[0:11] So good morning, everyone. Thank you for joining us.
[0:16] I'm assembly member mily rozic chair of the consumer protection
[0:20] committee. I want to thank the members
[0:22] attending today's hearing. We have from the majority,
[0:29] assembly member torres and assembly member patrick carroll.
[0:33] brine miller, assembly member d'urso and assembly member
[0:38] jensen. I want to say thank you to my
[0:41] committee staff, michael sullivan, sky mathews and
[0:47] allison doer. And thank you to all our
[0:48] witnesses who will be joining us today to present testimony.
[0:51] we also have submitted testimony from the new york thruway
[0:56] authority, delaware north and apple green new york travel
[0:59] plazas. We will be posting all of the
[1:01] testimony that you'll hear from today, and the ones that have
[1:06] been submitted on the consumer web page at a later date for the
[1:10] sake of transparency and everyone having information.
[1:17] today, we are examining an issue that almost every new yorker has
[1:22] experienced, and one that increasingly effects families,
[1:25] visitors and every day consumers.
[1:27] the cost of food and beverages at publicly-funded facilities.
[1:33] whether you're taking your kids to a sporting event, state park,
[1:38] beach, traveling through an airport or stopping at a rest
[1:40] stop, the experience of purchasing food and drinks has
[1:44] become increasingly expensive. For many consumers, these aren't
[1:49] optional purchases in the traditional sense.
[1:53] at men venues, outside food and beverages are restricted or
[1:57] prohibited. Two years ago, the consumer
[1:59] protection committee passed legislation to allow for
[2:04] reusable water bottles at certain venues, and so that's
[2:08] just one step, tiny step, in trying to bring some balance
[2:13] there. That means families who want a
[2:16] snack for their kids or something to eat during a long
[2:20] events really have no realistic alternative but to purchase from
[2:24] the venue's concession operator. A bottle of water that costs a
[2:28] fraction of the price outside a stadium can cost several times
[2:32] as much inside. A family attending a game or
[2:36] spending the day at a facility can pay a significant premium
[2:39] simply because of where they happen to be.
[2:43] and that's widely reported, buffalo news did a big story at
[2:47] the start of the bill's season about how much it would cost a
[2:50] family of 4. And that was hundreds, if not
[2:54] thousands of dollars. So we have to ask ourselves,
[2:57] what the point does convenience become an exploitation of a
[3:01] captive consumer? And that brings us to one
[3:03] central concept, which we will examine today, called street
[3:08] pricing. Street micing is the -- pricing
[3:10] is the idea that consumers should be able to purchase goods
[3:14] at prices reasonably comparable to what they would pay outside
[3:17] of the venue. Rather than imposing substantial
[3:21] markups simply because the consumer has limited
[3:26] alternatives, venues and concession operators should
[3:27] consider pricing practices that reflect fairness, transparency,
[3:32] and today's buzzword, affordability.
[3:34] of course, we recognize that operating concessions come with
[3:39] real costs. Vendors have staffing expenses,
[3:42] labor costs, supply chains, rent, equipment and other
[3:46] operational considerations. We also recognize that
[3:48] concession agreements and business models vary
[3:52] significantly across venues, including in new york city where
[3:54] it's expensive to operate. Our goal today is not to dismiss
[3:58] those realities or suggest that every venue must operate under
[4:01] an identical model. We want to better understand how
[4:04] prices are determined, what drives up the markups, and
[4:08] whether there are reasonable standards or best practices
[4:12] across the industry to protect consumers without undermining
[4:15] the viability of concession operations.
[4:17] and that means looking at more than just a sticker price.
[4:20] it means examining whether prices are clearly disclosed,
[4:24] whether consumers have meaningful alternatives, and
[4:27] what kind of oversight mechanisms are in place to
[4:30] ensure fair practices. So today we'll hear from some
[4:34] stakeholders across the industry and from those who advocate on
[4:37] behalf of consumers. I wish that more of the stadiums
[4:41] and actual venues chose to be represented here today.
[4:45] many of them declined to comment or declined our invitation.
[4:49] I hope they are still watching. Ultimately, consumers should not
[4:53] have to choose between participating in a family
[4:57] outing, enjoying a public space or staying within their budget.
[5:01] fair pricing, transparency and consumer choice shouldn't be
[5:05] luxuries. They should be part of the
[5:07] experience new yorkers can expect when they visit our
[5:10] public facilities or a game. Thank you again to all the
[5:12] witnesses. Thank you to my colleagues who
[5:13] are here. I look forward to a productive
[5:17] discussion. A bit of housekeeping.
[5:20] we only have two panels today. So it should go fairly quickly.
[5:25] the first panel, each will have 5 minutes to present and then
[5:31] the chair and the anchor will each have 5 minutes of questions
[5:34] and everyone else will have 3 minutes.
[5:37] I'll just turn it over really quickly to my chair.
[5:43] mr. Miller. >> thank you for having this
[5:45] hearing today. This has been an issue
[5:50] throughout new york state, the country, all over the place.
[5:54] the consumers getting gouged at a lot of the venues or a lot of
[6:00] the, let's say, closed markets that are out there.
[6:03] and we are looking forward to having some testimony on those.
[6:08] thank you. >> okay, with that, our first
[6:13] panelist is christopher d'angelo, the chief deputy
[6:17] attorney general for economic justice from the office of the
[6:19] new york state attorney general. Take it away.
[6:25] >> good morning, everybody. Good morning chair rosic and
[6:28] committee members. My name is christopher d'angelo
[6:32] and I'm the chief deputy attorney general at the new york
[6:36] state attorney general's office. Thank you for the opportunity to
[6:38] testify on this very important topic.
[6:41] we are in an affordability crisis.
[6:43] and we know that consumers across the state are being
[6:48] gouged for everything from basic necessities to specialty items.
[6:52] and experiences that involve entertainment.
[6:54] attorney general james in our office is deeply concerned by
[6:57] reports of profiteering in stadiums, theaters and other
[7:00] places where consumers don't have ready alternatives to
[7:05] in-house sellers. Like you, we have read with
[7:09] concern about things like policy banning outside water bottles at
[7:15] worldcup games. In an attempt to force consumers
[7:19] to purchase extremely stadium watery versed after fierce
[7:23] public backlash. The saratoga performing arts
[7:26] center, which bans outside lawnchairs during outdoor live
[7:29] nation concerts, instead requiring rental of those
[7:35] lawnchairs via live nation for 15 dollars each.
[7:38] a policy that has been maintained despite a jury having
[7:42] found live nation to be in a legal monopoly based on a
[7:45] lawsuit brought by the new york attorney general and 33 other
[7:49] state attorney generals. Price inflation at major league
[7:53] baseball has gotten outrageous where an average fan who spends
[7:59] 5 dollars on a beer and hotdog in 1985, 15 dollars in today's
[8:04] money, now spends as much as 20 dollars on a single beer.
[8:07] when a consumer is at an entertainment venue, arena or
[8:12] sports stadium, the venue decides who will sell the food
[8:14] inside the venue and also decides whether the venue will
[8:19] allow outside food to be brought in.
[8:20] although there may be competition for the right to
[8:23] sell inside that venue, those decisions are made by the venues
[8:26] with their own bottom line and not the consumer's best interest
[8:29] as the key consideration. And once inside the vue, the
[8:34] consumer is captive. If the venue doesn't permit
[8:37] outside food, the consumer must purchase from the concession if
[8:41] they want something to eat or drink.
[8:43] the impact on families is particularly significant.
[8:46] we are long past the day where kids sized meals at ballparks
[8:51] were charged at kid-size the prices.
[8:54] given the control over the consumer's choices, is it any
[8:58] surprise that prices are double or triple what they would have
[9:01] been when consumers have easy access to goods sold by
[9:06] competitors or able to bring in their own food or drink?
[9:09] the existing enforcement tools are not targeted to these harms.
[9:12] the donly act, antitrust statute, applies to
[9:17] anticompetitive conduct, but about it can address concession
[9:23] pricing, not applicable to these general facts here.
[9:26] likewise, whether or not consumer protection laws like
[9:28] the fair business practice act would apply, would depend on the
[9:33] specific facts and circumstances of each case and not apply to
[9:38] specific pricing decisions within a particular venue.
[9:41] but, we think there are several common sense policy
[9:43] prescriptions to address the most egregious price increases.
[9:48] first, we encourage the legislature to require that
[9:52] stadiums and other entertainment venues allow consumers to bring
[9:54] in their own food and non alcoholic beverages.
[9:59] where venues don't have chairs, they should be allowed to bring
[10:01] their own. Directly allowing competition
[10:04] from outside the venue to compete with in-venue options is
[10:08] a straightforward way to increase consumer's options
[10:13] including low-priced outside venue options, while respecting
[10:17] the ability to provide unique offerings.
[10:19] it's also important public health measure.
[10:21] in the this era of extreme temperatures and climate change
[10:23] to ensure that there are min mam impediments to spectators
[10:29] receiving proper hydration. We also recognize that venues
[10:32] need the ability to impose restrictions on things brought
[10:36] from outside, to ensure they comply with liquor license
[10:39] conditions, but many venues have already managed to strike a
[10:42] balance between these concerns and allowing consumers to bring
[10:46] in their own materials. If these venues can allow
[10:49] consumers to bring their own food and drink already while
[10:52] addressing safety and compliance concerns, there is no reason why
[10:58] all major venues and stadiums should not allow consumers to do
[11:02] the same. Venues should not be allowed to
[11:04] artificially restrict competition for food and drink
[11:07] for no reason other than pumping up their profits.
[11:11] second, and more importantly, the legislature could build on
[11:15] the work of the port authority in bills like the one that's
[11:19] been proposed by the chair. The port authority currently has
[11:24] a restriction on airport concessions that is tied to
[11:29] street prices. They allow certain amount of
[11:33] surcharge on top of that. I think we would like to see
[11:36] that surcharge be more limited than the one that the port
[11:40] authority allows for, but if in the way the port authority
[11:44] structure is set up today f an airport seller has the same kind
[11:47] of store in new york or the new jersey area outside of the
[11:52] airport, think of starbuck's, then the price they charge at
[11:55] the airport has to be the same price that they charge outside.
[12:00] second, if the airport seller only operates in the airport,
[12:03] their prices are pegged to the average price regularly charged
[12:06] in the metro area by similar retailers for the same or
[12:14] similar area. This is similar to how price
[12:17] gouging works in abnormal market conditions and is measured under
[12:21] new york state law already. There are obviously cases in
[12:25] these rules so the port authority does allow some
[12:27] cushion for prices that are higher than the standards.
[12:31] such a cushion may be warranted but state should keep margin
[12:38] limited. The port authority rules are
[12:40] built on state law already. The state should now return the
[12:43] favor and build on these port authority rules for a statewide
[12:46] law that says very simply that whatever you charge inside one
[12:50] of these captive consumer spaces needs to be what you charge
[12:54] outside. In setting out these examples, I
[12:56] used the word, price, a lot. It wouldn't be okay for vendors
[13:01] to subject to these laws to get around them by setting the price
[13:06] at one level and then adding hidden fees or surcharges at the
[13:11] register. The port authority allows
[13:13] certain surcharges to be added on top of the amount that the
[13:18] threshold amount they allow above the street price.
[13:20] we would recommend that any state law doesn't allow for such
[13:25] surcharges. We also believe that it's high
[13:27] time for new york to adopt a comprehensive loophole-free, no
[13:32] hidden fees law for the entire state.
[13:34] we believe the new york city dcwp rules in this area that
[13:38] were recently adopted, are a great model to build on
[13:42] statewide. In crafting any policy in this
[13:45] area, it's helpful for us for enforcers and venues as parties,
[13:49] to have clear objective criteria against watch to compare a
[13:56] businesses's compliance and we recommend there be
[14:00] reasonably-sized penalties to ensure that violating the law is
[14:01] not just the cost of doing business.
[14:06] I thank the committee and the chair for providing the
[14:08] opportunity to share input on this topic.
[14:11] our office will continue to protect new yorkers whether they
[14:14] are at a ball game or concert or anywhere in the state.
[14:18] thank you. >> thank you very much.
[14:21] I'll start with a few questions. You mentioned the fair business
[14:26] act, which we did a few years ago as well through the
[14:32] committee, and antitrust laws. Talk us through how these
[14:36] situations are not price gouging.
[14:40] especially it's one thing at a venue but I'm thinking of the
[14:44] case where you're on the through way and you're captive audience
[14:47] to whatever is in that one building for the next 40 miles.
[14:52] like, you're a captive consumer in that situation.
[14:56] so how is that situation not price gouging?
[15:00] what is the interplay between the current price gouging laws
[15:04] on the books and situations like this?
[15:08] >> so price gouging ordinarily is a very limited concept and
[15:10] it's a limited concept in new york state law, which
[15:13] applies to abnormal disruptions. And those abnormal disruptions
[15:18] are defined in the statute as things like extreme weather
[15:23] events or war or some other market event that isn't the type
[15:26] of just an ordinary ball game or just being in a particular venue
[15:30] that exists in the world on any given day.
[15:34] so the price gouging laws is designed for those extreme
[15:37] unusual events, not for something that happens in the
[15:40] ordinary course of day-to-day business.
[15:42] we have just an industry where there is a market failure.
[15:45] and competition isn't working because the only place where
[15:49] there is competition is for the right to sell at the venue.
[15:54] and there, the venue is only making that decision on the
[15:58] basis of their own best interests and because they have
[16:01] monopoly power, they are the monopolist.
[16:04] the only ones that control that particular venue and that
[16:08] particular market. They are able to make decisions
[16:11] that raise prices to whatever the highest price is that a
[16:16] consumer will be willing to pay. Unfortunately, competition laws
[16:19] also are not a great fit for this either because there is
[16:24] nothing inherently illegal -- new york law and federal law
[16:27] doesn't make it illegal to be a monopolist or charge monopoly
[16:31] prices. What it makes it illegal to do
[16:32] is obtain that monopoly by doing something to thwart competition
[16:39] elsewhere. You're allowed to be a
[16:41] monopolist in the united states and in new york.
[16:43] you just can't become a mop or maintain that monopoly by doing
[16:48] something that harms another competitor.
[16:50] so those laws don't really fit here either.
[16:52] that doesn't take away from the fact we have a market failure
[16:54] because when you show up at this monopolist venue, you can't vote
[17:00] with your feet in the way that you would if you were walking
[17:04] down main street. And you can say, that coffee
[17:07] shop is charging me 5 bucks for a cup of coffee and that one is
[17:11] willing to charge me 3 dollars for a cup of coffee.
[17:14] I don't think the 5 dollar cup of coffee is worth the -- no
[17:18] quality benefit, so I'm going to choose the 3 dollar cup of
[17:21] coffee. Every consumer can make that
[17:23] decision for themselves. But when you have a venue where
[17:27] you can't vote with your feet and choose a different vendor,
[17:33] you lose that price competition that exists in the ordinary
[17:39] world. >> and then, I'm going to let my
[17:42] colleagues talk about the hidden fees portion of it, but, is
[17:51] there current things that your office does if someone brings a
[17:56] complaint about these situations?
[17:58] I guess in the case of the 15 dollar lawnchairs, is there
[18:02] enforcement that is currently happening within your office?
[18:06] what does that picture look like?
[18:09] >> I would say on the topic of the 15 dollar lawn chair, as you
[18:13] know, we have litigated a case to try to break up live nation's
[18:18] monopoly, because not only is each individual venue a
[18:21] monopolist, but live nation is a monopolist because they own 70%
[18:25] of the arenas, concert arenas in this country, and we're hoping
[18:30] that -- we've won on liability and hope and expect the judge
[18:36] will remedies break up live nation's illegal monopoly.
[18:40] we had mixed success in getting that kind of a remedy in these
[18:44] cases. So, we do have some enforcement
[18:46] that we can do under particular facts and circumstances.
[18:51] the laws we have on the books today are not well suited to
[18:54] address the problem of a particular venue that has
[18:57] vendors that are charging excessive prices in a situation
[19:02] that doesn't otherwise trigger the price gouging laws.
[19:05] >> but there is no effort to maybe like look at the actual
[19:09] contracts that the thruway authority signed with x vendor?
[19:14] is there any oversight in terms of that side of things?
[19:20] >> we're not in the position to review each individual contract.
[19:25] I think if we had reports that vendors were operating outside
[19:28] of the restrictions that the port authority does place on
[19:32] them, that would be something we would want to take a look at
[19:34] more closely. So if the surcharges, which
[19:38] again we view as too high already, if the surcharges and
[19:43] excess pricing that the port authority allows are still being
[19:47] exceeded, if there are reports of that, we would want to take a
[19:51] closer look. We have not received those types
[19:53] of complaints but we would welcome them for sure.
[19:58] >> thank you. It's great to see you.
[20:01] and I'm grateful we are talking about this topic.
[20:03] I was doing some research here and I saw that for a family of 4
[20:07] to go to an nfl game, the cost is 1,340 dollars, including the
[20:13] tickets, food, parking and everything else.
[20:15] so I think -- and that's the highest number also nhl game,
[20:21] 761 dollars. Et cetera.
[20:22] I'm curious to know, and I think the chairwoman raised this, but
[20:26] I'm of the view I think the state should be at the table
[20:29] when we're negotiating a stadium that is going to be partially
[20:32] funded by taxpayers to include pricing and what the fair
[20:36] pricing model should be for concessions.
[20:38] have you seen this in other states across the country and
[20:43] other pricing models that have worked?
[20:46] >> we have not seen this in other places around the country.
[20:49] but I think you're point is a good one.
[20:53] where there where it's public land or publicly-funded
[20:55] facilities or publicly-financed facilities, that makes this
[21:00] problem even more outrageous because you have the public who
[21:03] is helping to support the profitability of the venue in
[21:05] the first place to get it off the ground, and then they're
[21:08] coming back and taking advantage of the very consumers who are
[21:12] paying the taxes that are helping to fund it.
[21:15] I mean, spac is an outrageous example in my view.
[21:20] you have live nation who has the right -- they contracted with
[21:26] spac to be the promotor and venue operator for all their
[21:30] concerts. Which by the way, they don't
[21:32] have much of a choice because if they want live nation concerts
[21:35] at their venue, there is no other game in town.
[21:38] that's the problem with their monopoly.
[21:41] but, in that contract it then allows live nation to come in
[21:47] and extract monopoly prices from everyone who goes to that venue
[21:51] on public land. And I think a state law -- it
[21:56] won't solve live nation's monopoly problem and I hope the
[21:59] court does that when they consider remedies in this case,
[22:02] but it would help solve the pricing problem if the state
[22:05] were to impose limits on the price that is could be charged
[22:08] in these venues. And while I do think it's a
[22:12] particular problem at state facilities or state financed
[22:15] facilities, we don't see any reason why such a law needs to
[22:19] be limited to public facilities. This is a market failure.
[22:23] you could look at other situations -- I know a lot of
[22:26] people don't like price controls.
[22:28] we're not a fan of them in the general sense, but this is a
[22:32] particularly unusual economic situation where there is a very
[22:36] obvious market failure where competition doesn't work.
[22:40] you can't choose the other hotdog stand.
[22:44] you can't walk down the street and choose a different place to
[22:46] get your cup of coffee. It's all in one place.
[22:50] >> thank you. My time is up.
[22:55] appreciate it. >> thank you for your testimony.
[22:58] let's look that the a little differently here.
[23:01] could an imposed price cap result reduced portions or
[23:06] quality by the vendor? Because we're talking about a
[23:10] price gap, but we're not regulating what they sell for
[23:17] what markup or whatever they have on it.
[23:21] >> there is summery a potential evasion or portion problem.
[23:23] I think there are ways to address that.
[23:25] I think a properly-structured policy would require similar
[23:29] prices for similar goods. So, if I was getting a 16 ounce
[23:35] beer before and now I'm getting an 8 ounce beer, the price would
[23:40] have to be consistent with an 8 ounce beer outside of the
[23:44] stadium not 16 ounce beer. So portion sizes are reduced,
[23:48] then the compared or outside venue comparison would need to
[23:54] be adjusted to be the new portion size.
[23:57] that's one way to address that problem.
[23:59] is it perfect? Would venues or operators seek
[24:02] to cut corners? Potentially.
[24:07] but that's a problem that I think we could try to address
[24:09] through some sort of enforcement mechanism.
[24:12] >> who would be regulating all of this?
[24:15] who will be the agency that will go into the venues and show up
[24:21] at a yankees game and get the 8 ounce beer for 20 dollars and --
[24:27] >> sure. I mean that's what our office
[24:28] does. If you pass a law and you give
[24:31] the attorney general's office the right to enforce the law, we
[24:36] will -- either because you will go to the venue and say, I used
[24:40] to get a 16 ounce beer and now it's 8 ounces and I'm being
[24:44] charged the same price for this 8 ounce beer.
[24:46] you'll send a complaint to us, hopefully, and we get complaints
[24:51] regularly from consumers. And we act on those complaints
[24:54] and bring enforcement actions to hold businesses and individuals
[24:58] accountable when they break the law.
[24:59] and we would seek to do so here. We also, sometimes, do under
[25:04] cover investigations. I'll volunteer to go to the
[25:09] bill's game and -- we have actual investigators who do this
[25:12] sort of work and they will go and test whether or not the law
[25:17] is being followed. We've done that recently with
[25:20] our predictions market cases. You may have seen we had under
[25:24] cover investigators open up accounts on those prediction
[25:26] markets to test whether they are operating in new york and
[25:29] allowing people to engage in illegal gambling.
[25:32] similarly, we could do that here and test to do enforcement work.
[25:38] >> okay. So, in your opinion, how
[25:40] frequently should the price cap need to be re-evaluated for
[25:44] inflation? >> the beauty of a price cap
[25:47] that is tied to the similar prices that are charged -- I'm
[25:50] not suggesting we go out and decide how much the price of a
[25:53] beer is. I don't think you should do
[25:55] that. I don't think the people in the
[25:58] legislature are well equipped to do that.
[26:00] what you can do is say, if you're a venue and offering food
[26:05] and other services for sale, they have to be priced in a
[26:09] manner that is similar to the prices that are being offered in
[26:12] the immediate vicinity of the venue.
[26:14] so, that's what the port authority does today.
[26:17] they allow you to say prices that are similar to prices sold
[26:23] outside of the airport plus, you know, I think it's a 12% cap,
[26:28] maybe plus 3% surcharge. I forgot the number right at
[26:30] this moment. They keep increasing it.
[26:33] we would suggest that number needs to be much lower.
[26:36] but, in any case, the idea would be you don't have to tie it to
[26:42] inflation because it's naturally tied to inflation because as the
[26:47] prices outside of the venue go up, the prices inside would go
[26:50] up in a similar fashion. >> thank you.
[27:00] >> thank you, sir. Appreciate your testimony.
[27:03] so, just in regards to -- and follow-up on enforcement-wise.
[27:08] if these bills were to become law or something similar,
[27:12] through the ag's office number of investigators that could go
[27:16] out and invest gate these issues that are going on whether we're
[27:20] talking about sports stadiums, thruway stops.
[27:25] if a bill were to go through, there is a lot to be
[27:28] investigated, a lot to keep an eye on.
[27:30] do you know how many investigators that the ag's
[27:33] office have that could be out doing this?
[27:35] >> as several folks up here know, I will always ask for more
[27:41] resources for the attorney general's office if you're
[27:42] willing to provide them to us. I would say two things.
[27:46] one, we have dozens of investigators.
[27:48] is that enough to do the work that would be presented here?
[27:51] absolutely not. They also have of other things
[27:54] they are investigating on a regular base.
[27:56] but most of the enforcement work we do doesn't come out of their
[28:01] undercover investigative work. Most of the enforcement work we
[28:05] do comes because ordinary consumers complain to us and
[28:09] they identify problems and we enforce the law.
[28:12] and I would expect that that's how this would happen here
[28:15] predominantly as well. >> okay.
[28:16] and then speaking specifically about the spac issue, live
[28:21] nation, like the lawn chair issue.
[28:24] you said that has gone to court. Jury found them guilty of having
[28:29] a monopoly and now you're waiting for the next step for a
[28:33] judge to make some type of decision, correct?
[28:36] >> sure. The way this case worked was
[28:38] there was a trial on liability but they split off the remedies
[28:44] phase. So, we want a lie built -- won a
[28:48] liability that happened in the spring and the wheels of judges
[28:51] are slow at the federal level in particular.
[28:54] -- wheels of justice. We're waiting on decisions on
[28:58] post-trial briefs and we expect that we'll do a second trial
[29:03] just on remedies some time in the january-february time
[29:08] period. >> okay.
[29:08] and a case like that was brought by complaints?
[29:13] driven complaints by consumers? And that's not each a
[29:17] publicly-funded stadium. Spaz a 501(c)3 or something.
[29:24] so do you foresee, if a complaint-driven investigations
[29:27] are done through the ag's office when it comes to publicly-funded
[29:35] stadiums, rest areas, airports, the same issue when it comes to
[29:37] a remedy -- we're talking about a lot of port court.
[29:41] a lot of court situations or trials.
[29:45] what do you foresee with the investigation process and what
[29:47] you're seeing with the spac issue being timeline for
[29:51] remedies when it comes to that many issues?
[29:53] >> so I want to be clear. The live nation case is a bigger
[29:57] case than spac and not about -- the lawnchairs --
[30:00] >> I know it's not about spac specifically.
[30:04] >> to put it in context, that's a national case we brought where
[30:07] we led a group of 33 state attorneys general from around
[30:10] the country in one courtroom to bring a case on a national
[30:15] level. We worked with the department of
[30:20] justice but nay backed away at the final moment and decided
[30:22] they were not going to litigate that case and left us to do it
[30:25] on our own. But, in any case, that case is
[30:29] about live nation's monopoly across then use, across
[30:38] production, across ticketing as well.
[30:40] and it's a much, much bigger case.
[30:42] I wouldn't expect these cases to take that long at all.
[30:45] these are much more straightforward enforcement
[30:48] matters where we would have some evidence of whatever prices are
[30:52] being charged at the particular venue.
[30:55] we would do some analysis of what prices are being charged
[30:59] outside of the venue. And we would compare those two
[31:04] things and if they were not -- if the prices inside the venue
[31:08] were much higher than the prices outside of the venue for the
[31:13] same good or service, then I think that's a pretty simple
[31:16] complaint to bring to a judge and we would expect that to move
[31:20] much more quickly. The remedies there would be a
[31:23] combination of restitution and penalties.
[31:24] so we would try to get money back for the consumers who were
[31:28] over charged and we would also then seek penalties for that
[31:33] whatever violation, not just the cost of doing business for the
[31:38] company. >> thank you.
[31:42] >> thank you. So using the example, going back
[31:44] to the issue of monopoly. In a hypothetical world I create
[31:49] a professional sports team. Jensen's joker professional
[31:53] cricket and I build a tax payer-funded 2700 seat cricket
[31:59] arena. And then, there is businesses
[32:02] that sell concessions outside of the stadium.
[32:06] I contract with a third party vendor to provide concessions
[32:10] within my stadium. Paid for by taxpayers.
[32:14] then the third party company buys up either directly or to
[32:19] contract with the surrounding vendors, surrounding independent
[32:24] businesses. Would that constitute
[32:28] monopolistic action under what is current law state and
[32:32] federally? >> it would depend on a number
[32:37] of facts. It's possible that they have
[32:41] created a monopoly in that local market for a particular set of
[32:49] goods or services. Ordinarily mergers are evaluated
[32:55] as -- so you could evaluate it either -- presumably there are
[33:00] multiple venues outside of the stadium.
[33:03] there could be one or a dozen of them, assuming there is a dozen,
[33:07] if they bought one, presumably there are 11 others out there
[33:10] and that probably wouldn't constitute a monopoly or a
[33:19] significant reduction in competition.
[33:21] that's a consequence of the merger.
[33:25] I would not expect that to be a problem.
[33:26] if they bought up all 12 of them, that might be a problem.
[33:29] and that might be something we would take a look at as a
[33:32] competition. >> the reason I ask that
[33:33] question, is when you look at something like city field or
[33:37] yankeyy stadium, and then you look at the new high mark
[33:41] stadium and other facilities that are in other parts of the
[33:43] state, they're not in densely-commercial zones where
[33:47] you may not have within a one-mile radius similar items
[33:54] being sold. We talk about a loaded hotdog.
[33:57] you might not have an qualcomm pair so to set a price.
[34:05] if this were to become law, how would the ag's office determine
[34:12] whether or not the price being charged for one item is
[34:16] appropriate with the street price when there might not be a
[34:20] direct equivalent within the same geographic area.
[34:24] >> we deal with that type of issue.
[34:26] the price gouging law is a good example of that.
[34:28] it doesn't necessarily have to be the immediate vicinity.
[34:32] but, you would look to the outside world to try to find a
[34:36] relevant comparator. And it may not be perfect but
[34:39] you could make some judgments based on it.
[34:45] and so, maybe it's 5 miles away or 10 miles away and maybe the
[34:49] other side would argue that's not a relevant comparator
[34:52] because the market is different there.
[34:53] that's the type of thing you would work out in litigation as
[34:57] to whether or not -- if the law says it's a similar price to a
[35:01] similar good and service in a similar area, that's a fact
[35:06] question that would be worked out through the litigation
[35:08] process. And you probably have an expert
[35:10] on one side who would say, this area is economically similar for
[35:15] the following reasons. Or it's dissimilar but only
[35:18] dissimilar in a certain way that you should adjust the price by
[35:22] 5%. And that would make it an
[35:25] economically-relevant comparator.
[35:27] >> so your subject matter expertise, instead of doing a
[35:30] set distance metric, have broad language about similar economic
[35:37] conditions within a certain parameter rather than a strict
[35:41] distance marker in. >> correct.
[35:42] that's how the port authority general reg is drafted that way
[35:47] now. To say similar price in a
[35:49] similar area within the new york new jersey metropolitan area.
[35:53] so it doesn't limit it to just having to be an exact replica.
[35:57] if there is an exact one, for example, the starbuck's example,
[36:01] if there is a starbuck's store right outside of the venue and
[36:05] the starbuck's inside the venue and they are charging wildly
[36:08] different prices, that's an easy case.
[36:11] there may be a harder case that is a couple of steps removed
[36:14] from that. But that's the process we go
[36:17] through in investigating and putting up expert witnesses.
[36:21] >> is the ag's office responsible for the enforcement
[36:27] of mta? >> we are not other than
[36:29] indirectly. We have broad authority to
[36:32] enforce the law under executive law 6312, which allows us to
[36:36] bring an action for any repeated illegality.
[36:41] if we became aware that there were repeated violations of the
[36:46] obligations, we would probably -- something we would
[36:49] look into. I don't have facts in front of
[36:51] me today to suggest there are. Although a --
[36:55] >> my diet coke I bought a couple of months ago.
[37:00] thank you. >> thank you.
[37:07] >> good morning and thank you for coming here today.
[37:10] I appreciate this topic, certainly we have an
[37:14] affordability issue in these venues and they aren't escaping
[37:17] that issue. When I see the numbers for a
[37:20] family of 4, to go to a bill's game, not that I would josh --
[37:26] 2100 dollars. I have a family of 6 and it
[37:29] would be cost prohibitive. After we talk about sports
[37:33] venues and concert venues and possible broad way-type venues
[37:38] and airports. Are there any other arenas that
[37:41] you think that would be applicable here where people's
[37:44] feet can't do their shopping for them and they're stuck so they
[37:48] have to pay higher-than normal prices?
[37:51] >> I didn't catch the full list you said --
[37:54] >> we talked about sports arenas and broad way-type theatrical
[37:58] productions, music productions, airports.
[38:05] roadside rest stops. Any other venues you think would
[38:08] be applicable where we're talking about these price
[38:10] issues? >> those are the big categories
[38:11] we had in mind. I would say we can go back and
[38:15] take a closer look and make sure there is not some category that
[38:20] we're missing. But I don't have any others to
[38:23] mention. >> have you seen other states
[38:25] take charge on this issue? I know there are paperwork here
[38:29] referencing something in salt lake city and portland.
[38:31] are there other states that you see as taking the looed this
[38:35] issue? Or would we be the ones to take
[38:37] the lead on it? >> I think this would be a place
[38:39] where new york is leading. I'm not aware.
[38:41] we can go back and confirm that but my understanding is that
[38:45] this would be at the state level the first bill of its kind if it
[38:50] were to tackle this. Especially if it's broad enough
[38:53] to cover not just public venues but all venues.
[38:57] I think that would certainly be the first-of-its-kind.
[39:02] >> thank you. I think something needs to be
[39:05] done. And I would appreciate any input
[39:06] as we go along the process. >> thank you.
[39:11] >> I want to build on mr. Carroll's question here.
[39:15] I know some of us are old enough, most of us here are old
[39:21] enough to remember woodstock in rome.
[39:23] that was a 3-day event that ended spectacularly.
[39:29] are those type of events that's not on a -- it was on a
[39:39] public-owned air force base, or airport.
[39:42] but that's not a venue that's operating every season, every
[39:49] day. In those venues, the price
[39:52] gouging or whatever, is extreme for that event.
[39:56] but there is no -- in any of our discussions, would there be a
[40:03] requirement for the venue organizers to follow a certain
[40:08] type of regulation on the 10 mile radius and things like t
[40:15] that? >> indthe question.
[40:17] so it's not a venue that operates on some regular basis
[40:19] but it's a one-time -- [ multiple speakers ]
[40:23] >> one-time thing that is set up.
[40:28] woodstock set up on an old air force base.
[40:30] >> I would say that has not been the focus of our attention and
[40:35] testimony here. But I don't immediately see any
[40:37] reason why you couldn't cover that type of a festival.
[40:39] you have to get the definitions right and I don't think anyone
[40:44] wants to cover somebody's backyard wedding, but I think if
[40:49] you're otherwise -- if you get the definitions right --
[40:53] >> two 250,000 people were there too.
[40:55] >> I was being a little silly. But yes, I think your point is a
[41:00] good one and worth thinking about how how cover that kind of
[41:04] event because I would imagine the gouging is just as
[41:08] outrageous if not more so. >> thank you.
[41:11] >> I want to point out to mr. Miller, I don't think any
[41:15] of us remember the history of the first woodstock, maybe
[41:20] woodstock 99. Just quick question.
[41:25] I preface this with I'm not an attorney or lawyer.
[41:28] I don't make the laws. When we're dealing with a lot of
[41:32] these third party vendors that have concession agreements
[41:38] across the country or internationally, is there any
[41:40] concern that there could be a question -- one of the things
[41:44] whenever we talk about price caps or mandating certain
[41:47] ingredients or products, one of the points that always comes up
[41:51] on debate is this could be a violation of the commerce clause
[41:55] and impact interstate commerce. Because you have some of these
[41:59] companies even though they may be headquartered in new york,
[42:02] they do business across the country.
[42:04] is there a concern that passing this law could be in violation
[42:09] of federal law regarding interstate commerce?
[42:12] >> I think if you're not treating in-state businesses
[42:16] differently than out of state business businesses -- out of
[42:21] state businesses, I don't see the problem.
[42:24] our price gouging laws regulate pricing under abnormal market
[42:27] conditions. Those have survived challenges
[42:29] under the commerce clause. I don't want see any reason --
[42:33] as long as we're not regulating prices outside of the state or
[42:38] treating new york state businesses differently than
[42:42] in-state businesses, there shouldn't be a problem.
[42:45] >> thank you very much. I apologize mr. Miller.
[42:52] >> okay, thank you very much mr.panel number 2 is a hybrid.
[43:06] we have mr. Charles bell from consumer reports.
[43:13] brian hess, executive director of sports fans coalition.
[43:18] and I think virtually we have emily divito, the senior advisor
[43:22] for economic policy for groundwork collaborative.
[43:27] so again, you'll each have 5 minutes to walk us through your
[43:35] testimony. I'll remind my colleagues if
[43:38] you're asking emily a question, there is a little bit of a
[43:41] delay. Just make sure it's pointed to
[43:49] her. >> charles bell from consumer
[43:53] reports. I was going to suggest that
[43:55] emily go first because their organization issued a great
[44:00] report. >> emily would you like to go
[44:03] first? >> I'm happy to.
[44:03] thank you very much. Chair rozic and members of the
[44:10] committee, thank you for the opportunity to testify today.
[44:12] my name is emily divito and I'm the senior advisor for economic
[44:16] policy at groundwork collaborative.
[44:18] an economic policy think tank in washington, d.c.
[44:21] I am here to urge the committee to implement a strict street
[44:26] pricing standard, a straightforward, popular and
[44:29] proven fix for the price gouging at captive audiences face at
[44:35] publicly funded venues across new york.
[44:36] as the committee's hearing notice makes clear, new yorkers
[44:41] reply on venues and facilities like state parks, beaches,
[44:47] airports, state center for recreation, travel and community
[44:51] life. Once inside they may become a
[44:53] captive audience barred from bringing their own food and
[44:55] drink. They have no real alternative
[44:57] but to pay whatever price is posted.
[44:59] last year, my organization groundwork collaborative,
[45:02] released a report titled, shake down at the snack counter.
[45:06] outlining the economic case for implementing a straight pricing
[45:10] policy, one that insures vendors inside publicly funded venues
[45:15] like sports stadiums and airports, charge prices no
[45:18] higher than comparable goods sold just outside.
[45:21] some airports, including new york's 3 major ones already
[45:25] claim to have street pricing in place.
[45:29] under so-called street pricing plus policies that allow markups
[45:33] of 15% or more with little enforcement.
[45:38] recent travelers paid 7 dollars for a bottle of water, 36
[45:40] dollars for a burrito. And though some large sports
[45:47] stadiums have begun fan pricing men you items, none have
[45:51] policies in place. They are all a benefit from
[45:56] public since deese of some kind. New yorkers do not have to look
[45:58] far to see the scale of this problem.
[46:01] a family attending a rangers game could spend nearly worn00
[46:05] dollars on a beer, a soda and two specialty hotdogs -- 100
[46:12] dollars. At the buffalo bills new 2.2
[46:15] billion dollar high mark stadium, 850 million dollars of
[46:20] which funded by taxpayers, fans can expect to pay up to 14
[46:23] dollars for a beer, over 15 dollars for chicken fingers or a
[46:28] plain cheeseburger. A 2026 analysis found attending
[46:32] a bills game will run a family of 4 over 2100 dollars.
[46:37] the most expensive in the nfl and more than 700 dollars above
[46:42] the league average. Street pricing is not just fair,
[46:45] it's good business. Airports and portland and salt
[46:49] lake city reported travelers spending more money in shops
[46:54] since instituting straight street pricing.
[46:55] they find people spend more freely when they don't feel like
[47:00] they're being gouged. After atlanta's mercedes-benz
[47:03] stadium adopted a fan-first pricing model in 2017, cutting
[47:07] concession prices dramatically, they reported considerably
[47:11] higher vendor sales. 30% increase in over all
[47:15] transactions. A 20% increase in merchandise
[47:17] sales. And a 20% increase in the number
[47:20] of items per transaction. These policies are also popular.
[47:26] accident exclusive pole found that 73% of voters, including 78
[47:33] independence and 76% republicans support policies that restrict
[47:36] vendors for overcharging at venues receiving subsidies.
[47:41] establishing street pricing as a consistent standard for vendors
[47:44] across publicly funded venues and facilities statewide, this
[47:47] committee can help ensure that public investment translates
[47:51] into public benefit, not a captive market for price
[47:55] gouging. We would welcome the opportunity
[47:57] to work with the committee and its staff to tackle this
[48:00] important issue and I'm happy to answer any questions.
[48:10] >> thank you very much. Good morning.
[48:12] I'm programs director for consumer reports based in
[48:17] yonkers. We're a national organization
[48:18] and I worked in particular on issues related to junk fees,
[48:22] supported the enactment of ftc junk fees rule.
[48:26] I support the new york junk fee prevention act.
[48:29] supported a similar regulation in massachusetts now in effect,
[48:37] and I'm new to this issue but I was very impressed by the
[48:41] groundwork collaborative report, shake down at the snack counter.
[48:44] and I think it has a lot of important information.
[48:47] as consumers, we're disbursed in the marketplace.
[48:50] we don't have strong trade associations to advocate for
[48:53] new york consumers statewide. And people tend to experience
[48:58] this problem of high priced concessions one by one.
[49:00] I don't think they necessarily realize it's a very pervasive
[49:06] problem at stadiums throughout the country.
[49:08] so, I think also people experience it as a financial
[49:12] gotch ya, similar to adjourning fees.
[49:13] they feel like the merchant is trying to get something over on
[49:16] them. They know they can't vote with
[49:20] their feet. Why do the concessions charge
[49:23] higher prices? Because they can get away with
[49:26] it. And so I think people, as the
[49:30] groundwork poll indicates, it would be very enthusiastic about
[49:34] seeing the public sector step in and create some fairground rules
[49:37] for this space. So, I was really pleased to hear
[49:41] the remarks of the deputy attorney general and I think we
[49:44] would expect to work with their office in support of
[49:48] legislation. We haven't taken a position on
[49:50] the particular bill that's been introduced, but we think it
[49:54] creates an excellent platform for public debate and
[49:57] discussion. I think it would be helpful for
[49:59] a state agency or maybe a legislator to post prices at the
[50:04] stadiums throughout the state to get a sense of what the markups
[50:06] are. I think if consumers could see
[50:09] them clearly -- a lot of times the vendors are not posting on
[50:12] their website. The problem is hidden away from
[50:14] the public a little bit. And I don't think that
[50:17] necessarily it will be easy to enact the law because I expect
[50:20] that the interest that represent the stayed why ums and the
[50:24] venues and the concession ears will try to push back against
[50:28] this. So we want to have the consumers
[50:30] and the public on our side if you go forward.
[50:35] I was going to say that in the context of the larger
[50:39] affordability crisis, the median income in new york is 89,500.
[50:45] half income is above and half below.
[50:48] the united way reported that about 48% of new yorkers are
[50:52] living paycheck to paycheck. And don't have enough money to
[50:55] make ends meet. So that's 15% in poverty and 34%
[51:00] above poverty struggling to pay their bills.
[51:02] so consumers experience the affordability problem in the
[51:06] aggregates. Like we have all these other
[51:09] increasing bills for groceries, utilities, insurance and so
[51:11] forth, and this is one more thing that is piling on.
[51:15] I wanted to call attention to the junk fee question.
[51:21] the port authority of new york and new jersey has a 3% service
[51:24] charge that they tack on -- I think to pay for personnel at
[51:30] the airports and other facilities.
[51:31] but consumers will experience that as a partitioned price.
[51:34] they will pick out their food items from the men you and then
[51:37] they'll get that surcharge at the end of the transaction.
[51:40] that's an example of something we don't like and don't support.
[51:44] the ftc junk fee rule only applies to ticket pricing,
[51:47] hotels and short term rentals. Recently they were going to make
[51:50] it broader but they have not done that.
[51:52] high mark stadium has a similar 6% county surcharge that applies
[51:58] to parking, concessions, merchandise and food sold at the
[52:03] stadium. And there have been complaints
[52:05] in the media from consumers who feel like that's a lot to ask on
[52:08] top of these already high prices.
[52:11] so, for those reasons, we hope that the junk fee legislation
[52:15] could move forward. Another issue I wanted to
[52:19] highlight is, as the shake down at the snack counter mentions,
[52:23] some venues will permit people to bring in their own food and
[52:26] water. So that gives you some, a
[52:29] partial remedy to being locked into the stadium and not being
[52:33] able to vote with your feet. But a number of stadiums where
[52:36] drinking water and refilling stations don't work and in this
[52:41] case of high mark, there was a report about you can -- they
[52:45] have a refilling station but you're not permitted to bring a
[52:49] bottle into the stadium. You can buy a plastic water
[52:52] bottle and empty it out and refill it for whatever the going
[52:56] rate was, which I think was inflated, it was high.
[52:59] and I have been in state parks like jones beach before where
[53:03] drinking water fountains are not working on a 100 degree day and
[53:06] your only option is to buy a bottle of water at the
[53:10] concession stand. We should hold ourselves to a
[53:13] higher standard and make water and refilling stations widely
[53:17] available in the stadiums, arenas and also in state parks.
[53:22] so, thank you again for investigating the issue and we
[53:25] look forward to working with you.
[53:26] I think it's really important consumers really care about it.
[53:31] thank you for taking it up. >> thank you for the opportunity
[53:36] to speak today about concession pricing in new york.
[53:39] my name is brian hess, executive director of sports fans
[53:45] coalition that fights for the rights of fans.
[53:51] advocating for consumer protections and working towards
[53:54] pay equality, we represent the fan wherever public policy
[53:59] impacts the games we love. Almost everyone in the room has
[54:03] a memory of the kids face when they catch their first powell
[54:06] ball and for me it was the fourth inning that we would do
[54:09] when we went to a ball game. Those moments are how teams turn
[54:13] kids into lifelong fans. But for a growing number of
[54:17] new yorkers, that first game is not happening.
[54:20] the ticket isn't always what stops them.
[54:23] it's everything after the gate. A family of 4 spends close to
[54:26] 400 dollars for a game at yankee stadium.
[54:28] and that's a week's worth of groceries.
[54:32] even arthur blank, owner of the falcons admitted a two dollar
[54:37] hotdog shouldn't become 7 the moment you walk through
[54:39] security. In new york it has and the
[54:41] stadiums that the taxpayers built.
[54:43] new yorkers pay some of the highest concession prices in
[54:46] professional sports and paying them in the buildings their own
[54:48] tax dollars constructed. Almost every major league in
[54:52] new york benefits from public supports and the fans will
[54:55] always pay steep prices. Measured against nearby retail
[54:58] prices nearly every soda and hotdog we reviewed at the major
[55:03] venues would fail the fair concession pricing act.
[55:07] high mark stadium sells the most expensive hotdog for 11.63 even
[55:12] though taxpayers put 850 million towards the bill's noo you home.
[55:18] madison square garden receives 42 million in tax breaks and
[55:21] still charges ragers fans 16 dollars for a beer.
[55:25] 75% more than the median pint. Bar place center received 260
[55:29] million in direct city and 78 state funding but charged 8
[55:34] dollars for popcorn. If you want to enjoy the game
[55:36] with a beer, it costs nearly double what a local bar charges.
[55:41] ubs arena leases the land and spent 68 million on related
[55:47] projects. 15 dollars for a beer, 7 for a
[55:50] soda and 8 for a hotdog. Despite estimated 234 million
[55:53] dollars in public subsidies, city field charges 17.29 for a
[55:59] 24 ounce coarse light that costs 3.19 at the nearby 7-eleven.
[56:03] and yankee stadium where was 528 million in subsidies.
[56:11] a hotdog cost 7.39 once you go through the gate.
[56:15] how did it get this way? First it's impossible to ignore
[56:18] the impact monopolies and consolidated markets have on the
[56:22] live event ecosystem. Every major sports league enjoys
[56:29] antitrust exemption while fleecing fans.
[56:30] stadium and team owners use a consolidated food distribution
[56:34] chain which leads to higher prices and less options for fans
[56:37] and everyone's favorite monopoly, live nation ticket
[56:40] master, gets in on the action by only selling liquid death water
[56:44] at venues they operate because they have a equity steak in the
[56:47] brand. These companies take advantage
[56:49] of the fact that once a fan enter the arena, they become the
[56:53] perfect target for prices that would never survive competition
[56:57] on the outside. This lacks any justification.
[57:00] it simply represents greed. One fan said it best, when you
[57:03] need a law to stop someone from charging 18 dollars for a beer,
[57:07] that is not a pricing problem. That's a monopoly wearing a
[57:12] jersey. The good news is there is an
[57:14] easy solution that benefits fans and business.
[57:17] in 2017, the falcons voluntarily introduced the fan first pricing
[57:20] model at mercedes-benz to provide fans affordable options.
[57:26] two dollar hotdog, 5 dollar beer and fans were happier but
[57:31] business improved. Thousands more fans entered the
[57:33] stadium earlier, which reduced congestion and increased
[57:36] revenues for concession and merchandise sales.
[57:39] new yorkers deserve this fan first pricing policy.
[57:42] we encourage you to pass legislation that creates these
[57:46] menus as concession stands especially at the ones that
[57:49] receive taxpayer benefits. Thank you and I'm happy to
[57:52] answer any questions. >> thank you very much.
[57:54] my first question is, probably for you, brine, or for you,
[57:59] emily. Because you both mentioned the
[58:01] atlanta falcons. So, they have fan-first pricing
[58:08] allotted across the country. We heard about it.
[58:15] give us more context how they reached that decision.
[58:19] also why is it is that more than 10 years later no other stadium
[58:22] has followed suit? You say that it's so profitable
[58:27] in terms of additional sales. Yet we're not seeing any
[58:33] osmoseis in terms of or copycat situations in other stadiums.
[58:38] >> that's a great question, chair.
[58:41] I don't know why they voluntarily chose to do that.
[58:44] I know they received some public suns deese and it may have been
[58:48] a concession they were willing to make to -- subsidies -- I
[58:51] don't know for sure. But it seems it has really
[58:55] worked. And why it hasn't spread through
[58:56] the rest of the nfl at the very least s beyond me.
[59:02] I belive the stat was they increased sales by 16%, which
[59:06] would think that every team owner would love for an easy way
[59:09] to increase sales by that number and increasing fan satisfaction.
[59:13] it seems like a no-brainer. The only reason I suspect, like
[59:17] I said, greed. They like the 30 team owners,
[59:22] they like the status quo and they like what they can do.
[59:26] and they like that control. And they really need to be told
[59:29] from the lawmakers that they have to start doing this.
[59:31] >> and emily, my question is for you.
[59:35] have other states looked at street pricing?
[59:40] similarity pending legislation out there?
[59:41] are we the only ones? What's the lay of the land?
[59:48] >> so, brian is correct it has not taken off across stadiums
[59:54] nationwide. But, many more teams and sports
[59:58] venues adopted miniversions of what the falcons are doing.
[1:00:02] so they will have a fan menu on certain nights for games like
[1:00:08] tuesdays, or just a select number of concessions that are
[1:00:12] marked down. And so, I think you do see some
[1:00:17] areas moving in the right direction, but we would argue
[1:00:20] that as long as this is voluntary, it's not going to
[1:00:24] capture the full range of the problem.
[1:00:27] and in a lot of instances, stadiums still want to be able
[1:00:33] to charge high prices for those higher margin luxury or
[1:00:38] specialty items. And are willing to take the hit
[1:00:42] and seem like they're serving fans on some of the more popular
[1:00:48] hotdogs, coax, popcorn. And so, across airports there
[1:00:53] are street pricing policies in place.
[1:00:56] these are typically set by the local transit authorities and
[1:01:01] not legislation, per se. But, to my knowledge, there is
[1:01:06] no such legislation pending that would cover the range of venues
[1:01:12] that new york is considering cover.
[1:01:13] so I think this is a really great opportunity for new york
[1:01:17] to lead the charge and sort of set the tone of what should be
[1:01:21] expected across other areas. >> if I may add.
[1:01:27] there was a bill in colorado last year that did not go very
[1:01:32] far. It got a lot of opposition from
[1:01:33] the local venues, from concert halls, theaters, to the major
[1:01:39] sports teams. So that bill did not advance.
[1:01:42] to the is my hope it comes back. I would hope that similar bilges
[1:01:47] come back and we can work together on them.
[1:01:48] the other thing that I want to emphasize emily said about some
[1:01:53] teams adopting a fan-friendly menu on a specific night.
[1:01:56] one of the other ways they get around it is only putting in in
[1:02:01] one location in the stadium n some cases it's not each the
[1:02:04] location where the family is probably buying the affordable
[1:02:07] tickets. It's probably on level 1 when
[1:02:09] the person who needs that menu is probably on level 3 in the
[1:02:14] nose bleeds. So we need to make sure that any
[1:02:16] time, if we're doing this legislation, it needs to apply
[1:02:19] to the entire stadium and that the fan-friendly menus are
[1:02:23] available at every concession stand.
[1:02:26] >> I would agree. I was at city field, and they
[1:02:31] have affordable meals for children but I had to show the
[1:02:35] child that I was with. I couldn't leave them back at
[1:02:38] their seats. I had to actually proof of
[1:02:42] purchase it. Proof of child for purchase.
[1:02:51] >> thank you, everybody. Just a couple of quick
[1:02:54] questions. Really more how you foresee this
[1:02:57] and looking up some information. So when it comes to the atlanta
[1:03:01] falcons and the way they are running the concessions there,
[1:03:04] it seems that the falcons are really in charge of the
[1:03:09] concessions themselves. It's not an outside group.
[1:03:13] so what I see, and believe me, I dig it.
[1:03:20] the price is ridiculous. I'm not against doing this.
[1:03:23] I want to see what your thoughts are on how we can do this when
[1:03:27] it's really a lot of times it's outside concession companies
[1:03:30] that are coming in getting a contract, and then the owner of
[1:03:36] the stadium or whomever is running the stadium is stepping
[1:03:39] out saying, you're giving us x amount of dollars per year to
[1:03:43] run in our stadium. You charge what you can.
[1:03:46] so how do you foresee that being able to be done?
[1:03:52] because now you're only limiting what they can charge also.
[1:03:56] those concessions from coming in.
[1:03:57] you can say you can only charge 5 dollars for a hotdog but you
[1:04:01] also can't make me pay you $10 millions for the right to have
[1:04:04] the concessions in your stadium. Don't you foresee that there is
[1:04:07] issues that are going to go down the line when it comes to
[1:04:10] pricing on all levels? >> I wanted to bring out one
[1:04:16] point. Yes, I mean I think these
[1:04:18] contracts are complicated and they have a range of different
[1:04:22] business models. So one thing I learned about
[1:04:25] atlanta, in 2023, they received 9% of the food and concession
[1:04:35] sales,. And I think that goes to the
[1:04:36] point that a public entity or a quasi- government authority
[1:04:40] could structure a contract to either benefit -- they may be
[1:04:44] benefiting from a revenue share from inflated prices.
[1:04:46] and so, do we really want the public, the government, to be
[1:04:51] engaging and encouraging inflated prices versus using its
[1:04:56] influenzas purchases power to keep prices low?
[1:04:58] but other places -- using its influence -- the venue is
[1:05:06] running up the price and using it as a back-end profit center,
[1:05:09] I think this is a good question for mr. D'angelo.
[1:05:12] I think they probably have an idea of how they could approach
[1:05:17] this, because it gets into the weeds really quickly.
[1:05:19] >> and I would only add that it probably is a case-by-case
[1:05:23] basis. And if arthur blank has the
[1:05:25] significant control over the distribution that he does, he is
[1:05:30] doing something benevolent. If you look at our example with
[1:05:34] live nation, mr. D'angelo talked about lawnchairs.
[1:05:38] they only sell liquid death water at inflated price.
[1:05:42] you can't go and buyauk quafina or disani.
[1:05:48] so whomever has that control over concessions, in a
[1:05:52] consolidated market, which most are, then you would have the
[1:05:54] ability to just dictate price, which means you can dictate
[1:05:58] lower. If we are saying a hotdog is a
[1:06:01] hotdog, they are providing that at a profitable price for street
[1:06:05] cart vennors and for the local restaurant down the block.
[1:06:11] that hotdog should only cost what it ends up costing.
[1:06:14] anything above that is inflation for monopoly rents.
[1:06:21] >> thank you. Mr. Jensen.
[1:06:24] >> thank you. I have questions for miss a
[1:06:31] defrancisco. In the studies that groundwork
[1:06:33] collaborative have done -- diveto -- do we know how much on
[1:06:39] average a portion of the revenue that a professional sports
[1:06:43] franchise makes that can be attributed to concession sales?
[1:06:47] or the contracts they have with the third party vendors?
[1:06:53] they've given discretion to sell those concessions to?
[1:06:57] >> yes, so, we don't totally know because this information is
[1:07:02] not centralized in any one place.
[1:07:05] there was some legislation in this congress to do an ftc-led
[1:07:11] study on concession prices nationwide that would have
[1:07:16] provide someday clarity to those questions.
[1:07:18] but, my understanding is that on the whole, food tends to be a
[1:07:25] lower proportion of overall revenue for stadiums.
[1:07:29] much more comes from merchandise and a lot comes from ticket
[1:07:33] sales and all of the fees tacked on to those.
[1:07:38] but food is actually an area where it's been reported that
[1:07:46] stadiums can afford so to speak, to lower prices for consumers.
[1:07:51] we see that coming out of the atlanta experience and some of
[1:07:59] the other stadiums who have led the charge on reducing prices
[1:08:03] for concessions, have sort of come out and said, this is not a
[1:08:08] concern for our bottom line. And so I think that's suggestive
[1:08:14] of an however all good direction to trend.
[1:08:15] >> and then have you seen in the research that you've done -- I
[1:08:19] know the topic of the legislation that is being
[1:08:22] considered in this legislature and probably next year, is that
[1:08:27] it's using the government funding to build the stadium as
[1:08:32] the qualifier. But is there a difference
[1:08:36] between the pricing models you seen in facilities that are
[1:08:41] privately owned and then work into the concession agreements
[1:08:45] versus ones that are actually owned by the municipality or the
[1:08:49] state, county, city, what have you; and then lease the facility
[1:08:55] to the professional sports organization, and then either
[1:09:00] the municipality or franchise then has the third party come in
[1:09:05] as subcontractor to do concessions.
[1:09:08] >> yes, so we argue that what constitutes a public subsidy for
[1:09:15] scoping legislation like this should be as broad as possible.
[1:09:18] so, it's not always the case that a development project is
[1:09:23] receiving just like a check or a grant direct subsidy.
[1:09:28] but they often receive public benefit in the form of tax
[1:09:32] abbatements, other economic development incentives, tax free
[1:09:37] bond issuance, other public financing mechanisms.
[1:09:41] we argue that those should be defined and trigger policies
[1:09:48] like street pricing. So I think that captures a lot
[1:09:52] of the venues that would o. There face, seem to be entirely
[1:09:58] privately-held. It's often not the case that
[1:10:00] they have not received any kind of public subsidy.
[1:10:04] to your question about other sort of mechanisms, there has
[1:10:09] been some movement at the case-by-case basis for
[1:10:16] localities to include provisions like this into community benefit
[1:10:21] agreements as they negotiate redevelopment deals with teams
[1:10:26] and stadiums. I know that brian works a lot on
[1:10:29] that for the rfk stadium redevelopment deal in dc.
[1:10:34] many of those have been unsuccessful.
[1:10:36] but I think they have provided a good opportunity for action
[1:10:43] outside of the traditional legislative process.
[1:10:46] all of the same problems would remain.
[1:10:48] we would need strict enforcement but that is one model that we
[1:10:53] see in local areas really start to try to utilize.
[1:10:59] >> if it's okay -- if you don't mind.
[1:11:06] mr. Hess, so, emily talked about -- certainly because a lot
[1:11:16] of our major professional sports teams, they won't build new
[1:11:20] stadiums any time soon. So where is the chicago bears,
[1:11:23] could have negotiated that with east chicago in indiana or
[1:11:27] kansas city with the chiefs, or rfk with the commanders, what
[1:11:32] would be the opportunity, I guess, for communities to
[1:11:39] negotiate that in terms of new york development or
[1:11:42] renovations of existing stadiums?
[1:11:45] >> that's a great question. In a lot of cases, every 20
[1:11:49] years or so, the team comes knocking on the local city and
[1:11:53] the state legislators and say, it's time to get a new
[1:11:59] jumbotron, renovations. We need to be a state-of-the-art
[1:12:01] venue. And more often than not, the
[1:12:03] economic development that they promised has not even come close
[1:12:07] to what the tax dollars the first time ever were.
[1:12:11] and so now but they're going to leave.
[1:12:14] they say they threaten to leave and two of new york's teams are
[1:12:17] in new jersey. And they'll say, we're going to
[1:12:19] go across to the meadow lands next if you don't pay up and
[1:12:23] help us renovate this stadium. Those would be the levers of
[1:12:30] opportunity for the local governments to say, okay, fine,
[1:12:35] if you want 500 million dollars for whatever, then you need to
[1:12:39] create these fan-first concession pricing.
[1:12:41] frankly, I would want more in that list.
[1:12:44] I would want discounts on tickets for the taxpayers.
[1:12:47] I would want to make sure that every game that's played in
[1:12:50] there is available to local taxpayers for free, at least
[1:12:52] over the air on broadcast, if not through some kind of
[1:12:57] streaming platform. Because these stadiums keep
[1:12:59] building them. And then to your earlier
[1:13:04] question about the economics of it all, most of the money these
[1:13:07] teams make are in television contracts.
[1:13:10] concession sales while important and they grow year-over-year,
[1:13:13] are pocket change to most of these teams compared to the t
[1:13:17] t.v. Contract. They can afford to make it a
[1:13:21] fan-friendly experience and it will get more people in the
[1:13:23] door, which means the game will be more exciting and the
[1:13:25] television will be more exciting at home.
[1:13:27] >> so building on that, when you look at the yankees, the
[1:13:33] rangers, they are going to be beneficiaries from massive t.v.
[1:13:37] contracts. You look at minor professional
[1:13:40] sports, which we have a lot of in new york, they are not paying
[1:13:43] out the same amount in player contracts and player salaries,
[1:13:47] they also aren't getting revenue sharing and television
[1:13:51] contracts. So is there a concern that by
[1:13:55] instituting street pricing in lowering their ability to raise
[1:13:58] revenue through concessions, it could jeopardize the economic
[1:14:03] viability of minor professional sports in new york?
[1:14:07] >> I don't know what the economics of the minor leagues
[1:14:10] here are. And that will probably be a team
[1:14:12] by team question. I know from my work with
[1:14:16] mr. Bell from ticket sales that significantly marked up
[1:14:19] food and concession pricing is a main revenue generator for
[1:14:25] venues. And that's a significant part of
[1:14:27] their bottom line. They need those inflates prices
[1:14:30] to keep doors open. Frankly to me, there is a
[1:14:34] million other ways and part of that problem is also live nation
[1:14:37] and the monopoly that ag james is breaking up right now.
[1:14:42] so there is some questions around that.
[1:14:44] I would want to look at the specific teams and see, but
[1:14:48] nothing that the street pricing is preventing profit.
[1:14:53] and at the same time if you look at the falcons model as
[1:14:57] increasing sales by 16%, maybe now that minor league baseball
[1:15:01] team will attract more local fans to come out for family
[1:15:05] days. I mean, personally, I think
[1:15:07] minor league baseball is more enjoyable than major baseball,
[1:15:11] because the fan experience is more family-friendly
[1:15:15] environment. You might see that become more
[1:15:18] accessible. And that could actually improve
[1:15:20] the numbers for those teams. >> thank you.
[1:15:29] >> good morning. Great to see you all and
[1:15:31] familiar faces. Thank you for your comments on
[1:15:34] the new york adjourning fee prevention act.
[1:15:35] hopefully we can get that done. So, in terms of the -- let me
[1:15:42] backtrack. I found it interesting your
[1:15:45] comment on collecting information and data on how much
[1:15:47] the city is spending on concessions.
[1:15:50] are there any states that mandate any type of reporting on
[1:15:54] the revenue that's flowing in and out of the city from -- or
[1:15:59] state, from stadiums and concessions?
[1:16:01] how are you collecting this data?
[1:16:02] maybe the state can learn from that.
[1:16:07] >> I'm unaware. >> so, for airports, there is
[1:16:12] the clearest reporting structure, though it is somewhat
[1:16:16] spotty region to region. And the port authority for
[1:16:21] instance, has pretty good reports on the financial flows
[1:16:27] through airports. I'm not aware of any for
[1:16:30] stadiums. I don't believe it's mandated in
[1:16:33] any instance. There might be more information
[1:16:38] out there than I have been able to track.
[1:16:40] the problem is that it's an incredibly segmented market,
[1:16:46] obviously, so have some kind of repository for this information,
[1:16:51] even just basic numbers and answers to questions would be
[1:16:55] helpful for diagnosing this problem more acutely.
[1:16:59] but from the evidence we've been able to gather so far, I haven't
[1:17:03] seen anything that would provide what you're looking for.
[1:17:06] >> okay. So I guess despite the fact that
[1:17:07] the states are providing taxpayer benefit, we're
[1:17:12] partially funding and we get no reporting on what's going into
[1:17:15] the city or the state? Okay, that's helpful.
[1:17:19] the street price plus models, are there any concerns that some
[1:17:23] of the concession operators might try to gamify the system?
[1:17:27] so for example, a mcdodged hamburger versus a shake shack
[1:17:33] hamburger. How would this pricing model
[1:17:35] work? Are you concerned about it?
[1:17:38] and any language you think might be helpful to stop that.
[1:17:44] >> I do share -- why I like the falcons model is it limits the
[1:17:49] gameification that can happen. If I recall, I think they had
[1:17:53] chicken fingers with a scoop of caviar on top.
[1:17:57] how would you street price that? I guarantee you no venue around
[1:18:03] yankee stadium is selling that. So, you might end up seeing some
[1:18:07] of those kinds of weird games that vendors can play inside.
[1:18:11] if you have a menu that says, you need to serve a hotdog, a
[1:18:17] soda, a pretzel and a domestic beer for a basic menu for the
[1:18:23] street price. And you let the teams -- because
[1:18:25] some fans do like the innovative food specialty options.
[1:18:30] I have gone to mlb foodest and that's always a blast.
[1:18:34] so you don't want to get rid of that opportunity for fans if
[1:18:39] they're willing to pay inflated price.
[1:18:41] but to be able to have that option.
[1:18:43] I know this hotdog will be 3 bucks or this domestic beer will
[1:18:47] be 5 and that I think would be the right model.
[1:18:51] just require a certain base menu have those street price levels.
[1:19:01] >> thank you. >> thank you very much.
[1:19:07] this kolb includes today's hearing on fair concession
[1:19:10] pricing. -- this concludes -- thank you
[1:19:12] very much to my colleagues who were in attendance today and
[1:19:15] thanks to our witnesses.