It’s been a couple of days, and I’m still confused about one central thing about Live Nation’s Friday announcement that it had settled its litigation with Songkick, purchasing remaining company assets from its one-time competitor. Why did it take so long to happen? Why after embarrassing dirty laundry was aired and key executives were let go?
Why less than a month before trial? Why not a year ago?
For those unaware, Songkick was a startup operating in the fan club ticketing world, with a music discovery application as well. It had merged with Crowdsurge in 2015 and worked itself into a decent niche, working with a number of top-tier acts, promising to distribute tickets in a fashion that avoided the dreaded scalpers and got the tickets into the hands of real fans.
They sued Live Nation and its Ticketmaster subsidiary two years ago, alleging abuse of market power in competing with the fledgling operation. Later, they added accusations of corporate espionage to the claims. Along the way, the bottom fell out – Songkick sold its music discovery app to WMG last summer, offered itself for sale to anyone who might take it over – including Live Nation – and then shut down its ticketing operation in October, leaving only the shell of a company intent on continuing its legal battle with what the New York Times referred to in its coverage of the settlement as “the colossus of the concert business.”
Dave Brooks of Billboard and Amplify Media dug up the financial details that Friday afternoon’s press release didn’t include: A filing with the SEC indicated that Live Nation paid the owners of what was left of Songkick $110 million to settle the case, plus an undisclosed sum to pick up the remaining pieces of the company’s intellectual property and patents.
By waiting the case out, Live Nation and Ticketmaster were subjected to a litany of negative headlines. That’s what makes this settlement such a head-scratcher for me, personally. If you were going to pay out nine figures, wouldn’t you rather have done so before the evidentiary process aired a good bit of dirty – and at times embarrassing – laundry?
Over the past few months, as the case chugged along through its pretrial motions, we learned that
- Live Nation CEO Michael Rapino had referred to his own company’s service fees as “not defendable”
- Top brass had referred to Adele and her management as “pigs” over their requested allocation of presale tickets
- In the same email chain, Jared Smith argued that “there is no algorithm to determine true fans… that’s crowdsurge BS”
Ticketmaster also lost a pair of high-level employees in the brouhaha, as Zeeshan Zaidi and Stephen Mead were confirmed to have been let go from the ticketing giant in the fall after a number of documents were dumped on the Songkick legal team. Zaidi was a Senior VP in charge of its fan club ticketing program, while Mead was Director of Client Relations & Artist Services, having moved from TicketWeb to Ticketmaster.
Those documents included evidence which supported the claims that Mead – a former Crowdsurge employee – had provided top Live Nation executives with access to the company’s systems, which they used to build out their own competing fan club program. One such document circulated among senior leadership at the company had what multiple sources told TicketNews were screenshots of actual Crowdsurge back-end website pages, containing current artist and company data accessed by Mead, who retained several working passwords after he left Crowdsurge.
Take it with a grain of salt that we don’t have a legal background, and also don’t know what Songkick brass had been hoping to get in terms of a settlement. But once the judge in the case ruled that emails submitted to evidence wouldn’t be sealed or redacted (which preceded the Rapino “not defendable” remarks, as well as everything else) – why didn’t Live Nation, which has been reporting monster numbers in each earnings report of late – just bite the bullet and pay up to avoid the negative press?
Obviously neither side will be willing to speak on the matter at this point. Songkick’s people will be bound by non-disclosure agreements, while Ticketmaster will want this all to be forgotten as soon as possible, in order to move forward with their steamroll of all other competition in the U.S. marketplace. So we’re just left to speculate.
From a business standpoint, we understand both Songkick and Live Nation’s reasons for settling the case. From a news standpoint, we have to admit we’re a little bummed we’re not going to see this one go to trial, because it would have been fascinating to see what kind of things would see the light of day in that California court room.
After all, Live Nation just coughed up at least $110 million to keep that from happening.
Last Updated on January 15, 2018