City Council Passes Ticket Transparency Bill; Broadway League Opposed

This week, the New York City Council passed a new ticket transparency bill related to advertisements. The bill was not opposed by any of the major ticketing services--Ticketmaster, SeatGeek, etc.--but it was opposed by one major player in the city: The Broadway League. Just why the League was so opposed to the bill gets a little confusing.

This city bill builds on a state law that Governor Hochul signed this past summer. The state law requires sellers to list the total ticket price, inclusive of all mandatory fees, and set forth what portion of the total cost is attributed to any mandatory fees, up front. In other words, when you buy tickets online to a Broadway show, it used to be that sellers could show you the base price, and it wasn't until you selected the tickets and got to the next page that the fees were sprung on you. Now, from the start, the seller must disclose the total cost of the ticket including fees, the cost of the ticket itself (minus fees) and the amount of mandatory fees. (Physical delivery fees need not be included.) The base cost also can't be listed in a larger font size than the all-in cost, so no cheating that way.

What the new New York City bill--which, given that it has Mayor Adams' support, will likely go into effect fall 2023--does is it extends the New York state law to advertisements, at least in terms of requiring an all-in price (breakdown optional). In other words, the New York State law is directed at point-of-sale and honest disclosures there, the New York City law is focused on advertisements.

"With this law, companies will no longer be able to say, 'Tickets to ALADDIN start at $20,' unless you can actually get a ticket all in for $20," Councilman Justin Brannan, who sponsored the bill, said at a City Hall news conference.

Basically, it is an anti-bait-and-switch law. Doesn't seem super controversial, right? But the League opposed it. In a written statement before the vote, the League stated it was pro-ticket transparency, but believed the new State law adequate. The statement read, in part: "[The city bill] introduces significant compliance challenges with respect to digital advertising, open-ended runs with varying ticket prices (as is common for Broadway), multiple distribution outlets, promotions and dynamic pricing." At a hearing about the bill, Tom Ferrugia, Director of Governmental Affairs at The Broadway League, read the League statement with limited added context, again stressing that a concern was advance sales through multiple distribution outlets.

The League declined to comment for this story, but League members on background expressed their greatest concern was being responsible for listing fees charged by a variety of sellers, which is in line with the argument Ferrugia made. A representative of Councilman Brannan's office contacted for this story said he had heard these concerns, but explained that the bill would not require a production to list a third-party seller's prices, nor would it hold a production liable for any false advertising a third-party seller may do. A production need only correctly advertise the prices of tickets it is selling directly.

Let's say ALADDIN in fact had a $20 rear mezzanine ticket. As the Councilman's office explained, if the $20 was inclusive of the New Amsterdam facility fee--so it was really a $20 total ticket--as long as there was a single ticket in the house available at the box office for that $20, ALADDIN could advertise "Tickets start at $20" regardless of fees from online sellers. However, Ticketmaster could not advertise it had ALADDIN tickets starting at $20 because, due to Ticketmaster's fees, it would not have tickets starting at $20. (Absent an agreement between a producer and a seller that places the misdeeds of the seller at the foot of the producer, if one of the "multiple distribution outlets" that the League referred to placed a false ad, the violation would be the responsibility of that outlet, not a production.)

According to the Councilman's office, an advertisement could state the box office all-in price, even for a new show for which the physical box office has not opened yet. So a Times ad running while a show is available online, but three weeks away from physical box office sales, could still state: "Tickets start at [base value plus facility fee]." That is true because the producers are indeed offering that ticket without online seller fees, it is simply not available yet.

So it isn't as if, when placing an ad, the producer needs to be concerned about fees "multiple distribution outlets" may impose. It is only if those distribution outlets advertise that they need to be in compliance and list their true all-in price for consumers. Now, the League no doubt has an interest in protecting all sellers of tickets, because there are a lot of Broadway tickets to move. There is an argument that digital ads from third-party sellers listing price ranges sell tickets. And the higher the price ranges stated in the initial advertisement, the less likely people will click. (If third-party sellers don't sell tickets, they stop buying tickets; it's all part of the same infrastructure, even if not technically an authorized part. Plus, there are sellers that are not the official source of tickets, but still have direct relationships with producers.) However, this impact is not a direct one.

But there are additional nuances here. The small facility fees will need to be included in the advertised price. Also, the League statement referenced varying ticket prices, dynamic pricing and digital advertising. It is true that this law prevents you from misstating a ticket price in an advertisement. Therefore, if you place an ad that says "Tickets start at $20" but dynamic prices lead you to jack up that starting price before (or contemporaneous with) an ad, you would be in violation of the new law. This could be problematic with digital ads. Digital ad buys are often purchased ahead for a set period of time. If the ticket prices change during the period of time when the ad is running, a producer would likely be in violation if that producer did not change the listed prices on that ad. (A producer running a promotion that would make tickets cheaper than the price stated on an ad might technically run afoul of the letter of the law, but would likely not be cited for a violation.)

It is important to note though, many official ads don't state any ticket prices. This law has no impact on those. It simply prevents pricing misrepresentations in advertisements that do list prices. Generally, those don't tend to state a range, but rather a 'starting at' cost, similar to the example Councilman Brannan used.

The League statement included the following sentence: "Implementing these changes while Broadway is still struggling to return to pre-pandemic ticket sales levels would be extremely challenging." However, no member I contacted could readily list implementation difficulties. (Also note that because this is a local city law, it will not impact advertisements for tours.)

Despite the protest from the powerful League, the ticketing transparency bill passed unanimously (49-0). The first violation of it has no fine, the second violation warrants not more than a $250 fine and additional violations might cost an offender $500.

How it changes Broadway advertising remains to be seen. League members spoken to said they will likely shy away from listing prices at all or opt for a starting price with room to grow. Undoubtedly, the impact on Broadway shows will be less than it is on events held at venues without a physical box office.

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