Slamming The Stable Door

The Hungarian monopolies authority seems to have slammed the stable door after the horse has bolted by ruling that a deal once operated between Lazlo Hegedus’s Multimedia, Serge Grimaux’s Ticketpro and the Budapest Sports Stadium was in breach of national and European laws.

Zoltan Bara, one of the members of the Gazdasági Versenyhivatal (GVH) – or Economic Competition Office – that gave the October 17 decision, told Pollstar that it’s still an important judgment as it sends a message to the music industry that says these methods of doing business won’t be tolerated.

The authority ruled that the deal between the state-owned 13,000-capacity venue and Ticketpro was outside of Hungarian law and also in breach of Articles 81 and 82 of the European Community Treaty. It said the exclusivity clause it contained disadvantaged other promoters and opened up the possibility of ticket price fixing, which would prove to the disadvantage of the buyer.

The GVH said an agreement between the venue and Multimedia – which entitles the promoter to a free hire after it has paid for 10 shows within the same year – was also unfair to other promoters, but Hegedus said he’s always been under the impression that all live event organisers could take advantage of the same discounts.

“I didn’t think it was exclusive to us, except in the sense that we’re the only company that does that number of shows in the stadium each year,” he explained.

In the last 12 months, those shows have included Anastacia, Rammstein, Seal, Queen + Paul Rodgers, Mark Knopfler, Avril Lavigne, Duran Duran, Green Day, Marilyn Manson, and Phil Collins.

Hegedus said he wasn’t aware that the ticketing agreement, which says all sales go through Ticketpro, was unlawful because other promoters, venues and ticketing companies had worked similar deals in the past.

Hegedus denied that it had been terminated earlier in the year because it was evident that the case would reach the competition authority. He said the deal had originally been made with former venue managers the Paris-based Bouygues Group, but stopped when the French company pulled out of the old Eastern bloc market because it wasn’t sufficiently profitable.

The commission decided not to impose a fine because the deal is no longer in place and, according to Bara, it was of “minor importance” and “didn’t make the participants rich.”

Bara didn’t comment on the fact that both Multimedia and Interkoncerts, the Prague-based promoting company that Grimaux runs with Robert Porkert, are now owned by Clear Channel Entertainment, but the written judgment did highlight the fact that Multimedia has a share in the Hungarian wing of Ticketpro.

The decision looks to be no more than a slap-on-the-wrist warning to the live music industry in general and, even though they’re happy that it’s been made, rival promoters acknowledge that it’s come too late to do them any financial good.

Showtime managing director Marton Brady – whose shows in the last two years include Eros Ramazzotti, Britney Spears, Cher, David Copperfield, Carmina Burana, Harlem Globetrotters, R.E.M., and Joe Cocker – reckoned that paying Ticketpro 12 percent commission on each ticket, when the market average is 8 to 10 percent, has cost his company more than euro 64,000 (around US$77,000) in that period.

Brady said he was also unhappy about taking all his show income via Ticketpro, having to carry the company logo on his tickets and posters and the fact that a rival promoter – through its association with Ticketpro – has so much access to his figures. He believes the situation is compounded by the fact that Ticketpro Hungary co-managing director Erika Borsos is the wife of Lazlo Borsos, a senior exec at Multimedia.

Brady denied he was the instigator of the complaints that led to the GVH investigation and the October 17 ruling, claiming, “It was someone who was faster than me.”

— John Gammon