Lawsuit filed against Viagogo over refunds
Secondary ticketing platform Viagogo is the target of a class-action lawsuit for allegedly retroactively axing its full cash refund guarantee amid the pandemic, depriving consumers of the refunds they are entitled.
The Florida-based claimant alleges that she paid US$410 for tickets to see Tool on 19 April but Viagogo refused to refund her, despite its guarantee which promises to fully refund a customer who bought tickets to an event that was cancelled.
The complaint alleges that Viagogo “wrongly refuses to classify events as ‘cancelled,’ allowing it to maintain dominion and control over even more funds which it has no legal right to possess or use for its own business purposes.”
It goes on to allege that the company is attempting to force consumers to suffer losses it should be covering due to its cash-back guarantee on events that are cancelled.
“To avoid financial losses due to the Covid-19 pandemic, [Viagogo] has unilaterally and unconscionably changed its policy”
“To avoid financial losses, and potential future losses, due to the Covid-19 pandemic, Defendant has unilaterally and unconscionably changed its longstanding policy, including for customers who purchased tickets while Viagogo actively promoted and promised its Viagogo Guarantee, to instead leave its customers holding the bag,” the lawsuit claims.
The lawsuit looks to represent Florida residents who used Viagogo to buy tickets to any event that was cancelled or constructively cancelled due to the Covid-19 pandemic, and who have not been issued a refund.
Also facing legal action is Eventbrite, which is accused of depriving fans of refunds for “indefinitely postponed” events.
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Could vouchers become a trap for promoters?
Live music markets in Europe have looked to vouchers as a cure for their coronavirus-inflicted crises. The effect of this type of medicine seems to be based upon a presumption that ticket owners will hold on to their rolled-over tickets, or use vouchers for another show instead, or wait for cash refund until late 2021.
Well, what if they don’t?
Voucher schemes have turned millions of ticketholders into promoters’ creditors. They can be divided into three sub-groups: Those who can afford it; those who can’t really but were not given a choice; and those whose present ambivalence may well turn into anger with passing time.
So far, the economic prognosis is that the effect of the corona crisis has not yet fully revealed itself and it will not be until three to six months from now when it will really hit hard, once various government support and help programmes are over.
Everything points to this crisis being the strongest in decades. The natural reaction is a great deal of uncertainty and, in this situation, the live music industry in countries using voucher schemes has sent a very clear message – if worse comes to worst, it will be the customers who will bear the load.
Ticketholders might be facing situations where they need access to at least some part of the cash spent on tickets to cover their daily needs. As their chance to get an immediate, full refund from promoters is either restricted or made temporarily impossible, then they might be tempted to offload what they have in the only way possible – on the secondary ticketing market.
Voucher schemes have turned millions of ticketholders into promoters’ creditors
Desperate times call for desperate measures and ticketholders might have to give away their tickets as quickly – and therefore cheaply – as possible. If this happens to a significant extent, then it could affect the sales of the postponed events in question, as well as newly announced gigs.
Nowadays, promoters postpone their shows hoping for the best. Now, if it is a sold-out show, then one might worry only about lowering the profit margin, but if there is still some way to go to break even, then the promoter has every reason to worry.
Postponed shows were negotiated at the peak of the conjecture cycle with ticket prices reflecting both the expected buying power projected into selected capacities, as well as accordingly set fees and subsequent other costs.
The upcoming 2021 season will be tough. Experts’ projections quoted in media see a decline in revenue of more than 50% for the leisure sector next year in some markets. Better than the current drop of 80-90%, but hardly a full recovery. By the nature of things, it can be reasonably expected that the lost revenue will be distributed in an uneven manner, show-per-show.
The highest risk lies with events that have not yet reached breakeven and that have found themselves in a 2020 position that they probably aim to roll over to 2021. If an event, traditionally a festival, has tickets scaled from an early-bird rate to an on-the-door price and is now somewhere in the middle, then promoters will probably follow up the sales from the point an price that they stopped on prior to coronavirus, and offer a similar or identical line-up (value) in return.
In cases where the contracts were not renegotiated for a lower guarantee, then promoters will have both prices and costs set on 2020 expectations for the next season, which might deliver lower revenue. Maybe upwards of 50% lower.
It is not lowered income that breaks promoters’ neck, it’s the unpayable bills accumulated from previous commitments that do it
Additionally, we need to account for the risk of cheap tickets on the secondary ticketing market. If tickets are available for less that than the official presale on these sites, either for the very same event, a similar event or event in the same time period, or a better event, then it will likely redirect the cash flow from official presales and further lower the promoter’s future revenue.
If a market revenue goes down by 50 % and the remaining potential half is further affected by cheap resales, how much can reasonably be expected to be left over? If such a scenario becomes reality, then the expectations of future turnover might not (sufficiently) materialise, leaving the promoter with obligations to fulfil with insufficient funds.
Not to mention, that standard competition will continue, and new shows will have the advantage of a wow-effect over postponed and rolled-over events. Also, corporations in some countries are likely to come out of the crisis with loaded cash-flow from temporarily non-refunded tickets for cancelled arena shows with a limited time to reinvest it.
In this light, it might seem that the intention to lower artist guarantees by 20 % in 2021 is merely cosmetics.
If it is the case and all options are still on the table then, in some ways, it is not a bad option to leave in 2020 what belongs in 2020: ask agents to return paid advances, refund ticketholders or press on with substitute events and enter the next year without a ball and chain.
Generally speaking, it is not lowered income that breaks promoters’ neck, it’s the unpayable bills accumulated from previous commitments that do it.
Borek Jirik has worked as a show and festival promoter and arranged technical production for various arena and stadia tours. He now consults for live events, focusing on quality management, safety plans, studies, publishing and research. He was an initiator and editor of the Comprehensive Guide for Event Production and Organisation in the Czech Republic, 2018.
Eventbrite facing legal action over refund policy
Eventbrite has become the latest ticket seller to be hit with a lawsuit over its alleged non-payment of refunds for cancelled or postponed events.
In a consumer class-action complaint filed on 4 June in the US district court for northern California, ticket buyers Sherri Snow, Anthony Piceno and Linda Conner accuse Eventbrite of “deceptive practices relating to its sale of live events tickets and its refusal to provide refunds for live events that have been canceled, rescheduled and/or postponed.”
According to the plaintiffs, by “shift[ing] responsibility” for issuing cash refunds to event organisers, Eventbrite is in violation of section 22507 of California’s Business and Professions Code, which requires that the “ticket price of any event which is canceled [sic], postponed, or rescheduled shall be fully refunded to the purchaser by the ticket seller upon request.”
“After the coronavirus outbreak forced the cancelation or postponement of most large events and public gatherings, Eventbrite has consistently refused to allow for refunds for canceled, postponed and/or rescheduled events, including when events are ‘indefinitely’ postponed,” reads the complaint.
“Instead, Eventbrite has tried to shift responsibility to event organizers, allowing them to refuse refunds for cancellations, postponements and rescheduled events.”
“Eventbrite has consistently refused to allow for refunds … including when events are ‘indefinitely’ postponed”
“At best,” the complaint explains, “Eventbrite has urged some organizers to ‘make good’ when events are canceled, postponed and/or rescheduled” between 15 March and 15 May.
This, the plaintiffs say, does not go far enough, because it allows promoters to offer credit or vouchers for future events “no matter when in the future the event might occur or how much or when the credit might apply”.
While many European concert organisers have been empowered to offer ticket vouchers instead of cash refunds, no legislation of the sort exists in California or the wider US.
Among other forms of redress, the trio seek monetary damages, an order that Eventbrite will cease the “unlawful, deceptive, fraudulent and unfair business practices” alleged in the complaint, and legal costs, to be determined at a jury trial.
News of the lawsuit, revealed in the company’s latest filing with the US Securities and Exchange Commission (SEC), comes as Eventbrite records a month-on-month increase in ticket sales for the first time since the Covid-19 pandemic hit in March.
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Refunds may lead to mass bankruptcies, warn EE promoters
The absence of a scheme to protect the concert industry from the financial impact of issuing refunds en masse could leave to a wave of insolvencies, leading Estonian promoters have warned.
In many countries in Europe, including Germany, Portugal and Italy, concert organisers are being allowed to offer ticket vouchers (ie credit) in lieu of cash refunds for cancelled events, while others, including Estonia’s Baltic neighbours, have extended the window in which refunds must be given (typically a year).
“In other countries, such as Latvia and Lithuania, solutions have been found,” says Live Nation Estonia’s Mart Eensalu, “and longer periods for the repurchase [refund] of tickets have been granted. But it hasn’t been done here.”
Estonia – which, along with most Europe, put the brakes on live events in March – ended its state of emergency and began easing coronavirus lockdown restrictions on 17 May, with shows of up to 1,000 people permitted from 1 July.
That 1,000-capacity limit (or 500 for indoor shows), of course, precludes major live music events, such as Rammstein’s highly anticipated performance in Tallinn, originally scheduled for July – for which 62,000 people will now be asking Live Nation for refunds, writes the Baltic Times.
“We are effectively jobless, but we must keep our offices open”
Tanel Samm, of promoter Monster Music, says the Estonian government is not taking concert professionals’ concerns seriously. “The money entrusted to us by customers who have bought tickets does not belong to us if the event has not taken place,” he tells the paper. “We are effectively jobless, but we must keep our offices open to bring the rescheduled events to people next year.”
Samm says authorities must “finally enter into a dialogue with us” in order to ensure the survival of much of Estonia’s live music industry.
That long-overdue help may finally be coming in the form of culture minister Tonis Lukas, who recently met with promoters to discuss a way forward for the sector, Postimees reports.
Lukas urges both concertgoers and Estonia’s consumer watchdog, the Consumer Protection and Technical Regulatory Authority, to be patient with concert promoters. “My call […] is for us to be prepared to give concert organisers just over a year to return the money,” he says, “because when a concert is postponed by a year, organisers will be able to return to a normal cash flow then and then pay refunds.”
According to the Baltic Times, current Consumer Protection and Technical Regulatory Authority guidelines say customers should receive refunds for cancelled events within a month.
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Ultra Music Festival sued over no-refund policy
Ultra Enterprises, the company behind Miami’s Ultra Music Festival (UMF) and Ultra music events globally, has been hit with a lawsuit over its alleged refusal to offer cash refunds to those with tickets for the cancelled UMF 2020.
The 2020 festival, scheduled for 20–22 March in Miami, Florida, was called off in early March, becoming one of the first casualties of the Covid-19 pandemic that went on to claim almost the entire festival summer.
The proposed class action, filed in the US district court for southern Florida, accuses Ultra of conversion and unjust enrichment. Plaintiffs Samuel Hernandez and Richard Montoure claim the company’s insistence that they must hold onto their tickets and transfer them to UMF 2021 or ’22 is based on “impermissible ticket contract terms”, according to Law360; Ultra’s terms and conditions say it reserves the right to issue a full or partial refund, or no cash refund at all.
This, argue Hernandez and Montoure’s lawyers, means UMF – by reserving the right to keep money paid for tickets regardless of whether it puts on the show – is “essentially (and impermissibly) rendering its obligations under the [T&Cs] illusory, and the agreement itself an unenforceable unilateral option contract.”
“We do not believe Ultra Music Festival has the right to shift the burden of this extraordinary crisis onto its customers”
Hernandez sought refunds on four of six tickets he bought, for a total of US$3,000, while Montoure wanted a refund of two three-day passes he purchased for about $1,000.
“We understand that the Covid-19 pandemic has impacted every part of the global economy but we do not believe that gives the Ultra Music Festival the right to shift the burden of this extraordinary crisis onto its customers, who, in some cases, paid hundreds of dollars to attend this festival,” Joe Sauder of Sauder Schelkopf – which is also suing South by Southwest on behalf of out-of-pocket ticketholders – tells Rolling Stone, “and now the Covid-19 pandemic has or will preclude them from ever using any credit.
“We look forward to seeking to recover cash refunds for our clients and the class members.”
In addition to Ultra and South by Southwest, several ticketing companies are also facing legal action over their refusal to offer cash refunds for cancelled shows, with SeatGeek and StubHub the target of one and two legal actions, respectively.
SeatGeek sued over alleged U-turn on refunds
A US SeatGeek customer has filed a class-action lawsuit that accuses the secondary ticketing site of changing its refund policy mid-way through the Covid-19 pandemic.
The suit, which alleges that SeatGeek rescinded its money-back guarantee amid the widespread cancellation of live events, comes three weeks after similar legal action was initiated against ticket-resale rival StubHub, which is also offering credit instead of cash refunds for cancelled or postponed events.
In a filing in a Manhattan court, William Trader says New York-based SeatGeek – which also has a significant European presence, where it primarily focuses on primary ticketing for arts venues – changed the terms of its ‘buyer guarantee’ from a full refund to “a credit to be used for a future purchase to be determined in SeatGeek’s sole discretion”.
“Defendant has sought to surreptitiously shift its losses onto its innocent customers”
Trader had purchased two tickets to a now-cancelled Dead and Company concert in Chicago, reports the New York Post.
“In the midst of the greatest public health and economic crisis in living memory, defendant has sought to surreptitiously shift its losses onto its innocent customers, furthering the financial hardship endured by people across the country,” says Trader’s lawyer, Nicholas Coulson.
SeatGeek has been contacted for comment.
LN offers US fans 150% credit on rescheduled shows
Fans who have tickets to postponed Live Nation shows in the US can opt to exchange it for a voucher worth 150% of the original value, make a donation to health workers, request a full refund and more under the new Rock When You’re Ready programme.
Following Ticketmaster’s clarification of its refund policy in the United States last week, the ticketer’s parent company Live Nation has laid out a number of options for fans with tickets for postponed events.
Under the programme, which starts from 1 May, ticketholders can retain their tickets for the rescheduled date or swap it for Concert Cash – credit for use on the Live Nation site worth one-and-a-half times the original ticket price.
Fans can also make a donation to frontline health workers through the Hero Nation programme.
Full refunds are also available, if requested within 30 days of the announcement of rescheduled dates. Tickets to cancelled shows will be refunded automatically unless fans voluntarily opt in to other programmes.
Live Nation has laid out a number of options for fans with tickets for postponed events
AEG Presents – along with Live Nation one of the big two global concert promoters – has announced a similar plan, offering a 30-day window to receive refunds for postponed events and automatic refunds on cancelled events, starting from 1 May.
According to Ticketmaster president Jared Smith, 30,000 events it has sold tickets for have been postponed or cancelled due to coronavirus. Of these, 12,000 have been cancelled outright and around 5,000 rescheduled. Promoters are working to reschedule the remaining 14,000 shows.
The question of refunds has been hotly debated, as the coronavirus crisis takes its financial toll on the live sector.
In Europe, a number of industry associations have lobbied for the option for organisers to offer ticket vouchers, with governments in Germany, Italy, Poland and Portugal introducing voucher schemes, and the Dutch national consumer protection agency offering guidelines to sectors wishing to offer credit instead of refunds.
Ticketmaster clarifies US refund policy
Ticketmaster has moved to clarify its refund policy in the United States, amid reports of fans struggling to secure refunds on tickets for cancelled events.
As reported by the New York Times, some consumers in the US have accused the ticket agency of changing its policies to mitigate cashflow issues caused by the coronavirus pandemic. According to the Times, “[w]hereas “a few weeks ago”, the wording on the Ticketmaster website “said that people can get refunds ‘if your event is postponed, rescheduled or canceled’ [sic], now it only lists cancellation as a basis for getting your money back, though it suggests there may be other circumstances in which refunds might be considered.”
However, says TM, its refund policy in US has remained the same throughout the crisis – promoters, many of whom are working to reschedule their events, are in charge of ticket monies and the refund process – and the new wording aims to clarify that policy. (Similarly, IQ understands, in other markets, such as Denmark, the refund procedure remains the same as pre-coronavirus).
A statement from the company reads: “Ticketmaster serves as the sales platform for event organisers worldwide. Our standard practice is for our clients to hold the cash from their ticket sales. Clients using our platform also retain the ability to set individual policies for their postponed or rescheduled events.
“Typically, event organisers have had the flexibility to offer refunds for virtually all postponed and rescheduled events. However, the unprecedented volume of over 30,000 events impacted to date, coupled with continued uncertainty over setting new dates while awaiting clearance from regional governments, has led to event organisers needing additional time to reschedule their events before deciding to offer refund options.
“Clients using our platform retain the ability to set individual policies for their postponed or rescheduled events”
“As of today [16 April], over 11,000 events, including over 4,000 postponed sports, concerts and arts events, have already authorised refunds. While we cannot guarantee all event organisers will offer refunds on their rescheduled events, we anticipate the vast majority will make a refund window available once new dates have been determined. In addition, Ticketmaster continues to issue refunds for all cancelled events.”
On the promoter side, AEG Presents – with Ticketmaster parent company Live Nation one of the big two global concert promoters – has also put out a statement explaining its refund policy, saying it will offer customers a 30-day window to receive refunds for postponed events, starting from 1 May.
Ticketholders for cancelled AEG-promoted events, meanwhile, will automatically receive a refund, a company rep explains.
Similarly, “Live Nation’s plan is to continue offering an opportunity for refunds on all of its rescheduled shows as new dates are set,” an LN spokesperson tells the Times. “We anticipate those windows will begin to open up on an event-by-event basis in the next few weeks.”
The clarification from Ticketmaster follows secondary ticketing platform StubHub being slapped with a US$5 million lawsuit over its refusal to issue cash refunds for tickets resold on its site.
In Europe, many governments are backing promoters’ requests to be able to offer credit or vouchers in lieu of refunds, with the German live business the latest to be given the go-ahead. Cash refunds, however, must be given if they are specifically requested.
Brazilian promoters to offer credit for shows
The Brazilian association of event promoters Abrape (Associação Brasileira de promotores de eventos) has welcomed new measures allowing promoters to offer credit to events that are rescheduled or cancelled due to the Covid-19 pandemic.
Under the conduct adjustment agreement, reached between Abrape, the national consumer secretariat of the Ministry of Justice (Senacon), the national association of consumer prosecutors (Mpcon) and the federal district attorney’s office, promoters will not be obliged to refund the customer, provided they ensure a rescheduled date for the event or offer credit or discount for use in the purchase of other services.
If an event is cancelled outright and the promoter is unable to offer credit, a refund must be provided to the customer within six months of the cancellation announcement. However, the promoter can keep up to 20% of the ticket price “to reduce any unrecoverable expenses”.
“The initiative aims to guarantee consumers’ rights, without disregarding the effects caused by cancellations of events and shows in the country”
Promoters are given a range of options to offer customers in the case of postponed events. Ticketholders may use the ticket for the rescheduled date, transfer it to a third party, exchange it for another event by the same promoter (not paying a price difference if it is up to 10%), or request credit to use on another of the promoter’s event within 12 months.
According to the agreement, promoters must have dates for rescheduled shows within six months of the pandemic ending, with all postponed events to happen within a year of its end. They must also ensure the rescheduled event contains “the same main attraction” as the original and, if replaced, that it be by others “of the same musical style and status”.
A ticketholder may only request a refund for a postponed show if they can prove that they cannot attend the new date.
“The initiative aims to guarantee consumers’ rights, without disregarding the effects caused by cancellations of events and shows in the country,” says Abrape president Doreni Caramori.
Germany introduces ticket voucher scheme
The government of Germany confirmed today (8 April) it will allow promoters to offer customers credit instead of refunds for cancelled events, becoming the latest country to introduce a voucher scheme to shield its live sector from the financial impact of the coronavirus.
A news release from the German federal government explains: “According to existing laws, holders of tickets can request reimbursement of the entry and service fees they have already paid. [However], many operators currently have no new income. If they had to reimburse fees for all canceled events at short notice, the existence of many of them would be threatened. A voucher solution, therefore, could be of great help.”
“A wave of bankruptcy would also likely mean that claims for reimbursement could no longer be made,” adds the announcement.
“A wave of bankruptcy would mean that claims for reimbursement could no longer be made”
As reported by IQ on Friday, Germany was one of a number of European states considering legislating in favour of ticket vouchers and/or an extended refund grace period – measures which have already been introduced in countries such as Italy and Poland.
For all tickets purchased before March 8, fans who wish to receive credit in lieu of a cash refund (refunds will still be available for those who need them due to their “personal situations”) will receive a voucher that expires at the end of 2021. If the voucher is not redeemed by that date, the organiser of the event must refund its value.
Bremen-based CTS Eventim, Europe’s biggest ticket seller, welcomes the introduction of a voucher scheme, saying the move represents a lifeline to the corona-hit German live music industry.
“The voucher solution… gives promoters the vital liquidity they need to continue operating”
“We welcome the initiative of the federal cabinet to enact a voucher scheme for cultural, concert, sports and leisure events,” says the company’s CEO, Klaus-Peter Schulenberg. “Culture is systemically essential, and the bill proposed today by the government supplements the current contract law governing events with urgently needed provisions to mitigate the financial impacts of the Covid-19 pandemic for promoters, and thus for the entire cultural sector in Germany.
“The resolution is a very important step towards preserving cultural diversity in Germany. The voucher solution is pure consumer protection at the same time, because it gives promoters the vital liquidity they need to continue operating as going concerns during and beyond the coronavirus crisis. Consumers are thus protected from what would otherwise be unavoidable losses due to insolvency.”