Ticket Masters

The Rise of the Concert Industry and How the Public Got Scalped

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• Publisher: Ecw Press Digital
• Year: 2011
• ISBN:
  9781554909414
• Topic: Media & Performing Arts
• Subtopic: Music & Business

Since its launch in 1975, Ticketmaster has come to achieve such market dominance that some critics have denounced the company as an unlawful monopoly. Yet its path to the top was far from inevitable. Ticket Masters is based on first-person interviews with the key players and describes the behaviour of many world-renowned musicians from the righteous to the rapacious. With access to promoters, musicians and execs alike, Ticket Masters offers new riffs and wrinkles on a saga of ambition in the entertainment industry.

CHAPTER 5

Rumble in the Jungle

WEDNESDAY, JULY 5, 1995, WAS a muggy day in Washington, DC. With temperatures in the eighties and humidity high, it was typically oppressive weather in the U.S. capital. As Robin Williams’ radio DJ character in the film Good Morning, Vietnam once offered, “It’s hot and wet. Nice if you’re with a lady. Ain’t no good if you’re in the jungle.”

The political landscape in Washington has always been something of a jungle. Vast, dense and unforgiving, its hierarchal web of players and policies constantly changes and regenerates like a natural ecosystem.

Given the seemingly infinite activity of Washington politics, the decisions, legislation or activity of any given day in its history require some amount of gravitas to be remembered. The passage of the Child Protection and Obscenity Enforcement Act by Congress that day — requiring that producers of pornography keep records of all models who are filmed or photographed, and that all models be at least eighteen years of age — perhaps sticks out given the multibillion dollar industry it affected. There was another multibillion dollar segment of the entertainment industry that received notice that day, too. However, it didn’t receive any legislation or lengthy critique — just two sentences from the Department of Justice’s antitrust division.

“The Department of Justice announced today that it has informed Ticketmaster Holdings Group, Inc., that it is closing its antitrust investigation into that firm’s contracting purposes. The Department will continue to monitor competitive developments in the ticketing industry.”

The story behind those two sentences involves the first public battle the concert industry had faced since its humble beginning three decades earlier.

THE MUSICAL GENRE KNOWN AS grunge that developed in the Pacific Northwest in the late 1980s and early 1990s was an art form reacting, in part, to what it perceived as the country’s apathy-inducing commercialism. The Reagan years in particular seemed unnecessarily greedy, personified by Michael Douglas’s character in the film Wall Street, who famously boasted, “Greed, for lack of a better word, is good.”

Much like the punk music that preceded it, grunge was very much a DIY movement that was happy to fly under the radar of the mainstream. It relied upon itself for support — not on the institutions that had become music’s salesmen. Still, any band’s dream is to be able to ply its craft for a living. If that opportunity happens to come from a major label, so be it. Grunge presented a raw and brooding sound but one that, like punk, became commercially viable.

The Seattle-based band Pearl Jam released its debut album, Ten, in August 1991. Nirvana’s Nevermind followed in September and then Soundgarden’s Badmotorfinger. Each album rocketed into the charts, all eventually going platinum. Suddenly these grunge bands were on national radio, cutting videos for MTV, appearing on magazine covers and playing to a lot more people than they had just a few months earlier. What was once alternative was now, suddenly, the mainstream.

In May 1992, having already toured extensively throughout the United States and Europe — Ten was a worldwide success by no small measure — Pearl Jam wanted to do a free outdoor concert in its hometown of Seattle. Though the band had spent five months getting the necessary permits and paperwork for Gas Works Park, city officials pulled the plug three days before the event, citing crowd concerns: the 5,000 people initially expected had swelled to 20,000 to 30,000. The show was eventually rescheduled for September in Magnuson Park.

While the rescheduled show was still free, the city required tickets to help deal with crowd issues. Pearl Jam contacted Ticketmaster to inquire about its ticketing services for the show. The company asked for $1 to $1.50 per ticket, asserting the need to cover its costs. The thought of shelling out $45,000 so 30,000 fans could see the show for free didn’t agree with the band. Dissatisfied, the group found other solutions, utilizing local radio to spread word that tickets were being distributed at the Seattle Center Coliseum. While the show was a success, little did the band know that it was only the beginning of its troubles with Ticketmaster.

That December Pearl Jam culminated its tour with three shows at the Seattle Center Arena. The band had earmarked $20,000 of its projected profit as a charitable donation to the Seattle Center Arts and Sciences Academy. According to Kelly Curtis, the group’s manager, he had gotten a local Ticketmaster representative to agree to match the amount two months earlier.

The day the tickets were to go on sale, says Curtis, the band received a call from the rep informing them the donation had not been authorized. Ticketmaster, the band said, wanted to increase the service charge by a dollar to cover its donation.

Curtis said he ordered Ticketmaster to cancel the shows. He contends that after a lengthy discussion Ticketmaster consented to a donation without a rise in service fee, though only $14,000 went to charity — one dollar per ticket sold.

Conversely, as Chuck Philips reported in the Los Angeles Times, anonymous Ticketmaster officials said it was Pearl Jam who caused the problem — the band wanted to raise the service fee by fifty cents to cover its portion of the donation. As Ticketmaster spokesman Larry Solters would later tell Philips, “When Pearl Jam needed to raise money for their charity, they didn’t seem to have any difficulty with raising the service fee to accomplish it. It kind of makes you wonder what this whole dispute is about.”

From its beginning Pearl Jam tried to be price sensitive to its fans. The band’s modus operandi was that if they were willing to take less money, then so should those that they were doing business with (or, from their point of view, were giving business to).¹ It was a contentious conceit but one Pearl Jam could theoretically toe the line on, given its popularity.

As it began planning for its summer 1994 tour, after the conclusion of the winter 1993 tour — it already had its spring 1994 tour in place — Pearl Jam told promoters that it would again be keeping its ticket prices low: an $18 base price with no more than a ten percent service fee on top. In addition the band had two other provisions: the service fee had to be printed on the ticket separately from the base price, and the ticket stock could not have any advertising.

These conditions put promoters in a precarious position. Pearl Jam was one of the hottest acts performing — any show was likely a sellout — and promoters competitively bid for the show. However, the per-ticket service charge and the particulars of what appeared on the face of the ticket were not things that promoters unilaterally controlled. The demands struck at one of the concert industry’s main pressure points.

Ticketmaster negotiated its contracts with venues (and promoters) on a case-by-case basis. As previously discussed, the company would incentivize buildings to sign exclusive, multiyear contracts with monetary compensation. Depending on the size, location and history of the venue, the building would get an advance on future sales (as a record company gives an artist) and, occasionally, a signing bonus. Once the advance was recouped, the buildings and promoters would get annual rebates as part of a revenue share of the service fees with Ticketmaster.

Within each contract specific terms as to what service fee caps could be for various events (concerts, sports, circuses, etc.) were laid out. From those benchmarks Ticketmaster, the venue and the promoter would then determine the service fee for a specific event. Sometimes the promoter, having paid too much for an act, would need to recoup some of its money with an increased service charge. Other times, if the band was big enough, they would request part of the service charges. Or perhaps the building, having paid for extensive renovation, wanted to add a facility fee, too. The point being: if a band makes a unilateral demand about the service fee, all of those elements are potentially affected.

Ticketmaster was not inclined to take less money just because Pearl Jam saw fit to do so. It had paid handsomely for its exclusive contracts with many of the country’s premier venues and would not allow the band to dictate policy. It operated on negotiations, not demands.

For its spring 1994 tour Pearl Jam made efforts to keep prices down and service charges identified on tickets. For the two Chicago dates Ticketmaster wanted to levy a $3.75 service charge to the $18 ticket. While the band consented, it made arrangements with the company’s Chicago general manager to separately identify the fees. Shortly before the tickets went on sale, the group says the company reneged.

“It was necessary for us to threaten to perform at another venue before Ticketmaster backed down and agreed to sell tickets that separately disclosed its service charge,” the band would later write. “Even then, Ticketmaster told us that its concession only extended to our Chicago shows and we should not expect them to be willing to do it elsewhere.”

For the March 19 show at the Masonic Temple Theater in Detroit, the group made approximately 300 tickets available via mail order to its fan club. Receiving a letter in the mail, Ten Club fans were informed “the band will be playing a small venue in Detroit and we are offering you the chance to buy tickets before they go on sale to the general public.” The other 2,900 tickets were distributed to the public via a mail-in lottery promoted through newspapers. Fans mailed in a coupon from one of the local newspapers with their social security number; later the papers printed the winners’ names (several hundred thousand requests are said to have been received).

The show’s promoter, the Nederlander Organization, had an exclusive deal with Ticketmaster. The ticketing agent threatened to sue for breach of contract if the venue used another ticketing service. Taking a precautionary step, Ticketmaster shut off the company’s machines, disabling them from printing tickets that were needed to fulfill the orders. Once again, after heated discussions, Ticketmaster allowed the shows to move forward only after being allowed to take a portion of the $1.75 service charge.

After selling out two shows at Boston Garden, Pearl Jam decided to add a third at the city’s significantly smaller Orpheum Theater. When discussing ticketing options with the band’s management, Ticketmaster CEO Fred Rosen suggested a phone lottery, just as Sting had done when he did an underplay at the Wiltern Theater. It would also help prevent scalping.

Ticketmaster initially wanted a $3 or $4 service charge on top of the $18 ticket price — in part because of the increased credit card transaction fees that came with all purchases made over the phone. The band balked and threatened to sell tickets via coupons in The Boston Globe and The Boston Phoenix as it had in Detroit. The ticketer soon agreed not only to a $1.80 charge — making the total ticket price $20 — but it also agreed to chip in twenty cents per ticket for charity. Kelly Curtis told the Globe, “Ticketmaster fought us in Detroit but they came to the party in Boston.”

For its New York City gig on Sunday, April 17, at the Paramount Theater below Madison Square Garden — once known as the Felt Forum and now known as the Theater at MSG — the band again bypassed Ticketmaster, making an initial mail-order offer to its Ten Club members and then utilizing local radio stations to give away the rest two days before the concert. Ticketmaster threatened the Paramount with legal action but ultimately did not pursue it.

Pearl Jam’s team had carefully scrutinized Ticketmaster’s contracts and found three loopholes, never publicly discussed, that they could exploit. Detroit and New York were test runs. Having stood up to Ticketmaster successfully on both occasions while smoothly delivering tickets, Pearl Jam felt it had temporary ticketing options while it figured out longer-term solutions.

THE PREVIOUS YEAR THE BAND had met David Cooper at one of its shows in Boulder, Colorado. Cooper, an accountant and a computer whiz, had gotten his start developing concert accounting software in the early 1980s. His first piece of software allowed venues and promoters to get accurate counts of their ticket allotments from their regional outlets in a timely fashion. Accurate ticket counts were a typical problem as tickets sold differently in different locations and made decisions like where, or whether, to advertise haphazard (although some systems, such as Jerry Seltzer’s BASS software, were up to the task). Now each day there was an accurate count of inventory. His next advancement was in tour accounting for bands. Whereas managers would often have to wait days to get updates on a given show or tour’s finances, they could now receive precise daily updates via an acoustic coupler modem that could be printed out from a computer. This proved to be particularly handy for international artists — The Who, David Bowie and U2, among others, were clients. Cooper would go on to help build what was essentially a private internet for managers in the mid-1980s called International Managers Communications that would allow them to communicate with their bands while they were on the road. At the time his promoter accounting software was being used by most of the industry’s biggest names.

Cooper eventually got involved with ticketing technology, approaching its functionality from an accountant’s point of view while always keeping the music fan at the forefront of the transactional experience. He had done work for Ticketron and Ticketmaster, started his own ticketing company and has subsequently dabbled in numerous other ticketing technologies.

He had met Pearl Jam’s manager, Kelly Curtis, when Curtis was a tour accountant for the Japanese band Loudness. Curtis had used Cooper’s accounting software and was now encouraging Pearl Jam’s tour accountant, Mike “Goon” M...

Table of contents

• Cover
• The Summer of Their Discontent
• A Few Reservations
• Put Your Seat in Our Hands
• Master Class
• “A Bunch of Wooly Freaks”
• Rumble in the Jungle
• Rock and Roll’s New Bottom Line
• Bigger Bangs for Your Bucks
• e-Ticket
• A Quiet Victory
• Secondary Education
• It’s a Live Nation
• Full Circle
• Endnotes
• Source Notes
• Glossary
• Acknowledgments
• About the Authors