World Series ticket meltdown a boon for scalpers

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The Colorado Freedom

World Series ticket meltdown a boon for scalpers

by Linn and Ari Armstrong

The following article was originally published by Grand Junction Free Press on October 29, 2007.

In the end, what matters most is that the Colorado Rockies fought their way into the World Series. But the two tense days before the Series offer some interesting lessons of their own.

It's an ironic and maddening problem to have: so many people want to buy what you have to sell that you're unable to sell anything to anybody. Yet that's pretty much what happened to the Rockies on Monday, October 22, when the club tried to sell World Series tickets to fans online through a California company called Paciolan. The system crashed, delaying ticket sales till the next day.

The result was that tens of thousands of fans (including your junior author) spent fruitless hours trying to buy tickets, only to end up staring at blank or mocking computer screens. But a lucky few... they got to purchase two tickets for themselves and two to sell on ebay for hundreds of dollars over face value.

A lot of people just gave up in frustration, ensuring that professional scalpers would land even more of the tickets.

The general feeling is that, when the Rockies return to the World Series next year (for hope springs eternal), the club should institute some sort of lottery system, so that everybody has a fair chance to scalp tickets.

Yes, we know all about Baseball Utopia. In this magical land, the "face value" of tickets is the one, morally necessary price at which tickets must be sold. There are exactly as many "true fans" as there are available tickets, and the club sells one ticket at face value to each true fan. No greedy scalper is able to steal a ticket from a true fan to sell at more than face value to a false fan. Nor is a scalper able to rob a true fan by charging more than face value.

Somebody on actually used the term "thief" to describe anyone who sells a ticket "for so much above ticket value," however much that might be.

Denver's 7News quoted an undercover cop who busted a scalper during the National League Championships. The officer said, "One (alleged) scalper that we have in custody purchased 60 tickets for $3,000 and was going to sell them for over $14,000 profit... These people are so greedy. Even when I offered him $540 for the tickets, he refused and wanted the $600." The officer confiscated 58 of the tickets.

So, in other words, it's "greedy" to resell tickets for more than their face value to fans eager to buy them, but it's not "greedy" to spend tax dollars and police resources to take 58 tickets from the guy who bought them.

But in the real world, away from the dreamy land of Baseball Utopia, the fair market price is determined by supply and demand. Let's take oranges. If too many people grow oranges, they'll have to sell them for too little to make a profit, and the least efficient growers will seek work elsewhere. If storms reduce the orange crop, buyers will bid up prices. Lower prices mean that more people will buy oranges. Higher prices mean that people who don't care so much for oranges will spend their money on something else.

What would happen if, absent any other change, every grocer suddenly cut the price of oranges in half? Or what if everybody suddenly fell in love with oranges, but grocers barely raised prices? More people would buy oranges, until the oranges ran out. Maybe some of those lucky enough to buy oranges early in the day would "scalp" their oranges for more than "face value." Or maybe grocers would institute a lottery system, so that shoppers could have a fair shot at buying cheap oranges.

But why don't the grocers simply raise the price of oranges until shoppers choose to limit their purchases to existing supplies? Would it somehow be "unfair" for the grocers to make this extra money? The alternative is that orange scalpers make the extra money and/or some buyers are randomly excluded.

The Rockies were selling Rockpile tickets that normally go for $10 for a World-Series price of $65. Is that markup somehow more fair than the additional markup of a scalper? Why? The fact is that a lot more people are interested in seeing a World Series game than a regular game. If people don't decide whether to go to a game based on price, then they will decide based on blind luck. Is that somehow more fair?

There's one very simple way that clubs could make sure that they sell tickets only to fans and that scalpers don't walk away with any of the profits. And that is for the clubs to auction the tickets to the highest bidder.

The Colorado Freedom