MLSE taking aim at resellers’ profits
Some Leafs, Raptors season ticket holders say they’ve been unfairly targeted by new surcharge
As the Leafs and Raptors embark on playoff runs that promise to push ticket prices into the stratosphere, the teams’ owner is muscling in on profits from the scalping of its own seats.
Maple Leaf Sports and Entertainment is doing this by imposing a higher price on hundreds of regular-season ticket holders they believe are scalpers.
Some ticket holders say MLSE is penalizing them even though they’re not in the reselling business and only occasionally post their unused seats for sale.
The price hikes will apply to thousands of seats in the Air Canada Centre starting next season.
An ongoing Toronto Star/CBC investigation into online ticket scalping has learned that MLSE issued invoices to season ticket holders it has deemed “commercial” resellers, demanding between 32 per cent and 37 per cent in markups — ranging from $2,000 to $8,000 for a pair of seats.
MLSE doesn’t call this a surcharge; the company says it’s simply cancelling the discount that season ticket holders normally get.
“MLSE believes that commercial resellers are in the business of reselling tickets and should pay the full cost of their season seat memberships. Season seat members who buy tickets primarily for their personal use should be rewarded for their loyalty as true fans with a pricing discount and other benefits,” said spokesperson Dave Haggith.
MLSE’s scalper surcharge is part of a larger phenomenon, in which sports franchises are moving in on the scalping market. A recent Star/CBC investigation found the Toronto Blue Jays have struck their own deal with StubHub, the world’s largest online ticket reseller, which gives the club an undisclosed percentage of every Jays ticket sold on the site.
The Star and CBC reviewed a dozen Leafs and Raptors invoices and spoke with five season ticket holders hit with the scalper surcharge. They say MLSE’s move to crack down on scalping does nothing to help fans get tickets and will end up driving ticket prices on the online scalping market even higher than they already are.
Some season tickets holders say they have been caught in MLSE’s scalper net unfairly, after selling tickets only to games they couldn’t attend.
“Yes, I do sell tickets. I’m not denying that. I’m not, you know, trying to get away from that, but I’m not a professional broker,” said one season ticket holder who asked not to be named. While his pair of Raptors seats were hit with the surcharge, he has a pair of Leafs tickets that have not been marked up, and he does not want any more attention from MLSE. “I’m selling on Kijiji and Craigslist … It’s far from professional.”
The season ticket holder attends between 10 and 15 games every season for both teams.
“I think you’d be hard-pressed to find a season-ticket holder who goes to more than 15 (Raptors) games out of their 41,” the ticket holder said.
It is not clear how MLSE determined which of its season ticket holders were “commercial resellers.” When asked how many tickets someone must sell before MLSE labels them a scalper and dings them for thousands of dollars in penalties, the company wouldn’t say.
Haggith would not give an exact number, but said that less than 3 per cent of Leafs season ticket holders and about 13.5 per cent of Raptors season ticket holders were affected.
The surcharge invoices went out in late February — only a month before payment for next season was due — leaving season ticket holders little time to consider their options. After consulting with lawyers, several of them told the Star they paid up so they wouldn’t lose their tickets, though they attached notices indicating they were paying under duress and are considering legal action.
They may have grounds to do so, said Toronto competition lawyer Michael Binetti.
“MLSE’s decision to stop treating all season ticket holders alike has the potential to greatly impact the secondary market and may stifle competition there by giving some resellers access to tickets at a lower price than others,” said Binetti, who is not representing any affected ticket holder.
“They’re saying: ‘Depending on how you use our product, we are going to treat you differently,’ ” Binetti said. “Well hold on, if I buy something, don’t I have the right to use it however I want?
“There’s a risk that MLSE’s markup for resellers could be considered an abuse of their dominant position in the ticket market,” Binetti added. “The Competition Bureau has been taking an interest in these kinds of cases where decisions made by a dominant company affect the market downstream.”
MLSE says it stands by its decision to charge some season ticket holders — those the company deems to be commercial resellers — more than others.
“MLSE does not believe that its decision to offer pricing dis- counts and other benefits exclusively to season seat members who buy tickets primarily for their personal use amounts to unfair pricing under the Competition Act,” Haggith said.
MLSE’s attempt to squeeze scalpers “is definitely going to be bad for fans,” said veteran ticket broker Russ Blacklock, with RJB Promotions.
“I’ve been a season-ticket holder for over 35 years,” he said. “At no time since they’ve known about me and what I do has this entered the situation … they were happy to treat us equally.
“Now, they come into the playoffs with lots of young exciting players. It’s an opportune time to try and maximize revenues, and that’ll all be on the back of fans. So, for me, next year, having paid 30 per cent more, when fans need tickets, I have to work that 30 per cent in somewhere. It’s only going to cost the fans more to deal with me.”
Season ticket holders say MLSE tolerated their reselling of seats when the teams were performing poorly several years ago and the resale market didn’t command the same kinds of markups that today’s playoff teams are driving.
The anonymous season ticket holder hit with the scalper surcharge agreed.
“Now all of a sudden, (the Raptors) are No. 1 in the East and they’re about to make an NBA finals run potentially, and now they come in and say: ‘Oh, you know what? You’re a ticket broker.’ ”
Before 2015, scalpers were officially banned in Ontario. Several ticket brokers told the Star that teams worked with them anyway to get rid of their unsold tickets.
“We got deals back then. We had agreements where we were getting discounts and group sales. They gave me a couple of dollars off the ticket,” said Ervil DiGiusto, a ticket broker with StarOne Tickets.
When the Ontario government changed the law to allow scalpers to sell for above face value if they offer a money-back guarantee, it brought the scalping market out of the shadows. It also encouraged teams to enter the ticket resale market themselves.
The once co-operative spirit between MLSE and scalpers is officially over, says DiGiusto.
“They basically want a piece of our action; (that’s) really what it comes down to,” he said. “At the point where the ticket prices are, we cannot pay what they’re asking us to pay because it is more than what we’re getting for them. They want the total. I mean it’s just squeezing the orange as much as they can.”
In the fine print of the commercial reseller invoices, MLSE invited those hit with the higher prices to apply for its “Trusted Reseller Program,” but offered no details on what benefits the program offered.
All five season ticket holders who received the reseller invoices told the Star and CBC they called to inquire about the program and MLSE staff offered to cancel the surcharge if they were approved.
Those who tried to apply were then told the program wasn’t set up yet, so they would have to pay the markup in the meantime.
After the Star and CBC asked for details of the Trusted Reseller program, MLSE said it has decided to hit pause on the plan, for now, and will not be working with ticket brokers next season after all.
The Winnipeg Jets’ owner, True North Sports and Entertainment, handles commercial resellers’ profits in a different way.
Jets season ticket holders are required to lay down a deposit and sign an agreement that states, among other things, that they will not resell their tickets for a profit. If they breach the rule, they lose the deposit and their season tickets are cancelled.
“It has been our practice to cancel broker tickets,” said Kevin Donnelly, True North Sports and Entertainment’s senior vice-president. “It takes a while to … determine who exactly is doing it. But it is absolutely our preference that tickets for the Winnipeg Jets remain in the hands of Winnipeg Jets fans.”
In Toronto, where only 96 tickets to tonight’s Game 3 between the Leafs and Boston Bruins were ever made available to the general public through the box office, the scalping market has been going strong.
More than 2,800 tickets for the game have been posted on the online resale platforms StubHub, SeatGeek, StarOne, TicketPartners, TicketsNow and Ticketmaster Plus. The average asking price is more than $1,500 for a pair.
Data collection and analysis by the CBC’s William Wolfe-Wylie and Valérie Ouellet.