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The Podium

Scrap the cap on reselling Red Sox tickets

Most states and cities, including Washington D.C., have done the right thing by repealing their price ceilings on secondary ticket markets.

Dina Rudick Photo/Globe Staff/File

Most states and cities, including Washington D.C., have done the right thing by repealing their price ceilings on secondary ticket markets.

Take a guess at what Fenway bleacher seats cost in the summer of 1924. I’ll give you a hint — it’s a lot less than today. Why 1924? Because that was when Massachusetts made it illegal to resell a ticket for more than two dollars above its face value. Over the past 90 years, this policy, which was touted as protecting consumers, has turned roughly five million of them into criminals.

I just went to the Red Sox website, because I want to take my daughter, Emma, to a game this summer. The face value of bleacher seats is $40. Adding other fees jacks up the price to $51.50. There’s just one hitch, only single seats are available. So long father-daughter time.

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The team’s website is part of the primary market, because the Red Sox create the entertainment — or suffering, depending on the season. With a couple of keystrokes, I bounced over to SeatGeek.com, a part of the secondary market, where fans (brokers and speculators) resell tickets to one another. After a few more keystrokes, I found a pair of bleacher seats in row 8, selling for $75 per ticket, an offer that SeatGeek characterizes as a great deal.

I bought the tickets, which being $35 over face value blew through the two dollar cap on markups. To secure more father-daughter time, I abetted yet another criminal act and created another criminal, unless of course, the seller is a habitual criminal already.

What did you guess was the price of bleacher seats in 1924? The answer is 50 cents. Pavilion seats were 75 cents; grandstand seats, a dollar; and box seats, $1.65. The best seats at Symphony Hall cost $1 and at the Shubert Theatre, $2.50. A cap of two dollars probably seemed reasonable at the time, being roughly twice the face value of the most expensive seats in the city. At today’s prices, it’s ludicrous.

Capping the price of reselling tickets at two dollars over the face value didn’t create many criminals initially because it represented a higher cap in real prices and because the Red Sox weren’t doing so well, having a losing record, and finishing the season in sixth place.

Not so in Washington, D.C., where it was illegal in 1924 to resell tickets for even a penny over their face value. On the day before the first game of the 1924 World Series, pitting the Senators against the New York Giants, the Washington police arrested a bunch of resellers, including a 28-year-old who was caught selling a $3 ticket for $10. A journalist also reported that many fans sold tickets to scalpers at face value because they didn’t want to break the law. Scalpers, of course, were not so law-abiding.

I have written several papers about secondary ticket markets, including “Uncapping Ticket Markets,’’ which appeared Regulation Magazine. Using data on National Hockey League Games, provided by Stubhub.com, which also paid me for doing the research, I found that eliminating price ceilings caused large increases in the supply of seats and only small increases in (upper-deck) prices. People don’t like breaking the law, nor being labeled criminals, and hence, repealing the price ceilings increased supply because people felt better about reselling their tickets.

The Internet has made price caps on the resale of tickets impossible to enforce and, I believe, unnecessary. I just bought tickets at less than twice their face value, while one row back a much greedier seller is asking more than three times the face value, an offer that SeatGeek labels as a BAD deal, slapping it with a red dot, screaming at buyers to stay away from this guy.

The best way to help consumers in the secondary ticket markets is to encourage markets to be more competitive, thereby making transactions more transparent and sellers’ offers more comparable. Squeeze the profits, not the transactions out of the secondary market. Most states and cities, including Washington D.C., have done the right thing by repealing their price ceilings on secondary ticket markets, while retaining provisions such as making it illegal to resell tickets at the venue. Massachusetts should follow their lead because price caps fail to protect consumers, make secondary markets less efficient and label far too many of people as criminals.

David E. Harrington is professor of economics at Kenyon College in Ohio.
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