Ticket Holds Scrutinized

What’s often referred to as the industry’s “dirty little secret” – the widely acknowledged but rarely admitted-to practice of selling tickets held back from the public onsale at what are perceived to be inflated prices – was given somewhat of a “sunshine” treatment by the Wall Street Journal March 11.

The news that artists, managers, promoters and others sell their own tickets wasn’t nearly as breathtaking to those in the industry as the fact that it was actually copped to – even if only indirectly.

The Journal’s Ethan Smith used a Neil Diamond concert at New York’s Madison Square Garden as an example, though any number of artists could likely have been singled out for the anecdote.

The paper reported that more than 100 tickets became available for sale, for hundreds of dollars more than face value, on Ticketmaster’s TicketExchange.com Web site less than a minute after the onsale began – and reported they were Diamond’s own tickets.

Smith reported that Ticketmaster’s former and current CEOs – the latter being Diamond manager Irving Azoff – have acknowledged the arrangement, as has an unnamed source familiar with AEG Live, which promoted the show. However, neither Azoff nor the AEG Live source was directly quoted.

However, ex-Ticketmaster CEO Sean Moriarty reportedly told a gathering of more than 100 ticket brokers last May that his company had used TicketExchange to sell 160 Neil Diamond tickets over two shows at marked-up prices.

“That’s a choice up to Neil and management,” Moriarty was quoted by the Journal as saying.

“It’s our job to make our clients aware of every opportunity that exists,” Azoff told the paper in an interview last year.

It should be noted that TicketExchange is distinct from TicketsNow, also owned by Ticketmaster. The former sells premium, primary tickets – though the distinction may be lost on fans who fail to read the Web site’s Frequently Asked Questions.

However, with a slogan on the front page that says “Buy tickets. Sell tickets. It’s that simple,” the confusion is understandable. Joe Freeman, Ticketmaster’s VP for legal affairs, also told the paper the tickets appearing through the “Marketplace” tab are rarely offered by fans for sale.

According to Freeman, “the vast majority of tickets are sold by the artists and their promoters with the cooperation of Ticketmaster.” In fact, he says that for any concert to which Ticketmaster carries so-called platinum seats, the Marketplace sells only artist-sanctioned tickets.

But that doesn’t mean that Ticketmaster does not facilitate a secondary market.

Azoff told the paper in a March 10 interview that when ticket brokers resell ducats without promoter or artist permission, it “drives up prices to fans, without putting any money in the pockets of artists or rights holders.”

Yet several top artist managers and TM execs told the paper the company routinely offers to list hundreds of the best tickets per concert and divides the extra revenue, which can amount to more than $2 million on a major tour, with artists and promoters.

These are the tickets that wind up on TicketExchange.

But it’s well known in the industry that some major concert tours involve the pricing and sale of “official” tickets in such a way that they appear to be resales by fans or brokers but are actually artist and promoter holds.

Of course, it must be said that not all artists and promoters engage in the practice of selling some or all of their allotments. The WSJ article raised hackles with some promoters who did not want to be associated with the practice.

“Jam Productions does not sell tickets to the secondary market nor to any scalpers,” Jam’s Jerry Mickelson and Arny Granat told Pollstar. “Jam has chosen not to participate in this practice because we respect the consumers’ right to obtain the best seats at the lowest possible price that is listed on the face of each ticket. We do not feel we should drive up the prices any further and we work diligently to protect the fans who come to Jam concerts and events.”

But that doesn’t prevent artists and others from selling their allotments, according to the Journal, citing recent examples including tours by Bon Jovi, Celine Dion, Van Halen, and the current Elton John / Billy Joel outing. Not surprisingly, the WSJ couldn’t find representatives for artists willing to return phone calls on the subject.

However, the Journal still found fault with Ticketmaster’s online efforts, including a link to the “Marketplace” page for Britney Spears tickets that said “Browse premium seats plus tickets posted by fans.” Shortly after an inquiry by the Journal, the message was removed and prices fell.

Another criticism of Ticketmaster’s site is that tickets that do not sell at the inflated platinum prices can also be moved between TicketExchange and the lower-priced main inventory without warning to consumers.

Secondary marketers and brokers complain that artists sell their own tickets for inflated prices but rarely admit doing so, preferring to let Ticketmaster take the heat.
“It’s not fair for artists to hide behind Ticketmaster / TicketExchange,” Baltimore broker Paul McCann told the Journal. Ticketmaster’s Azoff told the paper the company is working on ticket origin transparency on TicketExchange. “It’s cloudy and has to be cleaned,” Azoff said.

To be sure, the secondary market is a thorny topic and has been for years. Artists, managers, promoters and venues may wish to draw a distinction between ticket brokering “scalpers” and their own attempts to monetize that market as a legitimate endeavor, but fans are hard pressed to see the difference.

And ultimately, it’s Ticketmaster that gets the public relations black eye – and not the beloved artist who actually put the higher-priced tickets on sale. Hence, the “dirty little secret.”