January 17, 2008 Alfred Branch Jr.
A lawsuit and growing opposition from ticket brokers, highlight some of the potential concerns over Ticketmaster’s planned $265 million acquisition of secondary ticketer TicketsNow.
Unable to successfully compete against the rising tide of secondary ticket brokers, Ticketmaster decided to buy the second-largest ticket marketplace, behind StubHub!, in the industry. But, Ticketmaster’s relationship with brokers over the years has often been contentious at best, and many of those brokers work with TicketsNow and use the company’s proprietary software, that contains broker profiles, inventory and tracking information.
And it is precisely this close relationship between brokers and TicketsNow that has many brokers concerned and fearful of Ticketmaster’s intentions.
Ticket industry internet message boards have been buzzing with angry recriminations against the proposed deal, which must receive federal sign-off before the two can close on the purchase within the next few months.
“Ticketmaster will merge their ‘platinum seats’ with EI [Box Office, TicketsNow’s proprietary software program used by hundreds of ticket brokers], and slowly flood EI with fronts [prime seats] being sold directly from artists. So you will see a lot more of the Van Halen’s, where the first 20 rows are now listed on EI (and not StubHub/TND) and being sold directly from the artists. The artists will be shielded from the public scrutiny of scalping their own tickets more easily as average Joes won’t really know these seats are coming from Van Halen as opposed to just from some Mr. Bad Broker. I think Ticketmaaster’s long term plan (5 years) is to weed out brokers from EI, mainly by having all desirable seats sold by artists themselves. This transaction gives them that ability to do so,” said one broker on the ShowsOnSale.com message board, a comment indicative of many.
In a mass email today to hundreds of brokers, entitled “StubHub Values Your Business,” StubHub! President Chris Tsakalakis pleaded for brokers to continue to support his company, and parent company eBay and its eBay Tickets division, and laid out a litany of stranglehold business tactics performed by Ticketmaster over the years to stifle brokers. They include lobbying state governments to keep ticket resales illegal, and “using lawsuits as a weapon” against brokers and others. Both Ticketmaster and StubHub! remain embroiled in legal proceedings.
“TicketsNow and Ticketmaster’s TicketExchange are services that have similarly underachieved in the secondary ticket market,” Sean Pate, spokesperson for StubHub, told TicketNews. “This is due in large part to the model that is supported by both entities that allows only a select few to participate in the sale of the ticket. The open marketplace model of StubHub and eBay Tickets, where any ticket holder can list a ticket to sell, keeps us the most popular platforms for ticket resale.”
Continuing on the legal front, according to the South Florida Sun-Sentinel newspaper, the Miami Heat and its Basketball Properties Ltd. division is suing Miami-based Tickets of America and the Florida Association of Ticket Brokers (FATB) for allegedly resold premium tickets at AmericanAirlines Arena against the Heat’s policy requiring tickets only be resold through Ticketmaster’s TicketExchange program.
Alan Fein, the attorney representing the plaintiff, told the Sun-Sentinel that the organization is simply trying to protect its licenses and receive compensation that it believes it is owed. Prime seats not sold through TicketExchange cannot be charged a convenience fee.
“This is greed what the Heat is trying to do,” Tickets of America CEO Michael Lipman told the Sun-Sentinel. “They’re trying to double-dip on the secondary market. The real person who loses is the season ticket holder, who doesn’t even make back face value [on the ticket].”
“I think what’s really frightening from a consumer standpoint is that this is a broader pattern we’re seeing around the country by sports franchises as well as Ticketmaster to put a lock on the secondary market of ticket sales,” added Nick Iarossi, a lobbyist for the FATB, to the Sun-Sentinel.