sell them at higher than face value. As I said above and you carefully ignored, every scalping law I’ve seen (and the articles you linked indicate the same) only prohibits selling tickets for more than face value, which has nothing to do with lowering the price to increase sales.

    • Scalpers, meanwhile, sell tickets for higher than face value because otherwise they don’t make a profit. They only start selling tickets for less than face value near the end of an event when they are simply trying to salvage some value out of them

      The complaint isn’t that tickets are overpriced. The complaint is that there are no tickets AND the venues are empty. It seems that whoever is holding the tickets aren’t finding it worth selling. I think that is because they aren’t allowed to sell the tickets. That or the bother of selling the tickets isn’t worth the low price.

      You are apparently assuming that the scalpers are part of the ticket manufacturing and can print them at will, set whatever price they want, and then the market works smoothly.

      It is true that most of the time people get mad at scalpers in a sold out show when tickets on the street go for crazy amounts of money. But the point is that we should make sure the show is perfectly “served” at market value. So, if Mozart would return and only deliver one show, the price of the ticket should be set on the market, not set in the box office. Either way their is going to be rationing. In one case it is by money in the other[s] it is by luck, time or political pull.

      As I said above and you carefully ignored, every scalping law I’ve seen (and the articles you linked indicate the same) only prohibits selling tickets for more than face value

      I’ve read both again twice I don’t see that stipulation. Unless you mean that scalping is, by definition, selling at above face value.

      which has nothing to do with lowering the price to increase sales.

      You are right; scalping doesn’t help price – in most cases it makes the ticket more expensive. But again, the complaint isn’t price it’s availability. And scalping DOES fix that problem.

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