AEG / Viagogo Honeymoon Over?
The Wall Street Journal reported on Monday that AEG Live took legal action after discovering Viagogo was, well, cheating by offering discounted blocks of tickets for Michael Jackson’s 50 shows in London to other resellers – tickets AEG shunted to Viagogo to be sold at inflated prices.
Viagogo sent an email, which was viewed by The Wall Street Journal, to scalpers and resale services offering to cut bulk deals on its inventory.
On Friday, AEG scored a temporary victory in court. A judge ordered the agent, Viagogo Ltd., to agree not to offer or provide Jackson tickets to any resellers.
AEG’s reaction when Viagogo’s infidelity was discovered?
“We went nuclear,” upon seeing the missive, AEG Live Chief Executive Randy Phillips said in an interview. “It was not our intent to sell to brokers.”
Except for Viagogo apparently. For some reason, the company’s CEO was reluctant to talk to the WSJ when they attempted to contact him to get his side of the story.
Viagogo Chief Executive Eric Baker didn’t respond to three voice messages left on his cell-phone over the weekend.
AEG’s Phillips was willing to talk though, telling Gammon the company was only protecting its interests.
“We weren’t trying to kill them in court or rescind the deal because it’s too far down the road for that,” he explained. “We just wanted to make sure they comply with the terms.”
So exactly how many tickets does Viagogo have its hands on? Last week, The Times of London estimated the number at between 500 and 1,000 per show. Turns out that figure might be a little low.
From the WSJ:
Tickets to Mr. Jackson’s 50-date run at the O2 Arena were normally priced at £50 to £75 ($70 to $105). Those seats sold out in five hours, according to AEG, which is owned by billionaire Phil Anschutz’s Anschutz Corp. AEG says it set aside about 10 percent of the seats, or 1,700 a night, as “official premium” tickets, to be sold for several times those prices. Mr. Jackson’s role, if any, in the markup plan wasn’t clear. Mr. Jackson’s manager, Tohme Tohme, declined to comment.
For those of you bad at math (I know I am), that’s approximately 85,000 tickets set aside to be sold at seriously inflated prices on Viagogo. It’s impossible to be certain about the number though, because Phillips told Gammon only seven percent of tickets were set aside.
Of course, it’s easy to tell the “official premium” tickets on Viagogo from tickets that are being scalped, right? Not so much, according to the WSJ.
The main ticketing Web site for the concert series, MichaelJacksonLive.com, contains a link to Viagogo, where premium tickets are mixed in with resold tickets. The latter are supposed to be offered only by fans, though there is no way to determine whether any given ticket is being resold at a markup, or part of the premium offering. On Sunday, the higher-priced tickets were listed between £145 and £275 ($204 and $386).
Phillips told Gammon the deal originated when the company received “a number of approaches” from secondary sellers including Viagogo and Seatwave.
Viagogo was chosen after meetings with AEG Enterprises managing director Jessica Koravos and AEG Live U.K. chief Rob Hallett. The company won the deal because it has a secure site and it agreed not to sell tickets to other brokers, which meant AEG had to monitor only one site.
Phillips defended the Viagogo deal, saying making a premium on such a small number of tickets allowed more tickets to be sold for £75.
“If it’s £100 for Tina Turner and £160 for Madonna, what should it be for the comeback shows of the biggest pop and rock star the world’s ever seen?” he said, adding he believes he could have sold 200 Jackson shows at the O2.
He dismissed a report in The Times that AEG tried to keep the deal quiet, pointing out that the company’s logo is on Jackson’s site along with clear links to Viagogo’s site.
The AEG Live chief also took the opportunity to speak out about a number of issues that have been raised about Jackson’s shows.
Phillips attempted to quell any fears that Jackson would not be able to perform 50 shows, telling U.K. papers the King of Pop is in “great shape,” and clarified reports alleging that AEG would “self-insure” the shows and take financial responsibility for any mishaps.
“We’re still talking to potential insurers but we’re prepared to take some liability if none of them want to take it all,” he said.
Of course, this whole episode raises a question. What exactly was Viagogo’s motivation here?
Were they just trying to make even more money by offering discounted blocks of tickets to other resellers in return for a cut of their profits?
Or did they suffer from a kind of buyers’ remorse? It’s possible Viagogo is worried that Jackson will bail on some or all of the shows and they’ll end up holding a bunch of useless tickets. (Or worse, having to refund a lot of money.) By shifting some of their inventory to other resellers, the company would have its money no matter what happens.
So why wasn’t anyone at AEG Live keeping an eye on Viagogo? Good question. Apparently when a source close to the company told The Times of London last week, “There are systems in place to make sure people cannot buy multiple tickets and sell them on,” they were only talking about fans.
As for AEG’s reported outrage at Viagogo’s behavior, “If you lie down with dogs…”