So now you know who gets some of those excessive Ticketmaster fees….
Papers lodged in the High Court in the case over the management of the Electric Picnic have brought the issue of Ticketmaster rebates to light
…Yes, the promoter
Yesterday’s Irish edition of the Sunday Times carried a colourful story about the comings and goings around the ongoing court case about who controls what when it comes to the Electric Picnic. But in the midst of that story by Mark Paul, there’s also reference to something many in the industry have known for years, but which few have been able to prove: payments from ticketing agency Ticketmaster to promoters in the shape of rebates. We first raised this issue on OTR five years ago and have been waiting for more on this ever since.
So why should this be of interest to the ordinary decent punter? Well, it’s very simple. You know those extra fees which are added onto the price of the ticket by Ticketmaster? You know those fees which you are always giving out about? It seems that a slice of those fees goes back to the promoter, with the size of this rebate depending on the volume of business which that promoter does with TM.
For years, promoters (and acts) have used TM as a handy whipping boy when it comes to the blame game for high ticket prices. But in truth, there is a very worthwhile financial imperative for many of the promoters to maintain the TM connection and this is down to the rebates. As this report from the New York Times shows, rebates aren’t just an Irish thing.
In this case, per Paul’s report taken from papers filed with the High Court during the current action, Electric Picnic founder John Reynolds alleged that some of the TM rebates for the festival were going to Festival Republic Dublin (FRD). Furthermore, “Reynolds says he could get a rebate of 75c per ticket on his own and that with all FRD’s ‘financial might’, they can only get €1 together. He argues that previously the total rebate was €1.75 at a time when tickets were a third of the price.” FRD’s Melvin Benn then replied to this, saying “it is what I agreed with you and TM and Denis Desmond. It is 33% better than you get. Surely that is a good thing?”
There is also a very interesting quote from MCD and Festival Republic’s Desmond in response to Reynolds’ charge providing more proof about the value of these rebates to the promoter: “[My companies] sell 1.2m tickets in Ireland. When [Reynolds] sells 1.2m tickets in Ireland, he will get the same Ticketmaster rebate we get”. The amount of the rebate for 1.2m ticket sales is not mentioned but, given the figures per ticket bandied about by Reynolds, we’re probably talking a couple of million in payments from the additional fees foisted on punters for their tickets.
While the piece does add some (fabulous, fascinating, hilarious in places) colour to the on/off EP saga, the rebates matter is something which should be of concern to every gig-going music fan, regardless of whether they go to Stradbally or not. For years, many have asked about TM’s quasi-monopoly position in the marketplace and why this is so. We’ve always been told that promoters preferred to deal with one company rather than several and that TM’s systems and nationwide reach yadda yadda yadda was the bees’ knees etc. Other companies have tried to compete but no-one has been able to beat TM at this game.
But why would promoters go elsewhere when they’re getting a slice of the TM fees back as rebates? Those past off-the-record attempts by and briefings from promoters blaming TM for those fees can now be seen as hypocritical. They’re sticking with TM because they’re receiving a take of the fees paid by punters who have no other choice in service provider if they want to get their hands on tickets. You wonder what the acts make of this cash-grab – perhaps some whip-smart agent is already making a claim for a percentage of the rebates because there would be no rebates in the first place without the act.
Surely this is an issue for the Competition Authority and National Consumers Association too, given the manner in which the rebates are made and TM’s deals with the promoters? While promoters under TM deals are free to sell a certain proportion of their tickets with another provider, it’s usually only a very small percentage of the total and unlikely to trouble TM’s bottom line. Also, given that the rebates are volume-driven, it’s better for the promoters to keep the largest possible chunk of their business with TM. It seems that we have a new suspect in the blame game about why ticket prices are so high.