Does Ticketmaster Undercount Tickets Sold To Underpay?

from the concert-accounting dept

Over the years, we've noticed some questionable "accounting" practices in various parts of the entertainment industry. There's recording industry accounting, where labels make a ton of money and most musicians end up in debt. There's Hollywood accounting, where some of the most successful movies of all time are somehow declared "not profitable" so they can avoid paying actors any residuals. Then there is music performance rights accounting, where only the top 200 touring acts get to collect royalty money.

So what about ticket sales for events? Eric Goldman points us to an ongoing lawsuit, in which a producer of events, Club Escapade 2000, is suing Ticketmaster for severely undercounting ticket sales at an event. The event was a soccer match held at the University of Texas El Paso's stadium between two Mexico City soccer teams.
According to Plaintiff, the event was “extremely popular” — traffic was backed up on the highways and news outlets reported large crowds of twenty to forty thousand people attending... Much to Plaintiff’s surprise, Defendant reported that it had sold only 13,151 tickets.... These numbers seemed too low to Plaintiff, and Plaintiff began an investigation of Defendant’s audit reports... Plaintiff allegedly found that on the day before the event, March 24, 2009, Defendant reported that the number of tickets sold was 14,408... The very next day, though, the reported number of sales dropped to 11,098... According to Plaintiff, this was suspicious because there were no refunds or exchanges... Based on this suspicion, Plaintiff hired an expert in digital imaging who examined the video footage of the soccer match... The expert estimated that attendance was likely as high as 24,311.
Kinda makes you wonder if this is standard practice... and if this is why the legacy entertainment guys seem to assume that all fans want to screw them over. Perhaps they're just used to every one else they run into trying to screw them over.
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Filed Under: accounting, booking, concerts
Companies: ticketmaster


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  1. icon
    Danny (profile), 8 Dec 2011 @ 8:14am

    Counting ticket stubs

    The key to this is that TM's contract as ticket agent was with UTEP (owner of the stadium), and the promoter had a separate contract with UTEP. There was no contract between the promoter and TM.

    So, TM made all their audit and sales reports available to their client: UTEP; but apparently did not make their reports available to the promoter.

    It sounds like, from reading the report and the legal document, that TM stopped cooperating with the promoter when the promoter hired the video company to estimate attendance.

    Not stated, but I would be curious to know:
    1. Were blocks of tickets pre-printed for hard ticket sales by retail outlets?
    2. Did promoter employ agents to sell hard tickets in El Paso or in Mexico?
    3. If either of the above were true, how did TM account for these hard tickets in their system?
    4. If either of the above were true, how did the promoter account for hard tickets that were in its hands?
    5. Was the event reserved seating or general admission? If GA, did anyone check for counterfeit tickets among the ticket stubs (it is fairly easy to commit fraud at a GA event if you know what you are doing)?
    6. What, exactly, did the TM Audit and Sales reports say?

    The legal proceedings provided do not address any of these questions. Any good data audit would get at this information.

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