Hartford Business Journal

www.HartfordBusiness.com June 19, 2017 • Hartford Business Journal 9 Businesses held largely harmless in regular session By Matt Pilon mpilon@HartfordBusiness.com W hile the legislature this session passed many bills, and left many more to rot on the House and Sen- ate floors, it's unclear which proposals could be revived as lawmakers continue to nego- tiate a two-year budget that will eventually need to be approved in special session. A bill to help Millstone Nuclear Power Sta- tion bolster its financial position is one propos- al not likely to be brought back to life, accord- ing to House Minority Leader Themis Klarides. Millstone failed in its quest to convince lawmakers to establish a new structure for utilities to purchase a large portion of the power it produces. Many argued the measure would lead to higher electricity prices. Tesla's third attempt at getting permission to sell its electric vehicles directly to Connect- icut consumers also failed to reach a vote in either chamber, despite perhaps the Califor- nia company's fiercest lobbying effort yet. The Connecticut Business and Industry Association (CBIA) said it was pleased with the passage of bills that will: • Make more small businesses eligible for angel investor investments • Require a ratepayer impact analysis for any future legislation that will increase electricity and gas bills • Allow voters to weigh in next year on creating a constitutional "lockbox" to protect transportation infrastructure funds from legislative raids • Create a small business hotline CBIA President Joe Brennan said there weren't any earth-shattering bills passed during the formal session. "It's more just the totality of the positive ones that passed and negative ones that didn't pass," Brennan said. Mandated paid family leave and a higher minimum wage were among the bills CBIA successfully lobbied against, Brennan said. One bill the business lobby supported but couldn't get through the legislature was unemployment compensation reform. House Bill 6461 sought to increase the solvency of the state's unemployment insur- ance fund, mainly through changing benefit calculations aimed at seasonal workers and prohibiting beneficiaries from receiving unemployment compensation while they are receiving severance from a former employer. The Office of Fiscal Analysis estimated the bill would have saved the fund $265.5 million over the next two years. Brennan said the main focus now is keeping a close eye on budget deliberations. "Obviously it's the biggest issue we had going into the year, and the fact it's unre- solved, it gets our attention," Brennan said. "We know how critical it is, particularly what's been going on in Connecticut over the past couple of years with subpar job growth and economic growth." "People do make location decisions if you push too hard on the revenue side," he added, echoing businesses' opposition to further tax increases. n — making it easier to transfer or sell tickets to others. Connecticut now joins New York, which passed a paperless ticketing ban in 2011, and Virginia, which did so this year. It's one of a number of business-facing bills that survived — or just as importantly for indus- try lobbies, died — in the Connecticut legisla- tive session that concluded earlier this month, without passage of a two-year budget. Lawmakers are expected to reconvene in special session this summer to hash out a spending plan, a process made more difficult by a projected $5 billion deficit. Ticketmaster and various major musi- cal acts, sports teams and others have used paperless ticketing over the past eight years to combat price markups charged by resellers and to retain more control over the resale process. In some cases, companies are involved in both primary and secondary ticket sales. For example, Ticketmaster — a dominant primary seller — entered the secondary mar- ket in 2008 through its $265 million acquisi- tion of TicketsNow. Paperless ticketing systems often require ticket purchasers to swipe their credit card at the venue to gain entry. That places an undue burden on consumers who want or need to sell or give a ticket to someone else, propo- nents of the new law argue. "[Paperless ticketing] meant the brokers not being able to sell as many tickets as they otherwise could in Connecticut," said Jay Mullarkey, TicketNetwork's vice president of broker and community relations. "[The new law] will help us sell more tickets." More transactions will mean revenue for TicketNetwork, which doesn't own the tick- ets it sells on its exchange, but receives a cut of each sale. The company says it employs more than 500 people in the state. StubHub, a major U.S. ticket reseller, has operations in East Granby, but recently announced it was closing that outpost and moving the 200 or so jobs to Salt Lake City, Utah. StubHub says it has 540,000 Connecticut users who sell or buy tickets online. Under the state's new law, private venues, performers and their primary ticket selling part- ners must offer consumers a fully transferable ticket option, such as printable tickets or mailed paper tickets. The law also allows venues with fewer than 3,500 seats to opt out of the new requirement. It also doesn't apply to events at public colleges. It's unclear exactly how prevalent paper- less ticket sales have been, and how often event attendees get turned away as a result of paperless restrictions. But it's clear the technology has become more popular and has been embraced by per- formers including Bruce Springsteen, Iron Maiden and Adele, as well as the New York Yankees and Cleveland Cavaliers. In a Department of Consumer Protection report released early this year, DCP said it canvassed 30 venues in the state and found that paperless ticketing is used infrequently. However, the report cites a 2015 Kid Rock concert in the state in which the perform- er demanded that premium seats be sold through ticketless systems. In its successful lobbying effort, TicketNet- work, which works with approximately 1,400 brokers, and other supporters of what is now Public Act 17-28, focused on a consumer-rights argument. They said paperless ticketing can cause headaches for consumers who may face hurdles trying to offload tickets, especially at the last minute. "They were trying to stop people from reselling tickets, but they don't realize they hurt a lot of consumers," said Evan Honey- man, TicketNetwork's director of business development. "This takes control and puts it back in the consumers' hands." Venues unhappy While ticket exchanges are happy about the new law, a wide rift remains between them and area entertainment venues. A number of Connecticut venues spoke out strongly against the paperless ticket- ing ban, arguing it mainly serves to pad the revenues of online exchanges and that any frustrations consumers face are largely exaggerated. "Does anyone believe the live entertain- ment industry enacts measures simply to frustrate the people with whom we regularly do business?" Thomas Ferrugia, director of governmental affairs at the Broadway League, which represents more than 20 Con- necticut performing-arts theaters, wrote in testimony against the proposal earlier this year. "However, the broker lobby makes this fallacious accusation to create the impres- sion that they are acting in the best interests of our patrons when, of course, nothing could be further from the truth." Venues' main resistance is that ticket resell- ing often leads to marked-up prices. They also argue that resellers use "unscrupulous meth- ods," such as building websites that mimic the look of a particular venue and advertising avail- able tickets before they go on sale. Use of bots that rapidly reserve tickets during pre-sales also remains a problem in some instances, though Congress outlawed the practice last year. Connecticut considered paperless restric- tions in 2011, which led to testy exchanges on both sides. During those deliberations, Ticket- Network filed a lawsuit against Bushnell CEO David Fay alleging that he slandered the com- pany during public testimony. The suit dragged on for about three years before it was settled. Meantime, New York restricted paperless ticketing in 2011, but its current Attorney General Eric Schneiderman issued a report early last year recommending that the ban be lifted because it was giving resellers an easi- er way to move tickets for marked-up prices. Several major acts canceled appearances in New York because of its paperless-ticket- ing ban, including singer-songwriter Yusuf Islam, formerly known as Cat Stevens. It's unclear how musical acts might respond to Connecticut's new law. TicketNetwork's Honeyman said he doesn't think there will be major pushback in the state. "If anything, [bands] should be happier their fans don't have to jump through hoops to get to their events," he said. Ferrugia said many venues are investing in cybersecurity to detect reseller activity with the aim of canceling tickets they purchase. Venues, he said, are trying to please as many customers as possible — by offering the lowest-priced tickets — because they want repeat business. If a customer buys a marked-up ticket on the secondary market, it can create negative feelings toward a venue. And "minor incon- veniences" that can be created by paperless ticketing are worth it, he argued. Transferring a ticket through a primary sell- er's proprietary system is "a very small price to pay for the often outrageous unscrupulous practices that we see in the secondary market and how many people are being taken advan- tage of by ticket brokers," Ferrugia said. n from page 1 Resellers, venues at odds over new law A view of TicketNetwork's website, which allows users to buy and sell tickets to concerts, sporting and other events.

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