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Cashing in on the 'aftermarket'

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The businessmen behind some of the rock world's biggest names have called for a levy on the concert ticket aftermarket, where people sell on tickets they have bought for profit or because they cannot go to a concert.

The live music industry in Britain is booming and several businesses have been set up specifically to serve the after market in tickets. Artists are now claiming they should share in revenue from those sales as well as the original sale.

Managers for artists including Radiohead, Robbie Williams, and Arctic Monkeys have backed the creation of the Release Rights Society (RRS), which would regulate secondary sales, label sites as complying with their standards and take a percentage of their earnings.

"It is unacceptable that not a penny of the estimated £200m in transactions generated by the resale of concert tickets in the UK is returned to the investors in the live music industry," said Marc Marot, chairman-elect of the proposed society. "Where this trade is fair to consumers, we propose to authorise it by agreeing a levy on all transactions."

The idea is the brainchild of the Music Managers' Forum and the society aims to come into being before the end of January 2008, with finalised plans for agreements with sales agencies in place by March.

The growth in ticket sales has led to a number of companies being set up to match buyers and sellers of tickets. They have vehemently opposed the idea of taxing the sale of tickets in the secondary market.

"This is just a bunch of pigs at the trough," Joe Cohen told The Guardian newspaper. Cohen is the chief executive of ticket sales company Seatwave. "They see some money and they want it. Our focus is to bring prices down in the secondary market and all this does is raise prices for consumers while adding no value at all."

"If I sell my Ford car, and have already paid for it, I don't have to pay Ford again when I sell it," chief executive of Viagogo Eric Baker told the same paper. "We don't understand the concept of taxing fans to buy tickets that have already been paid for."

The resale of tickets is not illegal, though e-commerce expert Struan Robertson of Pinsent Masons, the law firm behind OUT-LAW.COM, said companies can attempt to ban it.

"Event organisers often sell tickets with conditions that forbid resale. That prohibition is a contract term, but it's really difficult to enforce," he said. "It takes personalised tickets and proof of identity to stem the flow of second-hand tickets through your doors – and that's expensive as well as a hassle."

Robertson said promoters face a problem even if they do put notices on tickets banning their sale. "The problem for organisers is that generally it's not illegal to resell a ticket, so under the current law you can't stop sites like eBay from hosting auctions for your tickets, because eBay isn't a party to your contract," he said.

The Government has investigated the issue and a report from Parliament's Culture, Media and Sport select committee is expected shortly. It has asked for submissions on whether touting as a whole should be outlawed.

The touting of football tickets is against the law for security reasons. The Criminal Justice and Public Order Act banned the practice to preserve the integrity of fan segregation because of violence at football games. Parliament's consultation asked for views on whether that legislation should extend to music events.

Copyright © 2007, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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