Examination of Witnesses (Questions 1-19)
MR PAUL
VAUGHAN, MR
ALEX HORNE
AND MR
NICHOLAS BITEL
26 JUNE 2007
Chairman: Good morning, everybody. In
the last few months the Committee has had representations from
a number of sporting bodies and from the music and entertainment
industries on the subject of ticket touting. The DCMS has also
been holding a series of summits and there is clearly a lot of
public interest around this topic. It is for this reason that
the Committee has decided to hold a one-off hearing this morning
in order to take evidence from all those with an interest. I would
like to begin by welcoming representatives of the sporting bodies:
Paul Vaughan of the RFU, Alex Horne representing the FA and Nicholas
Bitel representing the Lawn Tennis & Croquet Club. Before
we start, Paul Farrelly I believe would like to make a public
statement.
Paul Farrelly: I would like to declare
my interests as I am the Secretary of the All Party Parliamentary
Rugby Union Group and of the Commons and Lords Rugby Union Football
Club. Chairman, we have received allocations of tickets from the
RFU but we have never ever sold them on to anyone at below face
value or above face value!
Q1 Mr Sanders: You represent the
Five Sports, being the England and Wales Cricket Board, the Football
Association, Lawn Tennis Association, Rugby Football League and
Rugby Football Union; and the Five Sports list four concerns associated
with ticket touting: pricing genuine fans out of the market; diversion
of resources from the sport; the undermining of consumer protection;
and public order issues. Which do you consider to be the most
serious of those?
Mr Vaughan: If I may start, it
is probably worthwhile just touching on why we see touting as
a problem generally, and how we allocate our tickets so the Committee
can understand how things work. Generally the RFU, and many of
the other sporting bodies as well, make most of their tickets
available for their membership. This is primarily to encourage
either players to play, or volunteers to continue within the sport
after they have stopped playing, and it is a reward system in
order to make it work. They are not priced in an economic fashion;
they are not priced in a true free trade sense of, "We'll
maximise the amount of cash coming in". Basically we want
to price our ticketing so that they are affordable for our supporters,
who tend to be the players and the volunteers within the game,
and we want to give them first stab at it but we want to make
them affordable. I think in the same way that London 2012 sees
the assurance of tickets reaching real fans rather than those
with the deepest pockets, and the sporting legacy to the Olympics,
all sports probably see this being an ongoing situation on an
annual basis for our own sports. I think the secondary market
exists on the basis that there is a margin to be made by people
who are able to obtain tickets. What we are trying to do is ensure
that the person who comes to Twickenham, for sure, and Wembley
and the All England Tennis Club is very much the genuine fan we
want to see in the crowd, rather than the person with just the
deepest pockets.
Q2 Mr Sanders: Can you define what
a genuine fan is?
Mr Bitel: From our point of view
the makeup of the crowd is probably the most important element.
Some of you may recall some years ago a Man Utd player complaining
about the prawn sandwich brigade watching Man Utd and sucking
out the atmosphere of football matches. The atmosphere is very
important to us. We try and tailor who gets the tickets.
Q3 Mr Sanders: What is a genuine
fan? From what you have said, it sounds like somebody who makes
a lot of noise in a stadium?
Mr Bitel: No, not at all. For
instance, we allocate to tennis clubs up and down the country
because these are people who are supporting tennis at the grassroots
year in and year out, and that is a very important part of the
element of our makeup. We are allocating tickets to schools because,
again, the aim is to interest schoolchildren in tennis and allow
them to come and experience what is one of the premier sporting
events in the calendar. Those types of people are the ones we
wish to protect.
Q4 Mr Sanders: That is not a definition
of a genuine fan; that is just how you distribute tickets.
Mr Bitel: There is no reason why
somebody who pays a lot of money is not a genuine fan—I
accept that entirely; but the problem is that if you put tickets
to the free market and they are only available to those with deep
pockets it prices out the rest of the market.
Q5 Mr Sanders: Is it not the genuine
fan who is likely to pay more money for a ticket?
Mr Bitel: I do not think a genuine
fan could afford, for instance, Wimbledon finals tickets. If you
tried to buy them from the touts at the moment a pair of Wimbledon
finals tickets will cost you £3,000, whereas we are selling
them for £87. I do not think there are many ordinary people
who can afford £3,000 for finals tickets and yet we are putting
them in at £87. Those are the people we are trying to protect.
Mr Horne: If I answer the original
question, Adrian, if that is okay: I am primarily representing
Wembley Stadium today and, therefore, both football, rugby and
concert events; and my major concern with touting, covering the
four things represented in the Five Sports submission, would be
around public order issues, as well as consumer protection. The
issues of managing forged tickets, illegal tickets and duplicate
tickets that most naturally find their way into the marketplace
as a result of this secondary ticket touting route cause huge
problems for us at turnstiles, and huge disappointment for fans
who feel they have obtained a piece of paper, if you like, but
represented on a website as being from a Wembley source and is
not at all. We are dealing with huge issues in a very short space
of time on a public order basis, and defending our own reputation
against consumers who feel let down because they have come into
possession of an illegal and unlawful product and they are trying
to access our stadium.
Q6 Philip Davies: I think the prawn
sandwich brigade was a reference to all the tickets you people
sell to the corporate clients, rather than the tickets that touts
sell on to a handful of people at events, so I am not sure the
prawn sandwich brigade is a good argument for you if you really
want genuine fans there. Perhaps you should not give so many tickets
to your corporate clients. That hardly seems a way of getting
genuine fans in. What I want to ask is: can you give us any examples
of where the Government regulates the secondary market of anything;
where the Government regulates the price and the sale of the secondary
market in anything?
Mr Bitel: In tickets, yes.
Q7 Philip Davies: Can you give me
one industry where the Government regulates the price or the secondary
market of anything? No. I cannot either.
Mr Vaughan: There are probably
a number of markets where the primary market is actually regulated
rather than the secondary, because there is no secondary market
for it.
Q8 Philip Davies: The Government
does not regulate the secondary market, so when people sell art
and think, "I can get £90 for this art", and somebody
thinks, "Great I'll pay £95 for that and I can sell
that on for £200", the Government does not regulate
that because that is the way the world goes round.
Mr Bitel: The Government does
regulate it.
Q9 Philip Davies: The whole world
goes round on people buying things and selling them on.
Mr Bitel: It is a criminal offence
to sell on your ticket for London Underground, for instance.
Q10 Philip Davies: Why are tickets
any different from anything else that people buy and think, "Actually
I could sell this at a profit"? Why should tickets be different
from anything else?
Mr Bitel: Tickets are not a commodity.
I think that is the basic flaw in that particular analysis. Just
in the same way as the Government regulates the laws into who
comes into private land, we are private land and we regulate who
comes into our grounds or stadia; and in the same way we are issuing
a licence in the same way as a landlord issues a lease. If you
are a landlord you can refuse to sell the lease onto whoever you
wish to. We are issuing a licence to enter into our land to particular
people, named individuals; and very often they are named individuals
for a particular reason. For instance, we have issued tickets
to wheelchair users because we want to have a certain number of
tickets available to wheelchair users, and we are seeing those
tickets being touted to the general market, to non-wheelchair
users. We think that is an inappropriate use of the free market.
Q11 Philip Davies: Who loses out
on ticket touting; who are the losers?
Mr Vaughan: If I could just answer
that. It is the opportunity cost to the sport potentially. We
are trying to reward players, volunteers and schoolchildren, people
we want to encourage to stay within the game. At the end of the
day the sport loses because if we do not enable them to keep on
getting their tickets they will not belong to clubs and the sport
will shrink. I believe if you spoke to your own club within this
august body here, they do not sell the tickets on because they
genuinely want to use them. If you looked at the differential
it is an opportunity cost to the sport. The secondary market exists
because we price them lower. If we priced our tickets at an economic
price—there are some prices going on at the moment from
viagogo for the England v Wales game February 2008. Firstly, we
have not even printed the tickets; we have not even designed the
tickets; and they are going at a rate currently of somewhere in
the region of £592 each. We are pricing them, they say within
here, of between £20 and £65: that is wrong.
Q12 Philip Davies: Who is losing
out because somebody is selling it on for £500? You have
got bums on your seats; you have sold the ticket at the price
you wanted to; the person who has paid £500 is happy to pay
£500; the person who is selling it is happy to sell it; who
is losing?
Mr Vaughan: Are you suggesting
that the sport should actually charge £500 to start with?
Q13 Philip Davies: No, I am just
asking: who is losing out?
Mr Horne: The example that Paul
is highlighting here, it could be the end user who may be happy
to pay £500 for a ticket, but that ticket does not exist
yet; it is not in the hands of viagogo and they have no right
to enter into that transaction. Whoever has used that portal to
set up half of a transaction does not have the other half of a
transaction to fulfil. From a consumer perspective the RFU are
somehow being linked with a transaction they have no control over.
Mr Bitel: For example, yesterday
we put tickets on sale via Ticketmaster; these are last minute
tickets that became available; someone bought one of those tickets
at the proper price and two minutes later put it on sale on eBay.
So they never had any intention of coming along, but they just
decided to buy it and resell it. The people who lost were the
next people in the queue who wanted to buy that ticket and lost
the opportunity of buying the ticket at the regular price. In
another case, we have seen tickets which we have issued for schools,
intended for schoolchildren, being touted via eBay in that particular
case. Who have lost out: the schoolchildren who cannot come to
the event. There are a number of people who lose out from ticket
touting.
Q14 Philip Davies: With a limited
number of tickets only so many people can go, so the person who
won out was the person who paid the tout for the ticket. If they
had not had them they would have lost out. A punter somewhere
would have lost out one way or another, whether you had ticket
touting or not, would they not? One of them would not have been
able to go.
Mr Horne: To use the children
analogy, it is unreasonable to allow an open market to have adult
access into an area that has been specifically designed to be
sold for children. A similar analogy you could use for football.
Q15 Mr Sanders: If you are under
16 you go through a different turnstile at a football ground.
Why can you not issue a ticket that is under 16 only with some
form of ID? Therefore, somebody who is over 16 turning up, or
looks over 16, will not be allowed in. It will be obvious that
they fraudulently purchased a ticket. Actually is not the answer
in your own hands?
Mr Bitel: If you cannot stop someone
from selling on a ticket then why should that be? If you see the
evidence from the DTI who have complained that Glastonbury put
photos on people's tickets to prevent them being sold on, it is
not just a question of the answer in our hands. We have got the
DTI saying to us on occasions, "It is unreasonable for you
to put a ticket condition which prevents it being sold on".
In those cases of the schoolchildren it would be unreasonable
apparently, according to the DTI, for us to prevent them being
sold on from schoolchildren.
Q16 Philip Davies: If I buy a ticket
for a sports event and I cannot go, why should I not be able to
sell that on to a friend, or give it on to a friend; or why should
I not be able to pass it on to someone body else? Why should I
have to hand it back to you?
Mr Bitel: If you cannot go you
can get a refund from us; or, if you want to pass it onto a family
member, usually under most circumstances we will say, yes.
Q17 Philip Davies: So you have not
got a problem with people selling on tickets, or anything like
that?
Mr Bitel: Selling on, yes.
Q18 Chairman: It is fair to say that
you are extremely unusual in offering that refund policy. I know
Wimbledon does but a lot of others do not. The RFU, and I believe
a number of other sports, are now using viagogo for an arrangement
as a secondary ticket market?
Mr Vaughan: Certainly not the
RFU.
Q19 Chairman: Certainly two of your
clubs?
Mr Vaughan: Two of our clubs which
are independent businesses—and they drive their ticket sales
in the best way can—do have an arrangement with Viagogo.
I do not personally have a problem with these marketplaces, because
that is what they are; they are allowing an opportunity for people
to exchange tickets. It is whether or not you as the owner of
the seat want to actually have your ticket traded in that way.
We have had a discussion with viagogo, and a very positive discussion,
because we are looking at ways in which we can enhance the exchange
system. We have also done that with Ticketmaster, because we want
the ability for people who cannot go to be able to get their ticket
back to us so that we cannot actually send it on, as Nick said
earlier, to the person who is next on the list who we recognise
to be somebody who actually wants to come and support the sport
long-term, not just because they have got extremely deep pockets
and they just turn up in town that day and decide they want to
go to somebody.
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