The Songkick fight with Ticketmaster is getting quite dishy.
A few weeks after Songkick filed a salacious motion for a preliminary injunction with private emails between Ticketmaster and its clients, TM is fighting back with a statement from a former Crowdsurge employee who alleges the company knowingly and willfully violated Ticketmaster’s fan club rules. Songkick merged with Crowdsurge in 2015.
That former employee, Stephen Mead, is now employed by Ticketmaster where he has worked since 2013. He currently serves as Director of Client Relations for the Artist Services Division of Ticketmaster. In a motion filed yesterday in Federal Court, he alleged that management at Crowdsurge not only ignored Ticketmaster’s fan club rules, but also that “senior management at CrowdSurge literally laughed at them and threw them in the trash.” Mead also alleged, “We viewed Ticketmaster as a ‘toothless tiger.’ Once Ticketmaster began trying to better police its rights and enforce its fan club policy, CrowdSurge simply played a game of “‘catch me if you can,’ and typically was not caught.” (You can read the entire statement here).
The declaration comes as part of a multi-document filing from Ticketmaster attorneys who are battling a preliminary injunction filed by Songkick as part of their large anti-trust suit with the ticketing giant. Last month, Songkick attorneys asked a court to force Ticketmaster to allocate fan club allotments to Songkick artists without charging service fees. Songkick said TM had interfered with allocations for Alabama Shakes and Weird Al Yankovic tickets. Ticketmaster argued back that Songkick was a serial violator of fan club rules and is seeking to have the injunction dismissed.
Is this case going off the rails? What began as a long-shot antitrust case that Ticketmaster was monopolizing its own tickets has devolved into a tit-for-tat over the company’s oft-misunderstood fan club rules. Songkick argues that Ticketmaster unfairly implements its fan club rules and Ticketmaster argues back that Songkick has built a business around exploiting and regularly violating the fan club rules. The more this case derails into an argument about a two-page rule sheet, the further it gets from having anything to do with antitrust violations that may or may not actually exist. That’s good for Ticketmaster and bad for Songkick.
In his declaration, Mead outlines in great detail how Songkick-predecessor Crowdsurge knowingly and allegedly broke TM’s rules. Below, he details Crowdsurge’s alleged strategy to circumvent the rules. Keep in mind this supposedly happened between 2010 and 2012, when Mead was employed as Crowdsurge’s General Manager of North America and later the Senior Vice President of Global Operations:
CrowdSurge knew that with so many concerts in so many venues, it was very hard for Ticketmaster to monitor its exclusive ticketing rights. CrowdSurge, therefore, made a practice of knowingly misrepresenting to artists the scope of the exclusive ticketing rights that venues had sold to ticketing service providers. CrowdSurge told artists that tickets distributed through any artist presale fell outside the scope of exclusive rights granted by venues to ticketing service providers like Ticketmaster, and thus artists did not need to be “constrained” by Ticketmaster’s exclusive rights.
Once we convinced artists that they held ticketing rights that could be sold in a presale, it was easy to leverage the artists against the venues, and demand that the venues supply us with 10% of the tickets (on pain of having the artist pull the show). Artists have the most power in the music industry, and we found that often venues that knew they had sold exclusive rights to others would go along with artist demands (communicated by CrowdSurge) for presale tickets. CrowdSurge encouraged this knowing full well that it was trafficking in ticketing rights that had been paid for by Ticketmaster.
Mead said he resigned from the company in June 2012 after “COO Adam Schiffer informed me that CrowdSurge was ‘cutting my salary,’ and that it eventually intended to replace my position with less expensive, ‘straight-out-of-college’ hires.”
Are you starting to get the feeling this is getting really personal? And if Stephen Mead was such a knowledgeable and active participate in violating the fan club rules, why did Ticketmaster eventually hire him? That never gets explained in the declaration.
“During my tenure at CrowdSurge, acquiring ‘free’ ticketing inventory from venues was of critical importance to (CEO) Matt Jones and senior management,” Mead said, later adding that “[a]s a company, we publicly took the position that whatever allocation of ‘house seats’ that we were requesting from any given venue belonged to the artist that we represented, and accordingly the venue—and whatever ticketing service provider that it had contracted with—had no right to require us to pay anything for the ticketing inventory. In fact, I was given specific instructions by Matt Jones to ‘strong-arm’ the venues on the ‘no fees demand.’ If a venue did not immediately acquiesce to our demands for tickets free of charge (i.e., settled at face value, with no service fees attached), we enlisted the artist manager to put pressure on the venue, the implicit threat being that if the artist was not happy, the manager would pull the show and the artist would perform at a competing venue.”
Both sides are scheduled to be in court next month to argue the merits of the preliminary injunction.
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