'Hannah Montana' ticket debacle spotlights unscrupulous brokers

By Karyn Chenoweth Oct 15, 2007, 13:33 GMT

10/06/2007 - Miley Cyrus - Variety\'s Power of Youth event benefiting St. Jude Children\'s Hospital - The Globe Theater, Universal Studios Hollywood - Universal City, CA © Chris Hatcher / PR Photos

"Hannah Montana" is a hit Disney Channel show that stars 14-year-old Miley Cyrus and her country singer dad, Billy Ray Cyrus.  The series is about a teenage girl who's a typical high-schooler by day but has a secret pop-star alter ego by night.

CNN reports that Nielsen Media research says more than two-thirds of U.S. kids in the 6-14 age group watched the show in the third quarter of 2007.

Controversy has erupted when Disney announced a 54-city concert tour, starting October 18 in St. Louis, Missouri.  But the day tickets went on sale, average buyers found out they were shut out before any of them could purchase tickets.

CNN reports that ticket brokers "swooped up thousands of tickets within minutes of them becoming available online and shut out legitimate Hannah followers."

Desperate fans found they would have to pay brokers $350 to $2,000 for the $63 concert tickets.

Concert promoters saw the phenomenon happening all over the country.

"Absolutely every show sold out within the same amount of time," said Debra Rathwell of AEG Live, the company handling the concerts for Disney. "Whether you were in Moline or Omaha or New York or Los Angeles, it sold out in minutes."

Ticket brokers use the Web to buy sports and concert tickets ahead of real fans, creating an almost $2 billion secondary market.

"Up to 80 percent of inquiries of tickets come from these brokers," said Gary Bongiavanni, editor-in-chief of Pollstar, a weekly media magazine that tracks concerts.

"The average fan is competing with a pro whose mission is to score these tickets. Fans are at a disadvantage," Bongiavanni said.

The profits go to brokers, not the artists or promoters. CNN tried to contact several different ticket brokers that did not return phone calls or e-mails. But the National Association of Ticket Brokers did return calls.

"When a ticket is hot, people sell them," said general counsel Gary Adler.

CNN reports that five states: Michigan, North Carolina, Kentucky, Massachusetts and Rhode Island, limit brokering, according to the National Association of Ticket Brokers.

Regulations vary. For example, in Rhode Island, the cap on the amount of the increase is $3, or 10 percent above face value, whichever is greater.

Ticketmaster says online some brokers cheat to beat the system and the fans.

Ticketmaster has filed suit in U.S. Federal District Court in Los Angeles against a Pittsburgh, Pennsylvania, software company that it claims developed software for ticket brokers that illegally "allows them to cut in line", said Ticketmaster vice president Joe Freeman.

The software company, RMG Technologies, denies that allegation. It says the company should not be held accountable because Ticketmaster is getting paid for the tickets it sells.

"This may be the only time in history ... that any seller sued its customers for paying them too much money," the attorney for RMG Technologies wrote in court documents.

Promoters and artists have tried different methods to recoup lost revenue.

For the Hannah Montana tour, AEG Live and Ticketmaster held an auction for tickets in some cities. But the auction, AEG concedes, was not for the average fan.

The minimum bid for a single front-row seat at the Target Center in Minneapolis, Minnesota, was $2,605.

The Hannah Montana concert ticket debacle also has gotten the attention of law enforcement. Attorneys general in Arkansas and Missouri have filed a suit accusing ticket brokers of illegally reselling tickets to Montana's "Best of Both Worlds Tour."

"When you allow the hijacking of the market, it's literally the worst of both worlds. You get charged too much, and there's no access for the locals," said Jay Nixon, Missouri's attorney general.

Billy Ray Cyrus, Miley's dad, has commented on the issue.

"There is a law of supply and demand, and ... quite frankly, it's beyond our control. We put together a concert tour, and I was really excited about Miley going out and playing for the fans," he said. "That's what her tour is about. It's for the kids and all the families that are watching Hannah Montana."

A Disney representative told CNN, "It's really unfortunate, and there is nothing we can do to stop it. These inflated costs only benefit the brokers. We were very pleased to hear that various law enforcement agencies are beginning to look into these practices."

Experts say that unless ticket broker prices drop as concert dates approach, there will be sold-out arenas with empty seats.