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Ridiculous lawsuit of the week: TM sued over Hamilton ticket fiasco

Hit musical Hamilton has put audiences into a frenzy around the world. However, no musical lover has been left quite so frenzied as Texas lawyer Joshua Davis, who is suing Ticketmaster for damages after being refused a refund for his mistakenly purchased Hamilton tickets.

Davis says he intended to buy three tickets for 14 or 15 March to see the musical, which is based on the life of American founding father Alexander Hamilton. The tickets were a present for his eldest daughter’s 12th birthday on 9 March.

Yet, the tickets purchased were dated 17 January. The lawyer claims that the date changed after he clicked the “back” button on his browser. Noticing the change, Davis believed to have terminated the purchase, but his card was charged US$2,325.50 for three tickets on the incorrect date.

Davis contacted the ticketing giant immediately after the mistake, waiting on hold for a “prolonged” period of time before speaking to a resolution specialist. TM refused to exchange the tickets for others on the intended date, or to issue a refund. The solution offered was resale through the Ticketmaster website, with an additional administrative fee.

“Ticketmaster’s position within the marketplace constitutes a monopoly on the lawful sale of tickets”

The company instructed Davis he was not to sell the mistakenly purchased tickets for any less than the price he paid for them, “artificially inflating ticket prices and impairing plaintiff’s ability to mitigate his damages and sell his tickets.”

Davis is now suing the ticketing corporation for fraudulent inducement and breach of contract. A court document obtained by Above the Law sets out the case:

“Not only did Ticketmaster’s website fail to respond to Davis’s attempt to cancel the charge, but Ticketmaster failed to refund the most basic of internet browsing errors literally minutes after the mistake is identified.”

“Furthermore, Ticketmaster’s position within the marketplace constitutes a monopoly on the lawful sale of tickets, specifically Hamilton tickets, giving Ticketmaster an unlawful position as a monopolist that can abuse consumers.”

The company has 50 days to respond to Davis’s claims.

 


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Nissen assets seized over $120m ticket ‘scam’

A New York judge has ordered the seizure of cash, property, shares and other assets from a ticket broker who allegedly conned investors out of US$32 million to prop up a “basic yet audacious” ticket-selling scam.

Jason Nissen and eight of his companies are accused of funnelling more than $120m through a ponzi scheme in which investors were promised “impossibly high returns” on resold tickets for events including Broadway musical Hamilton, Adele’s Adele Live 2016/2017 world tour, the Super Bowl and several other sporting events. In reality, allege prosecuting lawyers Morrison Cohen, “the ‘returns’ on the ticket sales were illusory, financed by cash infusions from new investors who were told their money would be used to purchase tickets for resale”.

The two investors who brought the lawsuit, Taly USA Holdings and SLL USA Holdings, said in the initial complaint they have been “damaged in an amount to be determined at trial, but believed to be in excess of $25m, plus interest”.

According to the complaint, Nissen confessed he had faked financial documents in order to secure investment from Taly and hide the scam from other investors. “They’re inflated numbers,” he allegedly told Taly’s Yaron Turgeman in a phone conversation. “We really had those events and really sold the tickets and they’re inflated, you know, two- to three-fold depending on how it was.”

In a court order yesterday, judge O. Peter Sherwood authorised New York sheriffs to seize five of Nissen’s bank accounts, his stocks and shares in two companies (New World Events Group and National Events of America) and two properties, both in New York, with all monies held until the conclusion of the case.

“The ‘returns’ on the ticket sales were illusory, financed by cash infusions from new investors”

In addition, Nissen is forbidden from making “any sale, assignment or transfer” or property or money “in which the defendants have an interest as will satisfy $25m” to any person other than a sheriff.

While the case continues, Sherwood says he believes the Taly and SSL “have a cause of action for a money judgment against the defendants for no less than $25m” and that “plaintiffs are likely to succeed”.

Nissen’s National Event Company (NEC) was part of the National Association of Ticket Brokers (NATB), roughly equivalent to the Association of Secondary Ticket Agents (ASTA-UK) in the UK, prompting criticism from some outlets about the association’s effectiveness in policing its members.

In a response provided to TicketNews, NATB says the criticism is unfounded, suggesting it is “outlandish […] to suggest that our trade association should have known about it and taken measures about it before law enforcement did”.

NEC’s website was still up as late as yesterday, although it now shows an “under construction” page. National Event Holdings has reportedly filed for bankruptcy.

Hamilton last summer became the most expensive ticket in Broadway history after producers raised the price in response to touts taking a reported $30,000 out of every show.

 


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Google drawn into secondary ticketing controversy

Internet giant Google has been dragged into the ongoing debate over secondary ticketing in the UK, coming under fire from lawmakers for allegedly accepting advertising money from sites listing tickets fraudulently.

Nigel Huddleston MP – a member of the British parliament’s Culture, Media and Sport (CMS) Committee, which is leading an inquiry into ‘ticket abuse’ – says he believes many ticket resale sites regularly violate Google’s AdWords policies on misrepresentation, despite spending as much as £15 per click to appear at the top of its sponsored search listings.

Referencing Tuesday’s evidence session, in which MPs heard about non-existent tickets listed on Viagogo for the musical Hamilton (and for which the site controversially declined to send a representative), he tells IQ: “I was concerned – as were other members of the committee – to discover a Viagogo ad for tickets to Hamilton on Google, as highlighted by John Nicolson MP, and my understanding is that it would breach Google’s existing policies…

“I suspect other similar ads by secondary sellers may also breach such rules.”

Stuart Galbraith, founder and CEO of promoter Kilimanjaro Live, highlights how Google recently agreed to stop accepting advertising from companies offering pirated music and films and expresses his hope that a similar agreement is brokered in future to stop AdWords being bought by ticketing “companies which are defrauding customers”.

Huddleston says he has already asked Google to clarify its position on the removal of speculative and fraudulent ticket listings. “I do know that Google are generally quite quick at removing ads that breach their own rules and guidelines,” he explains, “but often the breach needs to be brought to their attention before they do so.

“We have a defined limit and the secondaries know that, so they outbid us every single time”

“I have written to Google to ask them to look into this and clarify the situation, and am awaiting a response.”

Reached for comment, a Google spokeswoman told IQ: “We have a set of strict policies which govern what ads we do and do not allow on Google. We do not allow fraudulent or misrepresentative ads, and when we discover ads that break our policies, we quickly take action.”

While the CMS Committee deliberates over further regulation of – and Google’s role in – the UK secondary ticketing sector, FanFair Alliance is advising ticket-buyers to avoid search engines altogether.

In its recently released 10 tips for ticket-buying guide, the anti-touting group tells fans: “Don’t trust search engines. Increasingly, search engine results for concerts and festivals are dominated by the big secondary ticketing websites […], all of whom spend big money to top the rankings. We advise that you ignore search engines and go straight to the artist website. This is where you should find definitive information about ticket sales and the authorised ticket agents.”

Galbraith also illustrates how promoters and primary-only ticket agencies, lacking the budget of the ‘big four’ secondary ticketing sites – Viagogo, StubHub and Ticketmaster’s Seatwave and Get Me In! – are struggling to make themselves visible on the world’s most-used search engine.

“It’s an auction,” he tells IQ. “The people that pay the most go at the top.

“We do not allow fraudulent or misrepresentative ads, and when we discover ads that break our policies we quickly take action”

“They’re [secondary sites] regularly having to pay £10–£15 – and the reason they’re happy to do is that is because their margins are huge.”

Galbraith says the most Kilimanjaro – a promoter which, he revealed earlier this month at ILMC, is frequently left with as little as 30% of a show’s ticket inventory, with the venue holding onto the rest – can pay is around £1 per click, “otherwise you’re spending more than you’re making”. Resale sites, on the hand, can afford to “pay £10 [per click] if they’re making £500” on a ticket.

While that £10–15 figure is generally only around a hot on-sale, IQ can reveal the major secondary sites are still spending up to £3 cost per click (CPC) on Google AdWords for tours which have been on sale for some time and have long sold out of face-value tickets.

To beat Viagogo to the top of Google’s search results for “Ed Sheeran show dates”, for example, would cost in excess of £2.75 per click – even without any guarantee of conversion into a ticket sale.

“We have a defined limit [on how much we can spend on AdWords], and the secondaries know that, so they outbid us every single time,” concludes Galbraith, who is a signatory to FanFair’s declaration against online ticket touts. “That’s why we’re urging fans not to use any search engine and instead go straight to the artist’s, venue’s or promoter’s site.”

 


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Touts force most expensive-ever Hamilton’s hand

Hamilton now has the most expensive premium seats on Broadway, as the producers of the Grammy Award-winning musical make efforts to combat the number of tickets finding their way into the hands of touts.

As IQ reported in May, at least US$30,000 from every show – that’s, based on eight shows per week, $240,000 a week or almost $12.5 million a year – was going to ticket resellers, and in response producers were reportedly considering doubling the cost of premium tickets to $995.

The New York Times reports that Hamilton has settled on an increased price of $849, giving it the distinction of having by far the most expensive ticket in Broadway history (the previous record, $477, was held by The Book of Mormon.)

Lead producer Jeffrey Seller said he got to $849 “by continually monitoring the secondary market and finding out where the average is. If I’m at $849, I think we may succeed in taking the motivation out of the scalpers to buy those tickets.”

“In some ways, we’re taking from the rich to give to the poor”

Producers are, however, also making 25 more seats available in the show’s ‘Ham4Ham’ lottery, which currently offers 21 seats for $10 in a same-day draw.

“In some ways, we’re taking from the rich to give to the poor,” lead producer Jeffrey Seller told the Times. “because there’s no question those premiums are subsidising those $10 tickets.”

Primary tickets for Hamilton – a hip-hop musical about the life of Alexander Hamilton, the Nevis-born founding father of the United States, currently running at New York’s Richard Rogers Theatre – are sold out until at least January 2017.

Seller told The New York Times Magazine in April that a broker had bought 20,000 tickets to the show using an automated ticket bot. New York attorney-general Eric Schneiderman announced later that month that he is to introduce harsher penalties for companies found to be snapping up hard-to-find tickets with the illegal software, and there are currently two pieces of sister legislation – the Boss Act and the Bots Act, the latter of which deals specifically with ticket bots – making their way through the US House of Representatives’ Energy and Commerce Committee.

 


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Hamilton touts pocket $240,000 a week

The producers of Broadway musical Hamilton are considering doubling the cost of premium tickets to the show in response to high levels of touting.

At least US$30,000 from every show goes to ticket resellers instead of producers, cast and investors, says economics professor Matt Rousu – which, based on eight shows a week, means touts are pocketing $240,000 a week, or almost $12.5 million a year, from the Grammy and Tony Award-winning musical.

Producers “are having discussion after discussion about what they should do about this,” Mitch Weiss, a Broadway manager and analyst, tells Bloomberg. “They don’t want to charge people that much to see a show. But if someone is going to make money, it ought to be the people who work on it.”

“They don’t want to charge people that much to see a show. But if someone is going to make money, it ought to be the people who work on it”

The proposed increase in price would see premium tickets set theatregoers back $995.

Primary tickets for Hamilton – a hip-hop musical about the life of Alexander Hamilton, the Nevis-born founding father of the United States, currently running at New York’s Richard Rogers Theatre – are sold out until at least January 2017.

Lead producer Jeffrey Seller told The New York Times Magazine in April that a broker had bought 20,000 tickets to the show using an automated ticket bot. New York attorney-general Eric Schneiderman announced last week that he is to introduce harsher penalties for companies found to be snapping up hard-to-find tickets with the illegal software.