A pair of nightclub owners in California will owe a pair of ticketing vendors as much as $738,000 after a pair of legal defeats in cases that show just how much promoters and venues profit on ticketing service fees consumers face in the live event space.

According to KQED, Ticketfly and Crowdtorch filed breach of contract lawsuits against Jason Perkins and partner Michael O’Connor over the ticketing at the New Parish and Brick & Mortar Music Hall venues, both in California’s San Francisco Bay area. The lawsuits alleged that the club owner pocketed hundreds of thousands of dollars in advances and bonuses, only to switch ticketing providers before the contracts ran their course.

Crowdtorch won a judgement in 2017 for $323,000, followed by a judge ruling in favor of Ticketfly earlier this year that could turn into as much as $400,000 in additional damages, which will be determined at a later date.

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According to news coverage, Perkins signed a five-year contract with Ticketfly in 2014 for both venues, a deal which netted him a $110,000 bonus. Five months later, Perkins signed a four-year deal with Crowdtorch that included a $150,000 signing bonus plus a $350,000 advance on ticket sales. Ticketfly sued shortly after. In 2016, Crowdtorch also sued after Perkins signed with yet another ticketing vendor.

In its lawsuit, Crowdtorch outlined Perkins pattern of “taking hundreds of thousands of dollars in signing bonuses from an online ticketing provider and then abandoning the provider without paying back any of the bonuses.”

Consumers wound up on the hook for most of cost that funded those bonuses.

To help pay for Perkins’ large bonus and advance, the contract included an increased service charge on tickets, passed along to fans at checkout. The $2 surcharge on a $10 ticket rose by 50 percent, to $3, costing fans a total of $13 before an additional 3 percent credit card fee. The club’s cut of the surcharge, meanwhile, rose by 500 percent to $1.50. (Service fees varied by face value, but their increase did not: a $50 ticket, for example, came with a Ticketfly service fee of $6, which with Crowdfire rose 50 percent to $9.)

As reporter Sam Lefebvre put it, “with the change in providers and the large signing bonus for himself, Perkins effectively increased the service fees paid by ticket buyers by as much as 50 percent.”

Perkins, who no longer owns one of the clubs involved with the lawsuit, is listed as having moved to Israel in the court filings.

Photo via KQED.org, credit Sam Lefebvre

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