TJ Chambers
Ticketing economics and the stupidest ever deal
As many of you know, Mark Davyd the CEO of Music Venue Trust publishes via Substack and his most recent post (29th September) ‘Myth-Busting’ (https://markdavyd.substack.com/p/myth-busting) outlines the economics of ticketing using the example of the recent Oasis Ireland/UK onsale.
He first states that contrary to uninformed opinion ‘Ticketmaster received nothing at all from the face value of the ticket itself’. Rather he estimates Ticketmaster will have received only part, approximately 50% maximum, of the ticketing service charges (set at 10% for the shows), or £11.5M which equated to approximately 4.5% of the show grosses.
But he argues, probably less. With the balance of the service fees going to others ‘which might include the promoter, agent, manager, artist and venue’.
Which could equate to something like this:
© TJ Chambers
Mark also welcomes anyone who ‘wants to break cover and reveal the actual amounts’ and says that comments on his post are open, and that you can even do so anonymously.
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Stupidest deal …
Separately, the reporting of the recent Lyte collapse included a reference to ‘the stupidest deal of all time’ (https://www.theticketingbusiness.com/2024/09/23/lyte-initiates-sale-process-designed-to-clear-unsecured-debts/).
But some readers have since claimed that Lyte’s acquisition of the Festicket + Event Genius assets whilst unfortunate, didn’t achieve top-ranking in ’Stupidest Ticketing Deal of All Time’.
Other nominees include:
1/ Pandora Acquisition of Ticketfly (2015):‘Game changer’: Pandora confirms $450m acquisition of Ticketfly – https://www.musicbusinessworldwide.com/game-changer-pandora-confirms-450m-acquisition-ticketfly/
In order to differentiate itself from Apple Music and Spotify, Pandora offered $405M in cash and stock to the then-emerging ticketing platform in a ‘game-changing’ move.
However, the unique combination of ‘internet-radio’ and ticketing challenger didn’t quite evolve as expected. So, …
2/ Eventbrite Acquisition of Ticketfly (2017): Eventbrite Acquires Ticketfly from Pandora for $200 Million – https://www.billboard.com/pro/eventbrite-buys-ticketfly-pandora-200-million/
During Pandora’s brief ownership the value of Ticketfly was first downgraded to $355M and then Eventbrite acquired it for $200M. Describing at the time ‘immense alignment’ and the opportunity ‘to expand Eventbrite’s global footprint in music’.
Since then, the company has terminated the Ticketfly-tech, moved away from the fiscal machinations of the live music sector, and orientated more towards long-tail creators with a focus on self-service ticketing. And a market cap of $254M at time of press.
3/ Ticketmaster Settlement/Acquisition of Songkick Assets (2018): Ticketmaster Settles Songkick Lawsuit for $110M – https://www.billboard.com/pro/ticketmaster-songkick-settle-lawsuit-110-million/
Not a straightforward ticketing acquisition, but as part of a settlement ‘to resolve charges that it intruded into the computer system of one of its competitors’, Ticketmaster paid a $10M fine and then ‘acquired some of Songkick’s remaining technology assets and patents for an undisclosed sum’ totalling $110M (https://www.nytimes.com/2020/12/30/arts/music/ticketmaster-songkick-criminal-case.html). Messy.
4/ Viagogo Acquisition of StubHub (2019): viagogo Acquires StubHub from eBay for $4.05 Billion – https://www.ebayinc.com/stories/news/viagogo-acquires-stubhub-from-ebay-for-4-05-billion/
This one was described by many including Forbes (https://www.forbes.com/sites/noahkirsch/2020/05/27/worst-deal-ever/) as Worst.Deal.Ever.
Post-pandemic and with a (delayed) but imminent IPO this may in fact not be such a bad deal for the bankers, investors, and scalpers.
Feel free to nominate other deals …
And circling back to Lyte, do check out the anonymous comments section of ‘Lyte is still offline: Latest Updates and Impact on Ticketing (https://www.hypebot.com/hypebot/2024/09/lyte-is-still-offline-is-it-out-of-business.html) on Hypebot – alleged solicitation of prostitutes, promoters scalping their own tickets, conspiracy to defraud clients and customers… Shock! Horror!
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Until next time.
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TJ_Chambers 