Azoff's involvement with Sticketbastard/scalping
 

Wow.

http://www.hypebot.com/hypebot/2009/...-revealed.html

Project Showtime: Secret Deal Between Irving Azoff, Ticketmaster & Ticket Scalpers Revealed

Irving Azoff and Ticketmaster were reportedly involved in a plan to combine major secondary ticketing services along with other entertainment industry assets just months before Azoff was damning the ticket scalpling in the press and distancing himself from the practice.

Azo According to a damning Wall Street Journal article, the deal codenamed Project Showtime only fell apart because of distrust between the participants. But that was not before the sTicketsecondary ticket outfits were given hundreds of premium tickets in a backroom deal to scalp for Azoff client Van Halen's reunion tour that reportedly netted the band an additonal $1 million.

The proposed alliance with secondary ticketers was hatched at a meeting led by Azoff in the summer of 2007. "I always knew we'd end up in a room together," he reportedly told the Hollywood gathering. "I just thought it would be a courtroom." Present were senior executives of AEG Live, Ticketmaster and

Cablevision Systems Corp.'s MSG Entertainment and the owners of Boston-based Ace Ticket; LA's Barry's Tickets Service Floridas' Total Tickets, Chicago's Gold Coast, New York City's Elite Ticket, and Alliance Tickets, which operates in Denver, Las Vegas and Seattle.

Both moves run contradictory to Azoff's more recent public pronouncements as the now-head of Ticketmaster working towards regulartory approval of a merger with concert company Live Nation. They also offer a glimpse into just how powerful the combined entity could be. Azoff was not yet the head of Ticketmaster at the time of the secondary ticket and Van Haeln wheelign and dealing, but his Front Line Management firm was already partially owned by the ticket giant.

Wow indeed.

Lets hope the WSJ article gains traction.

John D. Luerssen from Spinner Canada is reporting:

VAN HALEN allegedly worked with scalpers during its fall 2007 tour in order to pull down an extra $1 million, according to a new report by the Wall Street Journal. The financial paper says the band was involved in farming out of up to 500 of the best seats from about 20 of its concerts with original frontman David Lee Roth to secondary ticket brokers.

In a move that was part of a Ticketmaster initiative named Project Showtime, the desirable tickets were pulled from the company's system and passed directly to private sellers. These secondary ticketing firms reportedly kept 30 percent of the inflated sale price for themselves and pushed the remaining 70 percent back to Ticketmaster, the band and its handlers.

According to reporter Ethan Smith, the move by Ticketmaster was in effort designed to capture a piece of the sky-high prices charged by scalpers, which can exceed a ticket's face value by hundreds, or even thousands, of dollars.

Van Halen's manager Irving Azoff - who was the CEO of Front Line Management, which Ticketmaster then co-owned, and who now serves as Ticketmaster's chief executive - is said to have spearheaded the scheme. Project Showtime fell apart because of distrust between participants, but not before the secondary ticket brokers were given tickets to scalp for Van Halen with Azoff's blessing.

Azoff has since condemned ticket scalping in the press and distanced himself in the practice after the subsequent merger between Ticketmaster and Live Nation, which occurred earlier this year.

I know I'm going to get slapped about this, and for sure I'm oversimplifying
this issue. But this doesn't upset me as much as it does most people. Someone
else in another thread wrote something like "too bad it's not first come first
served like it used to be". It's really never been that way. Maybe it's never been
as corporate as it is now with TM, Azoff and etc..etc. Some of my first concert
tickets were scalped........ELVIS no less (I was a child). That was back in '75, and
some of the front row tickets were going for one thousand $ a ticket! Imagine what
that would be with adjusted inflation.

Management knows these tickets are going to be scalped by someone, so why
not them? Does it sound cheesy......yes. Illegal......could be. Just pretend you
knew a scalper and he was going to sell you a front row seat to see the Mac and
all it cost you was $25.00 over the face price (I know that's really pretending $).
Would you take it? Would you walk right past those other old school Mac fans
that are waiting in line, and maybe say something like "out of the way grey hair",
and then walk up to your ticket buddy (scalper, pal) and get your front row seat?
I believe most would take the ticket.

BTW, the dude that got us the ELVIS tickets was sent to jail........WHO KNEW???

I've suspected for a long time that ticketbastard has back door deals going on. How else can a concert sell out in 15 minutes?

When ~200K (if not far more) people flood Ticketmaster's site at 10AM for, say, a U2 show that seats 18K, its very easy for said show to sell out clean in 5-10 minutes- even if you hypothetically took all the amateur scalpers out of the equation.

Here's a NYTimes article

And here's a WSJ article from March, all along the same lines.

Here's the full WSJ article that Livia initially posted about:

Ticketmaster Entertainment Inc., the nation's leading ticket seller, and Live Nation Inc. decided to merge, Ticketmaster pursued a strategy to thwart the concert promoter's plan to enter the ticket-selling business, according to several people familiar with the matter. Spearheaded by Irving Azoff, Ticketmaster's current chief executive, the effort sought to combine several of the nation's biggest ticket scalpers with Ticketmaster and other major concert-industry players. At the time, Mr. Azoff was the CEO of Front Line Management, which handles dozens of top musical acts and was partly owned by Ticketmaster.

The goal of the initiative, codenamed "Project Showtime," was to capture a piece of the sky-high prices charged by scalpers, which can exceed a ticket's face value by hundreds, or even thousands, of dollars. They could then compete against Live Nation's nascent ticketing business by offering to share the scalpers' revenue with entertainers and venues.

Others involved in the talks included AEG Live, the largest concert promoter after Live Nation, and MSG Entertainment, which owns Madison Square Garden.

After months of talks, the initiative against Live Nation -- which back then was in effect positioning itself as a competitor of both Ticketmaster and the brokers -- fell apart amid mutual distrust, according to people familiar with the matter. Neither side was confident it would get accurate accounting from the other. Nonetheless, the plan sheds light on the motives behind the current merger, whose antitrust implications are currently under review by the Justice Department.

The proposed merger between Live Nation and Ticketmaster would join the two former rivals and also create a more efficient way to realize many of the financial benefits Ticketmaster would have received if it had teamed up with the brokers. A combined company could set prices that are closer to what the market will bear, according to people familiar with the company's strategy, allowing it to snag much of the money that currently flows to scalpers.

"Ticketmaster continually explores new and viable revenue streams in both the primary and secondary marketplace on behalf of our clients and live event rightsholders," a Ticketmaster spokesman said. He cited numerous ways the company has sought "to maximize sales and capture the fair market ticket value for promoters, venues, teams and artists."

Testifying before the House Judiciary Subcommittee on Courts and Competition earlier this year, Live Nation CEO Michael Rapino cited all the money flowing to the burgeoning scalping industry as a key rationale for the merger. "[Scalping] is about a billion-dollar business that we receive zero dollars from," Mr. Rapino complained. "We spend millions on real-estate and artist investments, and we realize zero of the scalping market."

Scalpers, who prefer to be called brokers, are worried that the merger could run them out of business. "If this merger were to go through, the secondary market for concert tickets as we know it would cease to exist," predicts Paul McCann, a ticket broker near Baltimore who was not involved in the Project Showtime talks. "They would replace it with something they create, and they will keep all the money the secondary market generates."

The attempt to create Project Showtime got started with a meeting at Ticketmaster's West Hollywood, Calif., headquarters in the summer of 2007. It was led by Mr. Azoff, who opened with a joke. "I always knew we'd end up in a room together," he told the assembled brokers, according to people with knowledge of the meeting. "I just thought it would be a courtroom."

Present at the meeting, according to these people, were senior executives of AEG Live, Ticketmaster and Cablevision Systems Corp.'s MSG Entertainment, which owns Madison Square Garden and Radio City Music Hall. Spokesmen for AEG and MSG Entertainment declined to comment.

The brokers at the meeting were the owners of Boston-based Ace Ticket; Los Angeles's Barry's Tickets Service; Fort Lauderdale's Total Tickets; Chicago's Gold Coast Tickets; New York City's Elite Ticket Service; and Alliance Tickets, which operates in Denver, Las Vegas and Seattle.

Promoters and others in the mainstream concert business have long looked with envy at the steep markups scalpers charge for hot concerts. The Internet has made such resales easier and even more lucrative, allowing brokers to buy tickets for events in distant cities and list them on Web sites like eBay Inc.'s StubHub.com. But brokers can also be left holding the bag when they bet big on a show that flops or an outdoor event that is rained out.

Under the plan, the consortium led by Ticketmaster and its then-parent, IAC/InterActiveCorp., was to acquire the six regional ticket brokers for as much as $25 million apiece and give them seats on the new venture's board. (Ticketmaster was spun off last year by IAC and subsequently acquired a majority stake in Mr. Azoff's Front Line Management, installing him as CEO of the combined entity. A spokeswoman for IAC declined to comment.)

Mr. Azoff and the other executives emphasized "how big it was going to be, how it was going to crush Live Nation," recalls a person who attended. "We'd go forward and make lots and lots of money." At a dinner later, Timothy B. Schmit, a member of the Eagles, one of Mr. Azoff's longtime management clients, stopped by.

There was even a test run in the fall of 2007, according to numerous people with knowledge of the matter. Up to 500 of the best seats to each of about 20 concerts by Van Halen, the veteran hard-rock band managed by Mr. Azoff, were pulled from the Ticketmaster system and passed directly to the brokers being considered for acquisition.

The brokers kept 30% of the marked-up sale price for themselves, and the remaining 70% was divided among Ticketmaster, the band and its handlers. The band netted an extra $1 million, at least, from the arrangement, according to people familiar with the matter. A spokesman said the band wasn't available for comment.

But Ticketmaster executives were ultimately wary of going into business with the leaders of an industry they had long opposed.

The company briefly explored another avenue into the secondary market, paying $265 million last year for a ticket-resale site called TicketsNow.

Ticketmaster is now trying to sell that Web site, and people familiar with the situation say the company ultimately decided the merger would allow it to achieve many of the same goals as buying the ticket brokers.

Just last week, Ticketmaster also opened another front in its battle against scalpers, initiating a new technology that blocks any computer that attempts to access the company's Web site 1,000 times or more in a day, a frequency achieved by some professional scalpers using special computer software. The move is likely to further heighten tensions with brokers.

A spokesman for Ticketmaster said, "We regularly take measures to protect the security of our Web site and system to enforce our terms of use."

I guess I underestimated the ability of their system to process thousands of transactions so quickly. Still, I wouldn't be surprised if it comes out that they do have a backdoor to scalpers. They could easily sell them blocks at a higher price without the public knowing anything about it.