Ticket Fees & The Litigation Nation
Fee Free Friday is back with a special "litigation nation" edition of the controversy surrounding ticket fees! This week the ticketing industry finds itself at odds, not with ticket buyers, but with itself. From Taylor Swift to Mike Tyson, complex lawsuits are flying in every direction - but what is the root cause of it all? Speaking of complexity, the weekly Wall of Woe contains a "war story" of a ticketing purchase process so complex it takes a 20 minute video to explain it. All that, plus a Fee Free Friday kindred spirit has re-launched its website to introduce "Big Tickets"...
So many lawsuits, so many ticket fees - it's enough to make Lionel Hutz scream!
At first it seemed to be just another facetious quip by TMZ ("Taylor Swift Sued Over Epic Canadian Hoedown Disaster!"). Then more respected news outlets began running the story using much more somber language. Two paragraphs of information began twenty. Columns became calls for "no quarter" for the ticketing industry as a whole.
The escalation from quip to "no quarter" centers around the announcement of a lawsuit filed against Taylor Swift for the whopping amount of $2,500,000.00 by a ticketing company in Canada.
The suit claims that Swift was scheduled to perform at an event that was eventually cancelled and tickets had to be refunded. The refund left the ticketing company in a financial position that it needed Swift to return her advance. Tony Lofaro of the Ottawa Citizen does an excellent job of explaining the legal complexities at hand:
Taylor Swift earned an advance fee of $2.5 million for agreeing to headline last year’s edition of the Capital Hoedown music festival, but months after the event’s cancellation, Swift is facing legal action for allegedly bailing on her contract.
Evo Merchant Services, a New York-based credit card payment processing company, filed claim in a New York court in August 2012 against FIRE USA Inc., a Florida-based company involved in handling ticket sales for Hoedown.
Via Evo’s services, FIRE had begun selling tickets in November 2011 for Hoedown, then scheduled for Aug. 10-12 2012 in Ottawa. But after festival organizer Denis Benoit cancelled the event in July 2012, thousands of ticket-holders began asking their credit card companies for refunds. The credit card companies charged those refunds to Evo, which sought to get the money back from FIRE. Evo alleges that FIRE refused to return the money, a violation of the terms of their contract, and is seeking over $1.8 million to cover its losses.
Lofaro goes onto chronicle the other participants in the drama and the respective counter-lawsuits being filed. None of the allegations made by any of the parties involved have been proven in court and no formal response has been made by Swift’s attorneys or management company.
TMZ, in its wonderfully flippant tone, published a summary of the situation that will have to suffice until more information is publicly available:
According to a new lawsuit filed in federal court in New York, Swift got all of her cash up front and the ticket company, which had to refund $1.8 million in tickets, thinks she should foot the bill ...since she never actually did anything. In fact, even if [Swift] were to pay, she would still walk with $700k in profit. But Taylor's rep tells TMZ the singer NEVER made a deal with the ticket company and has not yet seen the lawsuit.
Fee Free Friday will keep a close eye on any future developments, especially as it relates to the $1.8 million in ticket revenue. That is a substantial amount of money - what percentage was from ticket fees? Was the refund for the ticket face value alone, or were all the fees and service charges also refunded?
Another seven figure lawsuit filed this week, involving the ticketing industry, was in Los Angeles. Boxing legend Mike Tyson is making the claim that a subsidiary of ticketing industry giant Live Nation is “in breach of fiduciary duty.” The boxer is suing for damages to the tune of $5,000,000.00 according to ESPN:
Mike Tyson sued a financial services firm owned by Live Nation Entertainment on Wednesday, claiming one of its advisers embezzled more than $300,000 from the former heavyweight champ and cost him millions more in lost earnings. The lawsuit claims that Live Nation and its company SFX Financial Advisory Management Enterprises haven't given the boxer and his wife, Lakiha, a full accounting of their losses. The company returned some of the embezzled money but wanted the Tysons to sign a nondisclosure agreement, which they refused, the suit states.
When asked, a Live Nation spokesperson said “the company had not been served with the lawsuit and could not comment on it.”
Of interest to some is how the company returned some of the reportedly embezzled money to Tyson. The company asked Tyson and his wife to sign a non-disclosure agreement regarding the payment - which Tyson refused to sign.
Exactly why an event ticketing company has a financial advisory firm under its umbrella is still unclear, but the story is still unfolding.
Stand For The Fans in the Ticketing Industry
One of Fee Free Friday's kindred spirits is consumer advocate Jon Potter and the Fan Freedom Project. Fan Freedom serves as the tip of the spear for StubHub when it comes to creating a level playing field for consumers. This week the project re-launched its website with a great new look and new content.
Meet Big Tickets. You’re familiar with Big Oil and Big Tobacco. But you may not know that there’s a very small group of very big ticketing companies who control almost everything about the entertainment experience. We call them Big Tickets. If you've ever paid a “convenience fee,” a “processing charge,” or been told you need to provide two forms of ID and a DNA sample to get into an event, you've already met them.
Any entity or organization that helps ticket buyers is worth supporting and we congratulate Fan Freedom on their new website and all of their current efforts.
Wall of Woe - (shipper)War Stories
The weekly Wall of Woe is like a constant drumbeat to remind everyone in the ticketing industry of the plight of the ticket buyer Unreasonable ticket fees are the number one issue, of course, but running a close second is complexity. YouTube personality ShipperWar posted a 20-minute long video that documents the difficulty she encountered while trying to get tickets for Comic-Con. Her words are articulate, heartfelt and not an "angry tirade" in any way. If you work in the ticketing industry, ShipperWar's story is recommended viewing.
Purchase process complexity may make people miserable, but outrageous per-ticket fees make them down right furious...
Rather than navigating the minefield of litigation and angry ticket buyers, why not avoid it completely and just charge reasonable ticket fees? Or better yet, don't charge any ticket fees at all.
ThunderTix does not charge you per ticket fees for selling tickets online or at the box office. We encourage you to pass along that savings to the consumer and show them the long term vision of your business is tied directly to their satisfaction. Your patrons will love that you don’t add fees. It’s that simple. Lower ticket costs through no added fees translate into higher sales and greater patron satisfaction.