Songkick may have prevailed in its two-year legal battle against Ticketmaster, but it came at a significant cost.
Fifteen minutes after markets had closed, Ticketmaster disclosed in an SEC filing Friday that it had settled its lawsuit with Songkick for a surprising $110 million. Facing a Los Angeles federal judge and concerned that the Ticketmaster brand would be put on trial to an unsympathetic jury, Live Nation officials opted to hedge what could have been a multi-hundred-million-dollar verdict.
When the lawsuit was filed around Christmas 2015, Songkick’s case was a long shot, arguing that Ticketmaster was monopolizing its own tickets and restricting the company’s access for artist presales and VIP clubs. Songkick tried to rally the anti-Ticketmaster cause first fought by Pearl Jam and later Mike Luba and String Cheese Incident and (years prior) hired Ticket Masters co-author Josh Baron to bolster its credibility (“I could write a second book based on the things I’ve seen,” he once told me). Funded by Warner Music Group owner Len Blavatnik, Songkick was backed by tens of millions of investor dollars, seeing an opportunity with the presale market to enter the ticketing space.
Songkick lost early in the case when a judge refused to grant Songkick a preliminary injunction, arguing its lawyers “failed to show virtually any likelihood of success on the merits and has only made a weak showing, at best, as to irreparable harm.” The momentum shifted in February 2017 when Songkick discovered that former employee Stephen Mead, under the direction of Ticketmaster’s Zeeshan Zaidi, had been secretly accessing Songkick’s computer systems, quietly monitoring its progress and customers.
Failing to prevail on a motion for summary judgment in October, Ticketmaster began quietly preparing for a settlement. On Friday the company announced it would be paying Songkick $110 million and would be acquiring its ticketing assets in a separate transaction. With no employees and only a non-operational ticketing company left over, Ticketmaster mostly picked up the company’s patents and tech.
Now that the fight is over, it’s time to count the bodies and assess the damage. Below we look at the casualties from the two-year-old battle in one of the biggest ticketing legal fights of the decade. We reached out to Songkick, Matt Jones and Ticketmaster for this story and did not receive a comment for this story.
Ticketmaster has $110 million less in the bank
The settlement paid by Ticketmaster represents about a 30% of what the company made in 2016, according to its year-end financial report. It’s a big number but it didn’t stop Live Nation from completing the acquisition of Frank Productions the day before, buying up one of the largest remaining indie promoters, responsible for $50 million in ticket sales in 2017.
So what did Ticketmaster get for its money? Besides containing a lawsuit that could raise embarrassing details and lead to questions about the hacking allegations, Ticketmaster clears any concerns about whether any of Songkick’s technology was used in the development of Ticketmaster’s Verified Fan platform. After all, Songkick deployed a similar system using Crowdsurge (which it merged with in 2015) for Adele during her 2015 tour, requiring fans to register in advance and purchase tickets at a preset time. The fact that a former Crowdsurge employee had been caught secretly logging into the platform and monitoring its development — and later worked on developing the Ticketmaster Verified Fan platform — certainly raised eyebrows and made the company’s anti-scalping technology a potential legal liability. That’s all put to bed now with this settlement.
Songkick is gone and everyone that worked on the ticketing team has lost their jobs
Songkick may have won this fight, but by ceasing tickets operations last year and selling off the concert recommendation engine to WMG, the company didn’t survive long enough to reap the benefits. Ticketmaster is only interested in the company’s patents and technology and will not be hiring any of its ticketing staff.
Ultimately, the fight with Ticketmaster would be the company’s undoing, making it nearly impossible for Songkick to access tickets for Ticketmaster events while also killing a thriving referral business between the recommendation app and Live Nation. After several rounds of layoffs, a few employees were shifted over to WMG, while the rest lost their jobs. Many of the executives cut in the Songkick collapse will find other work in the ticketing space — VP of Business Development Josh Baron is currently serving as a consultant for Seated, “a lottery-based ticketing system that collects data and weeds out scalpers,” according to his LinkedIn page.
Zeeshan Zaidi and Stephen Mead were publicly fired and might be under FBI investigation
Zaidi has been at the forefront of the artist presale battle since day one, deployed by Ticketmaster as the person responsible for making sure the company’s lengthy (and changing) fan club policy was followed. While Zaidi was often called upon to give sworn declarations during the first part of the trial, that changed when internal emails handed over to Songkick’s lawyers by Ticketmaster as part of a court-ordered discovery process showed that Zaidi had overseen the work of Stephen Mead, a disgruntled former employee of Crowdsurge (which merged with Songkick in 2014) and used his previous logins and credentials to secretly “hack” the company (Songkick’s words) and at one point, Mead allegedly encouraged his boss to “feel free to screen-grab the hell out of [CrowdSurge’s] system.”
This discovery led to a major shift in the lawsuit and seemed to move the momentum toward Songkick. Eight months after the allegations arose, Zaidi and Mead were quietly let go from the company, and Songkick officials have disclosed that the FBI is investigating the two men — we have been unable to confirm that. According to his LinkedIn page, Mead now works for Kemosabe, Sony’s label once controlled by Dr. Luke. And we have not heard anything from Zaidi — he hasn’t tweeted since the firing and his LinkedIn has not been updated. His brother Farhan Zaidi is general manager of the Los Angeles Dodgers.
What about Matt Jones?
Did Matt Jones and his contemporaries like former Co-CEO and chairman Ian Hogarth get any piece of the settlement money? Investors, led by Len Blavatnik, had sunk $60-$90 million into the company and the legal battle, which dragged on for two years, was costly. It’s unclear what was left over for either Jones or Hogarth, although Hogarth did take to Twitter after the settlement to pronounce “End of a long journey” with a link to an article about the settlement, about a month after he made this interesting declaration.
has there ever been a more stimulating/challenging time to be a futurist?
— Ian Hogarth (@soundboy) December 7, 2017
As for Jones, we made several attempts to contact him for comment and were able to secure an email from last fall where he discusses his time at the company.
“Over the last 9 years as CEO of CrowdSurge and then Songkick, I have invested a lot of time building an amazing team, many of them former promoters and venue staff themselves. These are the people at Songkick that have worked day-in and day-out with the hundreds of partners we have in the live music community,” he wrote, later adding “Beyond being nice, which I certainly believe them to be, I’ve witnessed the employees of Songkick working doggedly and professionally for nearly a decade to provide meaningful services to our partners.”
Latest posts by Dave Brooks (see all)
- House of Blues Bans Plastic Straws - August 13, 2018
- Trump’s Tariffs Cited In Rising Costs for Leiweke’s KeyArena Rebuild - August 13, 2018
- This Week’s Episode Features Bobby Reynolds, Noel Largess and Guest Host Jamie Loeb - August 10, 2018