Ticketmaster charges: A concert killer

After paying a 30% to 40% premium over the face value of a ticket, some concert goers have had enough of Ticketmaster's hefty fees.

By Jessica Dickler, CNNMoney.com staff writer
October 11 2007

Hankering for some live music or sports this fall? Be prepared to shell out some cash. Above and beyond the rising face value of tickets is a heaping helping of service fees. Nearly anyone who has ever ordered a ticket through Ticketmaster will say the charges, which can be as much as 40 percent above the face value depending on the event, are excessive.

The company claims it's the cost of doing business, but consumers are tired of paying through the nose for nose-bleed seats, and even some politicians are considering capping the fees levied by ticketsellers. There is no doubt that Ticketmaster has mastered the ticket-selling business. The company, which is a division of IAC InterActive Corp. (Charts, Fortune 500) has 9,000 clients (mainly arenas, stadiums and theaters) in 20 countries and exclusive rights to sell tickets through its Web site, retail outlets and call centers.

Last year the West Hollywood, Calif.-based company sold more than 128 million tickets with a face value of over $7 billion and raked in the service fees.

On top of the face value of a ticket, which is determined by the promoter, venue or artist, Ticketmaster levies a convenience charge that covers the costs of providing tickets at local ticket outlet locations, staffing call centers and ongoing maintenance of its Internet-based system. But ticket buyers must pay this charge regardless of how they purchase their tickets, be it on the phone, online or in person.In addition to the convenience charge, there is also an order processing fee which covers taking and maintaining the order, arranging for shipping or coordinating with the box office will call. And in almost all cases, additional delivery prices may be charged based on the delivery method.Standard mail and will call are usually, but not always, free, although other delivery options, like FedEx, UPS and even email cost extra.

There can also be a facility charge, which varies depending on the location and goes directly to the venue, not Ticketmaster.S

o say you purchase a $35 ticket through Ticketmaster for an upcoming event, there could be a convenience charge of $8.35 (per ticket) in addition to a $3.15 order processing fee and $1.75 fee for an e-ticket. That adds up to a whopping 38 percent premium over the face value of the ticket price."Like any business, we have every right to seek a fair return on our investment and efforts," the company said in a statement.

Even artists have complained that the company's anticompetitive practices result in unfair markups of their concert tickets. In 1994, the rock band Pearl Jam attempted to sue Ticketmaster for refusing to lower its service fees for the band's tickets. But because Ticketmaster had exclusive contracts with so many large venues, Pearl Jam had no alternative but to cancel their tour....

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