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Ticketmaster vs. Scalpers: Who's Worse?

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The ticket giant says it protects consumers, but it's the biggest scalper of all.

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Four California men have been indicted for hiring a Bulgarian hacker to circumvent online security technology intended to prevent scalping utilized by Ticketmaster (LYV), Tickets.com, Telecharge, and Major League Baseball.

The group was able to buy large blocks of tickets which were then resold to brokers, who offered them on the secondary market at inflated prices, prosecutors said, in a 43-count federal indictment.

"The public thought it had a fair shot at getting tickets to these events, but what the public didn't know was that the defendants had cheated them out of that opportunity," said US Attorney Paul Fishman.

"It's disgraceful that this situation went on for as long as it did, depriving fans of seeing performers whom they support," said Camille DeSantis, who has "repeatedly been shut out of online sales for Ringo Starr performances," according to the New York Daily News.

But, what many fans don't realize is that the major ticketing services are equally, if not more, to blame for unreasonably high prices.

Ticketmaster, which recently merged with Live Nation and settled charges of deceptive sales practices with the FTC just last month, set out to "protect" the public from scalpers on Miley Cyrus's 2009 North American tour, sponsored by Walmart (WMT), by selling paperless tickets.

Concertgoers were required to buy tickets online (for $39.50 plus fees and convenience charges), which would be handed over at the box office after their identities were confirmed by showing a driver's license and credit card -- which the majority of Miley Cyrus's demographic likely do not have.

However, once these seats sold out -- and weren't available on the secondary market due to the paperless concept -- the only way to gain access to the shows was through Ticketmaster's own scalping service, called I Love All Access.

I Love All Access offered prime seats not available to those buying tickets on the Ticketmaster.com website for $295 each. The I Love All Access website makes no mention of the fact that it is part of Miley Cyrus's management company, Front Line, which was acquired by Ticketmaster last year and is run by Irving Azoff, who does double-duty as Ticketmaster's CEO.

During a 1998 speech at the Rock and Roll Hall of Fame, Don Henley of the Eagles said of Azoff, "He may be Satan, but he's our Satan."

"Their" Satan is helping the Eagles profit quite handsomely on their current tour, as well.

Tickets to see the band at the MGM Mirage's (MGM) MGM Grand in Las Vegas start at $55. If you want to actually see the band without binoculars, be prepared to spend $895 through I Love All Access.

Amazingly, $895 seems like a steal compared to what I Love All Access was charging for a ticket to see Van Halen at Madison Square Garden, part of the Cablevision (CVC) empire, in 2008. A "Five Star" package, which included a goodie bag, a brief backstage tour (without any interaction with the band), and a seat within the first nine rows, went for $1,000.

Tickets that mere mortals could afford, for the very same show, started at $49.50.

And on it goes. Ringo Starr will be performing at Radio City Music Hall (another Cablevision property) this July, but good luck trying to score a decent seat for the $84.50 face value -- they're sold out. You can get into the venue by laying out $244.50 for a "premium" seat, available through Ticketmaster.

Or, you can log on to eBay's (EBAY) StubHub and pick one up for $69.50.

Thanks, Ticketmaster, for being out there protecting the average concertgoer.

And StubHub -- you should be ashamed of yourself. Selling tickets at prices people can afford is no way to run a business.
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