You might remember U2’s most recent album, Songs of Innocence, crashing harder than Bono off his bike in Central Park. Every band or artist eventually transitions from a creative force into a touring karaoke machine with legs. For U2, one of the most lucrative touring bands of any generation, the shift would be easier than most. It’s less abrupt and embarrassing than great athletes fading away, but similar in design; both latch onto the imagery of a final iconic moment, buying themselves a few extra years of adulation from fans unable to accept the past tense.
For star athletes, the end of a career means a rapid fall to earth (Allen Iverson’s impending Ice Cube 3-on-3 renaissance notwithstanding). They resurface 30 pounds heavier or lighter, trying to out-yuck other legends on a 10-man halftime crew. They ghost through the halls of memorabilia conventions. They turn into pitchmen for products, a beacon for middle-aged straight guys who need reassurance that it’s OK to use them without questioning their sexuality (“Guys, Tom wears these sensitive jammies too”).
But for artists? It’s like finally descending the stairs and doing the Triple Lindy into Scrooge McDuck’s vault of gold coins. There’s an entire second career in getting old! Fans age, get richer, and funnel money into the pockets of artists to tour on one condition: To hell with the new stuff, play me the soundtrack of my youth. Even in decline, the miracles of modern plastic surgery and computer-programmed backing tracks make any physical or musical deterioration on stage almost imperceptible. As fans, we don’t even want a new album. Just put us in the world’s closest thing to a time machine and play the goddamn hits. It was not unreasonable to think that Songs of Innocence was that moment for the great U2.
Last week, U2 emerged from a creative cocoon when it announced its 2017 tour. In homage to the 30th anniversary of the release of The Joshua Tree, the band will play its greatest album in its entirety and apparently in sequence. I’ve seen U2 perform dozens of times. I watched them wave a flag for humanity on live television in Paris after the attacks on the Bataclan. I trailed behind them just out of the spotlight’s reach as they took the stage to stream their first concert on YouTube to millions. I stood at the soundboard in Oakland–Alameda County Coliseum as the band preened for the royalty of Silicon Valley. I should be over it by now. But The Joshua Tree holds a piece of my heart; it is a masterpiece, as well as the playlist for my first game of spin the bottle. In the minutes after the tour announcement on January 5, I felt what so many other U2 fans did: I was going.
The January 9 press release said tickets were going on sale January 17, with presales starting on January 11. Plenty of time to plan which show I wanted to see, right? I opened a resale ticketing app just to check the exact tour schedule. Hundreds of tickets per show were already posted for sale.
Wait … what?
Eight hundred ninety-four were available in Seattle. 749 in Pittsburgh. 664 in Chicago. 600 in Tampa. 662 in Toronto. 567 in Boston. 589 in Houston. 575 in New York. Nearly all of the posted tickets were priced at more than $1,000. Ticketing apps are widely understood to be suboptimal, so I briefly forgot my past in the ticketing business and thought I had found a bug. I opened another resale app. 751 in Dallas. 750 in San Francisco. One supposed VIP ticket was priced as high as $29,000.
What. The. FUCK?
The current practice of speculative ticket selling on resale sites is a plague on the live events industry, rife with fraud and egregiously misleading advertising. Oh, and it completely and utterly screws fans. There are two parts to the live event business: the one you love that exhilarates you, and the seedy underbelly rotting underneath the surface. That dichotomy is exactly what The Joshua Tree is about. (U2’s original working title of the album, The Two Americas, was in reference to the greed seething underneath Reagan’s America and not the live event business, but trust me, they’re one and the same.) Let’s go track by track through The Joshua Tree to explain speculative ticket selling, and what can be done about it.
Track 1: “Where the Streets Have No Name”
Or these days, Where Some Brokers Have No Tickets (but try to sell them to you, anyway). This practice — known as “speculative” or “short” selling in the ticketing business — gets its name from the practice of shorting stocks in the financial markets. In the stock market, an individual borrows shares of stock from a brokerage firm for an established period of time, and sells them to an interested buyer at the high price. If and when the price of the stock falls, the individual buys back the shares at the lower price, returns the shares to the brokerage, and keeps the spread. It’s basically a way to legally bet against a company’s stock price. (Yes, really, Cousin Sal.)
In the ticketing business, short selling emulates shorting stocks, only with some not-so-subtle differences that make the concept go from “Hey, this is risky but a legitimate way to make money,” to “This is worse than following Simmons’s advice to bet on a third-string QB in a road playoff game, how do we as a free society even allow this crap?” Before tickets ever go on sale, a short seller posts a fake listing on a resale site at an inflated price. It looks just like any other ticket posted for sale, with no indication that it doesn’t actually exist. Incredibly, many of the top ticketing sites allow this practice — and as we’ll explore later, insure against it. The short seller merely makes up a seat location, then picks a price hoping it will be significantly higher than the actual market price for that ticket leading up to the event. He’s fishing for suckers. He’s fishing for you.
And when you go on a resale site and buy that fake listing, the short seller gets notified that his fake listing sold. He immediately goes looking on the open market for a ticket in a comparable or better location than the fake listing, but at a lower price. Guess who keeps the difference in money? (Hint: not you.)
Track 2: “I Still Haven’t Found What I’m Looking For”
Markets can do wild things, and even the most sophisticated speculators might fail to find the ticket that you thought you bought. This year’s thrilling Clemson-Alabama game is an example of where short selling can go painfully wrong. Tickets had been on sale for the national championship game months before we actually knew the opponents. How do short sellers pick a price for a game with no teams? A few sellers have sophisticated models, but the most obvious source of information is recent history. The average price paid for a ticket to the championship game in the past five years, according to StubHub data:
No, that’s not the collective income tax bill of the presidential Cabinet. It’s a trend! With absolutely zero regulation, unsophisticated short sellers may have assumed that, if they priced a short ticket at $1,000, they had a good chance of making $300-$400. But this year’s game was in Tampa, Florida, just over 500 miles from the Clemson and Alabama campuses. The game had buzz. Clemson fans believed. When actual tickets were distributed to season-ticket holders from each school — giving short sellers access to purchase real tickets from fans so they could fulfill their weak promise to you — demand for tickets far outstripped supply. Fans were going, not selling. The market was so hot that 24 hours before the game, the cheapest available ticket in the secondary market was over $4,000. Short sellers who sold tickets at $1,000 were now over $3,000 in the hole. Per ticket.
If you short a share of Apple stock, there are over 5 billion shares that can be borrowed. It’s highly regulated and digitally tracked by your brokerage house. You might lose money, but the damage stops with your bank account. No one else gets screwed. But when someone shorts a ticket to a big game or a high-demand U2 concert? Do the math. There are only about 60,000 tickets per show; most fans with tickets are already going. You assumed you made a great deal by buying early. Now you’re just waiting for your tickets to show up. You don’t realize that the seller is staring at a huge loss, can’t find what he’s looking for, and has zero accountability. Suddenly it’s not just the seller who’s getting squeezed, but you too (sorry).
Track 3: “With or Without You”
You are irrelevant to the short seller. Rather than suffer losses after the market has turned against them, a short seller might simply not buy and not deliver the tickets to you and disappear — it’s called “breaking their fill.” Some short sellers would rather shut down their businesses and start over than face their losses. And they can! They leverage their anonymity by getting new credit cards and launching new accounts. It’s like gambling, only you never have to pay your debts.
When this happens, most reputable resale sites will try to find alternative tickets or refund customers. Repeat: try. And if they fail, how do you refund a fan who flew across the country, took time off work and pulled kids out of school? Resale sites create an incentive structure that encourages short sellers to bail when the going gets tough. And there’s no remedy, no fix, no anything. At least not yet.
(As an aside, this ends the strongest three-song intro to an album since … ever. No one else had the balls to put arguably their three best songs ever in a row at the beginning of an album — not even U2. It was singer Kirsty MacColl who set the track order when the band couldn’t make sense of the proper sequence. Find me a better first three. You won’t.)
Track 4: “Bullet the Blue Sky”
You can hear faint traces of the character Bono would adapt for Achtung Baby in the spoken-word section of this song. His voice is somewhere between Donald Trump bragging to Billy Bush and Al Pacino growling the “Inches” speech in Any Given Sunday. It’s the second-creepiest spoken interlude to emerge from the ’80s, just behind David Lee Roth’s “Panama” rant right after he does a cartwheel over the bass player while wearing a T-shirt with his own face on it. But these lyrics hold the key:
The ticketing business is still rightly perceived as a bunch of red-faced guys in back rooms peeling off $100 bills, then slapping them down for tickets you have no chance at getting. That flies against the concept of commerce businesses, which, at the core, are ultimately about eliminating any friction in the purchase process. Amazon is famously fanatical about this — at any given moment the company has hundreds of experiments running on its website and apps, watching where you might get hung up, so it can improve the process and convince the next prospective customer to buy.
With live events, a collective distrust of the system has subtly changed consumer behavior. That’s negative friction — fans waiting later and later to buy tickets. Watch prices in the resale market as any game time approaches; fans now realize that those prices generally decline. They’re turning away from season tickets, ignoring traditional “on sales” and relying on the mercy of the secondary market. When you see an empty seat, that’s friction too — fans who threw up their hands and decided it wasn’t worth the trouble. Does anyone really believe that a friction-filled business with such a maligned reputation is healthy and sustainable for the next decade? No wonder Amazon has entered the market.
Track 5: “Running to Stand Still”
This is a perfect description of the legislation passed to make things better thus far. Remember when Congress passed and President Obama signed the Better Online Ticket Sales (BOTS) Act in late 2016, outlawing the use of software to circumvent the security and ticket limits on ticketing sites? Scrutiny on the industry had intensified after a report from the New York attorney general earlier in the year laid bare a host of problems in the business. Lin-Manuel Miranda had vocally advocated for the bill after seeing Hamilton tickets fall unendingly into the hands of brokers. And when someone messes with the guy who created Hamilton, you know there’s hell to pay.
Yet while the bill is unequivocally a step forward, it puts no real burden on ticketing sites to hold sellers accountable on their platforms. It’s pretty close to Robin Williams’s description of English police threats: “Stop, or I’ll say stop again!” Any short seller or broker can still buy tickets acquired using bots from multiple shadowy ticket exchanges, any of which essentially launder tickets thanks to provisions in existing legislation. By the time tickets are posted on resale sites, sellers can claim plausible deniability. We’ll get rid of bots right around the time O.J. finds the real killer.
Track 6: “Red Hill Mining Town”
Give me a break. I can’t do anything with the title of this song. (Neither can the band — they’ve never once played it live. It’s a big selling point for seeing this upcoming tour.)
Track 7: “In God’s Country”
This piece and others in 2016 advanced the narrative that — at least in deciding disciplinary measures — the NFL’s commissioner is god. While the light burned hot on discipline, the commissioner and his team quietly tended to another crisis that emerged from the Super Bowl in Arizona in 2015. That’s when a small handful of brokers controlled most of the supply for the game, squeezing short sellers and leaving hundreds of fans without tickets. It was a public fiasco that highlighted the NFL’s bewilderingly loose control over tickets to its marquee event. So the league took action. On the same day that U2 presales kicked off last week, the NFL announced that On Location Experiences (a company it partially owns) would sell ticket options to fans of the remaining playoff teams. A credit card and a refundable deposit guaranteed any fan seats to the Super Bowl if his or her team advanced.
If you’re a hater, you’d better grab something, because I’m about to duly praise the NFL: I thought that was a remarkable move, not just for its transparency but for its forward-looking effort to disrupt the status quo. On Location Experiences goes right at tackling the practice of short selling, while providing an alternative backed by an actual ticket instead of a hidden empty promise. Will everyone else follow suit with other iterations? How could we rethink the distribution of tickets if we were to gauge demand before putting tickets on sale? How else can we reclaim control of our inventory? And what if we actually told fans the truth?
Track 8: “Trip Through Your Wires”
Bono breaks out the harmonica here and asks the all-important question: “Angel or Devil?” That’s the choice facing the ticket broker community right now. In sports particularly, they play a vital role in the ecosystem of live entertainment — the most sophisticated teams have hired analytics people to squeeze enough margin out of brokers to make it a fair economic trade-off.
They use brokers as an insurance policy in case their team sucks and their fans lose interest. Many teams sell 50–60 percent of their season tickets to brokers to offload risk; if the team dramatically underperforms, they’re locking in revenue before the season in case no one wants to go. And if they make the playoffs, brokers generally make good upside reselling these tickets.
Buyers of companies have taken an interest in the ticket brokerage business; not only do they control inventory, but they have an increasingly scientific view of how to acquire and price inventory, as well as fairly dependable cash flows (with growing customer relationships). At the current rate at which they are being integrated into the ecosystem, it is possible to imagine brokers gaining real leverage over teams, artists, and ticket-selling sites to extract better economics in the future. Many financiers and operators continue to try to roll up some of the major ticket brokers into a larger industry force. Regardless, there is light at the end of the tunnel for established brokers to finally step into full-born legitimacy. So why wouldn’t they act swiftly to repair the damage being done by scrupulous short sellers? It’s time to declare the angels and the devils, then support legislation that curtails the activity.
Track 9: “One Tree Hill”
The old saying in Washington — before “drain the swamp,” of course — goes that “sunlight is the best disinfectant.” Like the America that U2 wrote about on The Joshua Tree, we are clearly a divided country — there will be few issues our politicians can agree on. But giving consumers fair and transparent access to tickets is an issue with near-universal voter support, and an easy cause for politicians looking for a bipartisan feather in their cap to safely adopt without fear of alienating their political bases.
Senators Jerry Moran (R) and Chuck Schumer (D) championed the most recent ticketing legislation, and a frustrated Senator Cory Booker noted of the ticketing process that “if it was open to public scrutiny, I’m certain behavior would change.” He’s right. An easy next step for legislators and the Federal Trade Commission? Just outlaw speculative ticket selling.
Track 10: “Exit”
It’s easy to forget how stripped down U2 once was. The live performance of “Exit” from Rattle and Hum captures a band that could have been mistaken for Pearl Jam playing “Rearviewmirror” five years later. U2’s live show has evolved into such a visual spectacle that it’s easy to forget the purity and fury of the rock band whose only prop was once just a spotlight. “Exit” is the appropriate mantra for those sites involved in the current practice of speculative ticket selling. Resale sites should either …
1. Exit the business of short selling completely.
2. Require any short sellers to put down a collateral financial deposit and show proof that they have contractual rights to exact seat locations in the future before allowing sellers to post tickets.
3. Create a dedicated “concierge service” section of their sites separate from their existing marketplace, where it’s clear that fans are making a speculative commitment to buy IF AND ONLY IF the broker can find a ticket, while also giving fans the option to withdraw that commitment if a ticket has not been procured by a certain date. Anything else tacitly continues an insidious practice.
Track 11: “Mothers of the Disappeared”
The night before the official “on sale,” the number of tickets posted on secondary sites for U2’s 2017 tour had nearly tripled. By noon on the day of the sale itself, more than 5,000 tickets were available for some shows. Those speculative tickets (easy to spot) have now disappeared into the crowd, blending in with the thousands of real tickets posted for each show. We all know how it plays out from there. And nobody will do anything about it.
U2’s tour will be a raving success because they are well managed, work with the largest promoter on earth, and can still channel much of that electric energy that gave birth to The Joshua Tree. But in every city, the band will have fans paying for the right to revel in their iconic album, only to watch that chance vanish at the 11th hour. For all of the progress we’ve made in the digital age, tickets remain pieces of paper; untraceable, untied to identity, basically gold bars with the serial number scratched off. It’s created exactly the kind of injustice, corporate antipathy, and technological stagnation that Bono and U2 have railed against.
Would U2 ever use their historic platform to change the ticket industry the way they once changed the face of music? Hey, if they’re actually going to play “Red Hill Mining Town,” anything’s possible.
Nathan Hubbard is an unpaid intern for The Ringer. He was previously CEO of Ticketmaster, head of commerce and global media for Twitter, and a touring singer-songwriter. His next project is currently in stealth.