Legal Issues

by Mike Masnick


Filed Under:
accounting, booking, concerts

Companies:
ticketmaster



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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  1. icon
    Danny (profile), 8 Dec 2011 @ 8:26am

    Re: Re: Auditing is possible

    Yeah. TM was slow to move to the Internet in the 1990s and several small firms emerged as online competition. I've read that TM sells less than half of all eTickets today, but I can't confirm that ratio. It really depends on how you define the boundaries of the market. TM isn't interested in doing charity event sales. I was the consultant a few years back to a small museum that was looking to contract for a ticketing system. We shopped about six of them; TM's bid came in by far the highest of the six.

    I am pretty sure that many of the MLB clubs that used to be with TM have moved away to a different system in recent years.

    Aside: I recall a conversation I had with the founder of Ticketmaster in 1995 when I tried to explain to him what this new WWW thing was and why he should set up a channel for online sales. His response to me was: "I already pay overhead for retail outlet sales and telephone sales; if I spend the money to build an infrastructure for WWW sales I will increase my costs, but I won't sell any additional tickets."

    Turns out he was wrong.

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