LA in the '80s: Supply side Rockonomics
In 1984 Bruce Springsteen would go on stage at his sold-out concerts in LA and rail against ticket scalpers. It was because the Boss knew nothing about supply and demand.
Los Angeles Times
Oct. 28, 1984
Scalpers were born in the U.S.A. too.
Yet everyone in rockdom — fans, critics, performers — seems to hate them. They're constantly denounced as arrogant, greedy profiteers who gobble up all the good seats, cater only to the rich, exploit the devoted fan, etc. Many people even want to outlaw them.
Maybe it's because my dad "scalped" stocks and bonds for a living, but, you know, I feel kind of kindly toward ticket brokers scalpers.
Admittedly, I'm a hopeless libertarian who believes in such un-Americanisms as maximizing personal and economic freedom and keeping government out of our lives as much as possible.
But I just don't see what threat honest scalpers pose to society. (I'm not talking about the few con-artists, counterfeiters and fraud-mongers who weasel inside deals or use trickery and deceit. )
Scalpers work hard. They create jobs. Satisfy their customers. Aren't subsidized by government. Don't use guns. They're entrepreneurial, small, independent businessmen.
Isn't this part of what America's all about? I guess not, because so many people despise them, particularly Bruce Springsteen fans.
In his case, it's somewhat understandable: America's working-class hero sells out 111,000 seats for seven Sports Arena concerts in about 20 minutes. Thousands of his fans are left ticketless and disappointed.
Two days later, they see newspaper ads asking $250 for Springsteen tickets, all of which were priced at $16. They feel cheated. When they read about agencies selling hundreds of tickets at prices ranging from $40 to $400, they get hysterical (see Letters Annex, below).
All blame the Evil Scalper, of course. But sorry, blue-collar fans — rockdom's scalpers aren't the problem. The Boss himself is.
It's all a matter of economics, dismal supply-and-demand stuff. But it's inescapable.
Springsteen, quite simply, is not putting a high-enough price tag on himself. The demand for his concert tickets in Los Angeles is fevered. He could cool this demand by raising his prices or he can sate the demand by supplying more concerts.
But it seems there aren't enough days in the year for Bruce to satisfy the national demand for his shows. Therefore, his only real option is to raise the ticket price. But the Boss is a good guy and a working-class hero, so he insists on keeping his prices low.
It's a generous gesture. But he must face the economic consequences: Uncountable hordes of his L.A. fans — possibly several hundred thousand — naively assumed that all they had to do was line up somewhere and buy a seat for $16.
Most of them went away empty-handed and bummed-out. It was inevitable. They never really had a prayer, because only 111,000 tickets existed in the first place.
It is this wild and crazy demand for Springsteen — not scalpers — that drives up the price of Springsteen tickets. Scalpers — who probably gobbled up less than 10 of Springsteen's tickets — take advantage of excess demand. They don't cause it. They don't cause high ticket prices, either, just as stock brokers don't cause higher stock prices.
Yet there are cries to outlaw scalpers or put ceilings on their mark-ups, the way some states do. (The only California state law covering scalping is Section 346 of the Penal Code, which makes it a misdemeanor to resell tickets on the grounds of an event. )
But what are the scalpers crimes? They don't use guns. Their clients aren't victims. Each time a scalper sells a ticket, there's a satisfied customer. Both parties share gains. In a free-market economy, billions of such voluntary market exchanges occur each day.
The services provided by ticket brokers include supplying tickets not only to corporations but to Springsteen fanatics for whom price is no object when it comes to seeing Bruce.
Also, agencies serve people who can't get to the box office, either because they live out of town or because they can't afford to take off from work to wait in line all day. Without scalpers, these fans are out of luck.
But if Springsteen and his people insist on trying to thwart scalpers, they're going to have to find a way to distribute tickets more equitably.
Among his options, Springsteen could reduce or eliminate the pool of tickets set aside for Los Angeles' huge population of record industry and media people. He could charge $100 a seat for the first 10 rows, giving him not scalpers the extra loot.
(But then the average fan could never win a close-in seat by waiting in line. ) He could try unreserved seating, which would make each ticket equal in value. (Does anyone really believe that a front-row seat and a seat in row ZZ are each worth $16? )
Springsteen could also try an honestly, conducted mail -in lottery or drastically reduce ticket-selling locations. He could limit tickets to one or two per person, purchased at the door the night of the show, instead of six purchased in advance. Or award tickets based on answers to a New Jersey trivia contest.
How to do it is up to Springsteen. He's the Boss. But it's not always easy to be fair, and many of these methods have been found to be grossly impractical or bureaucratic. Some would impose terrible burdens on Springsteen, who already works harder than most rockers to keep the customers satisfied.
The worst possible solution, however, would be to get government to outlaw scalpers or limit their profits (based on some politician's notion of what constitutes a "fair return").
Springsteen supports such simplistic, unfair legislation. But it's ironic: Bruce himself would write the first protest song if a law were proposed that prevented auto mechanics from making more than $7 an hour.
And his armies of loyal fans would scream bloody murder justifiably if some demagogic politician wanted a law to prevent rock stars from earning annual incomes in excess of, say, those of high school principals.
Oh well. This is America. Springsteen, like ticket brokers, is free to lobby for whatever he pleases, even for another bad law that would only drive the trade in concert tickets underground and create a new group of criminals who have no victims.
I just wish he would lay off scalpers. They're not heroes or saints. But they're not villains, either, Bruce. You were born to run. Maybe they were born to scalp.
****
In 1984, when the LA Times had a circulation of about 1.1 million, I served as the Calendar section’s Letters Page editor. It was a great pleasure to be able to choose among the dozens of letters that hated or loved me and the Econ 101 lesson I gave Springsteen.
Letters Annex
THE SCALPERS AND THE BOSS
Bill Steigerwald misses the point ("Supply Side Rockonomics," Oct. 28").
I think most Springsteen fans would concede that scalpers, like the rest us, are entitled to as much as the market permits. The real problem is that scalpers are granted — thanks to the concert promoters — first access to the tickets.
Springsteen fans are only asking for a fair chance. Yet as long as sweetheart deals exist between the promoters and the scalpers, the truly free market Steigerwald desires will never be a reality.
DARYLL ANDY, Los Angeles
Excuse me, but just what kind of criminal element writes for your paper now?
Steigerwald believes ticket scalpers are honest, hard working and create jobs ( how? ).
Hey, Bill, did you stand in line for eight or more hours on Oct. 1 like many of Bruce's fans?
Did you see Mr. Scalper with four priority numbers in his hand and a whole slew of tickets that really made you wonder who the security guards were working for Ticketron, or the scalper?
I believe in free enterprise. I also love the Bruce. Ticket sales this year were a fiasco. Scalpers cashed in on a lot of fans' devotion. Why do you think they call them scalpers?
MICHELLE S. LANPHERE, El Segundo
Experiencing an event like Bruce Springsteen's concert is more along the lines of attending an art exhibit than it is buying soap or a car. For example, as I sat in the Sports Arena and listened to Springsteen's acoustic pieces, I experienced something as profound as I have ever felt at a museum. And we experience museums at minimal cost.
PATRICK LYNCH, El Segundo
Steigerwald presents a powerful, though unconventional, defense of the despised ticket "scalper."
No one, of course, wants to pay extra money to see a popular performer. But why should everyone wait in line for hours or days to buy a ticket, when a middleman can take care of the hassle for those who want to employ him?
And who needs the government to decide the "fair" price of music. Government and rock 'n' roll are, after all, natural enemies.
STEPHEN COX, San Diego
Implying that $16 is too cheap for front-row seats tells me everything I need to know about Steigerwald's regard for fair play and regulation.
Ticket scalpers are a public service only when they resell tickets that were purchased openly and fairly. But there is no windfall profit in the "fair" method, so scalpers use downright nefarious means to obtain tickets they can then sell to the public at "supply and demand" prices.
DAVID CROUCH, Los Angeles
Steigerwald is right.
Scalpers exist purely and simply because there is a market for their services. We hear about what they ask for their tickets but not what they finally sell them for, or how many tickets they wind up holding that never sell.
In the final analysis, I'm not forced to pay the going rates for their product — the decision is mine and mine alone. I wish I could say the same for the IRS.
GEORGE RONAY, Huntington Beach
While it is true that an individual's greed does inadvertently benefit others, this same greed motivates behavior, e.g., collusion, which keeps the market from being ideal, i.e., perfectly competitive. That is why government intervention is often sought.
Really, Steigerwald should keep his simple-minded view of economics to himself. NANCY COLMAN, Irvine
I believe the way to make ticket prices fair for all is to sell all tickets to ticket agencies ("scalpers") rather than distribute them through mass-ticketing chains.
In this manner, the market could be more accurately judged whereby the highest prices would exist in the front rows with the price being determined by the quantity demanded, not by the Boss.
Since there would be many more good seats available at market prices, the best seats would cost less than if current policies remain.
ALAN MARK, Fullerton
I agree with Bruce that ticket agencies should be limited in the prices they can charge. Doesn't a 2,500 percent "mark-up" seem a little excessive?
GLORIA SAWYER, Anaheim
So, scalpers are hard working, entrepreneurial businessmen?
Oh, come on. Scalpers are the lowest scum of the earth. I had the unique opportunity of seeing these hard-working businessmen at work the other night at the Sports Arena. Steigerwald should spend an evening with these sharks. He had better be prepared for insults, harassment, and unethical business practices.
Steigerwald, take your libertarian ideas and shove 'em.
KIM CRUICKSHANK, Dana Point
The exploitation of Springsteen is terrible and very distressing. The people who relate and empathize with Springsteen's poignancy in his songs don't have a bloody dime (or dollar) to see him in concert.
Something is very wrong. I was an avid Springsteen fan, but looking at the way Springsteen has changed, and the way he is supported by a seemingly noveau-riche class — forget it.
The rich will always try to grasp what it is that poorer people have over them: the spirit of survival and strength to get through the worst. . . without money.
EILEEN SCHAUERMAN, Los Angeles
Must we listen to Peggy Ruffra bemoan the fact that she can't afford scalpers prices for Springsteen tickets and still pay her bills and eat (Calendar Letters, Oct. 28)?
It's the '80s! Here we are some 46 months into the Reagan years and you still haven't caught on to the theme of the decade.
If you're not rich — Who cares? On a tight budget? You don't exist! What are the piddly problems of someone who hasn't even got $150 in "disposable income" compared with the financial anguish of the Jacksons in their disastrous tour?
Peggy, you just aren't willing to show the real commitment of a true fan.
Fred Ross of Front Row Tickets is right: "The true fan is willing to do whatever it takes to get the ticket"— even, presumably, if that entails cornering a "broker" in a dark alley with a .44 Magnum and liberating from him enough tickets to scalp yourself into a higher tax bracket.
Reaganomics, Glory Halleliah! How I look forward to staying the course for four more years.
DOUGLAS McEWAN West Hollywood