Eventbrite IPO investor lawsuit dismissed
Eventbrite has beaten a class-action lawsuit that accused it of misleading investors at the time of its September 2018 flotation.
As previously reported, the suit – filed on behalf of claimants who purchased Eventbrite stock in the company’s initial public offering (IPO) at US$23 a share – alleges the ticketing company deceived potential buyers in its IPO registration statement by declaring that the acquisition of Ticketfly “had a positive impact on net revenue growth” in the third quarter of 2017, when in fact the migration was progressing more slowly than stated, delaying integration and negatively affecting growth.
San Francisco-based Eventbrite denied the allegations, its lawyers calling the case without merit and saying the complaint contains no “facts suggesting that Eventbrite made any false or misleading statements of material fact”.
On Tuesday (28 April), California judge Edward Davila ruled in favour of Eventbrite, according to Law360, granting the company’s bid to dismiss the suit in its entirety, while giving the investors a chance to amend their complaint by 24 June to make it more specific.
Judge Edward Davila ruled in favour of Eventbrite, granting the company’s bid to dismiss the suit in its entirety
“Plaintiffs’ vague allegations that the Ticketfly acquisition was ‘delayed’, ‘costly’ and that the integration missed ‘key features’ are insufficient to show that defendants ‘affirmatively’ created an impression of a state of affairs that differs in a material way from reality”, said Davila, adding: “In fact, a closer inspection of Eventbrite’s SEC filings appears to belie plaintiffs’ claims that the company projected that the Ticketfly integration was going ‘smoothly’”.
The suit was filed following a plunge in Eventbrite’s share price, from a high of over $32 to less than $16 in June 2019.
In common with other live entertainment companies, Eventbrite shares have plummeted further as a result of the ongoing Covid-19 pandemic, with stocks trading at just shy of $10 at press time, up from a low of $5.86 on 3 April.
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Eventbrite confirms commitment to live
In a month that saw San Francisco-based event management and ticketing company Eventbrite lay off 45% of its staff, including many in its music division, the company’s founders have stated that they are not intending to pivot away from music.
The layoffs, which affected 500 employees, form part of a $100 million coronavirus cost-cutting plan and were carried out due to “the unprecedented shutdown of the global economy”, according to Eventbrite CEO Julia Hartz.
In response to reports that the company’s music division was particularly hard hit by the money-saving measures, Hartz told Billboard: “We are not planning to exit music and we’re committed to serving independent creators,” adding, “can you imagine our country without independent live music venues?”
“We are not planning to exit music and we’re committed to serving independent creators”
Hartz states that Eventbrite is using this time to “double down” on improving its platform, adding that the company “has always had a self-service ethos”.
In 2019, almost 950,000 event organisers used the Eventbrite platform, in a year that saw net revenue increase by 12% from the year before to $327m.
The company’s 2017 acquisition of former competitor Ticketfly aimed to create a “powerhouse” for independent venues and promoters, although Eventbrite encountered some issues relating to the integration of the platform, which was completed late last year.
Ticketfly co-founder Andrew Dreskin, stepped down from his role as Eventbrite Music president in May 2019 and stayed on in an advisory role, although reports suggest he may have now departed the company completely, following a pitch to buy back Ticketfly’s assets.
Photo: JD Lasica/Flickr (CC BY 2.0) (cropped)
The decade in live: 2017
The start of a new year and, perhaps more significantly, a new decade is fast approaching – and while many may be thinking ahead to New Year’s Eve plans and well-meaning 2020 resolutions, IQ is casting its mind back to the most pivotal industry moments of the last ten years.
The memories of a turbulent 2016 were left far behind in 2017, as the concert business enjoyed a record-breaking twelve months, as the year’s gross revenue and number of tickets sold saw 2013 finally knocked off the top spot.
The success of the live business in 2017, however, was somewhat overshadowed by a number of devastating terror attacks, with the Manchester Arena bombing, the shootings at Route 91 Harvest and BPM Festival, the Reina nightclub shooting and other incidents targeting music fans.
In response to the tragedies, the live industry united and made a positive impact, in the form of the One Love Manchester and We are Manchester charity concerts and candlelit vigils and fundraising for victims of the Route 91 Harvest attack.
Elsewhere, the booking agency world continued to consolidate through 2017, with a number of acquisitions, mergers and partnerships while Live Nation welcomed several more promoters, festivals, ticketing agencies and venues to its fast-growing family.
2017 in numbers
The live music business reached new heights in 2017, with the top 100 tours worldwide generating a record US$5.65 billion, up almost 16% from the previous year.
The number of tickets sold throughout the year also saw a notable increase from the year before, climbing 10.4% to 66.8 million, at an average price of almost $4 more per ticket than in 2016, at $84.60.
Eleven tours surpassed the $100m mark in 2017, with U2 topping the year-end charts having generated $316m on their Joshua Tree tour. Guns N’ Roses narrowly missed out on $300m, grossing $292.5m on the Not in this Lifetime tour.
Coldplay came in next, as the band’s A Head Full of Dreams tour made $238m. Bruno Mars’ 24K Magic tour was also successful, grossing just over $200m, whereas Metallica’s WorldWired tour generated $152.8m.
Depeche Mode, Paul McCartney, Ed Sheeran, the Rolling Stones, Garth Brooks and Celine Dion were the other acts whose 2017 tour earnings exceeded $100m.
2017 in brief
A lone gunman attacks New Year’s revellers at the Reina nightclub in Istanbul, resulting in the death of 39 people and injuries to a further 70. Two weeks later, four are killed and 12 injured during a shooting at the BPM Festival in the coastal resort of Playa del Carmen, Mexico.
AM Only and The Windish Agency rebrand as Paradigm Talent Agency, signalling the next phase of their joint ventures, launched in 2012 and 2015, respectively.
Global asset management firm Providence Equity Partners acquires a 70% stake in Sziget Festival and reveals plans to launch eight to ten branded festivals, with James Barton, former president of electronic music for Live Nation, leading the international expansion.
AEG Live finalises negotiations to acquire New York-based promoter/venue operator The Bowery Presents.
Ticketbis, the multinational resale operation acquired by eBay in May 2016, is rebranded as StubHub, bringing to an end the Ticketbis name across Europe, Asia and Latin America.
Live Nation enters the Middle East’s biggest touring market with the acquisition of a majority stake in Bluestone Entertainment, one of Israel’s leading promoters.
Iron Maiden’s decision to use paperless tickets on the UK leg of The Book of Souls arena tour helps reduce the number of tickets appearing on secondary sites by more than 95%, according to promoter Live Nation.
Live Nation acquires a controlling stake in the UK’s Isle of Wight Festival.
The Australian leg of Adele’s Live 2017 tour makes concert history after playing to more than 600,000 people over eight stadium dates.
Sziget Festival 2017 © László Mudra/Rockstar Photographers
In the biggest primary deal so far for the world’s largest secondary ticketing site, StubHub is named the official ticket seller for Rock in Rio 2017.
Creative Artists Agency increases its investment in the Chinese market via a new alliance with private equity firm CMC Capital Partners.
Luxury Ja Rule-backed boutique event, Fyre Festival, descends into chaos on its first day, with visitors to the Bahamas site comparing conditions to a refugee camp.
22 people, including children, lose their lives after a suicide bombing at Manchester Arena, for which Islamic State terror claims responsibility. The attack targets people leaving the 21,000-cap. venue at the end of an Ariana Grande concert.
Pandora Media announces the sale of Ticketfly to Eventbrite. Despite purchasing the company for $450m less than two years ago, it sells for a package worth $200m.
AEG invests in Immortals, one of the world’s leading esports teams, with professional players in the North American League of Legends, Counter-Strike: Global Offensive, Super Smash Bros, Overwatch and Vainglory leagues. The team will now play their Los Angeles tournaments and matches at AEG’s LA Live entertainment district.
The organisers of ILMC announce the launch of the Event Safety and Security Summit (E3S), a one-day meeting focusing on security at live events.
The reality of Fyre Festival © Here_Comes_the_Kingz/Reddit
Helsinki-based Fullsteam Agency acquires Rähinä Live, whose roster includes some of Finland’s biggest hip-hop and pop artists.
Oak View Group, which counts Irving Azoff and Tim Leiweke among its founders, completes its acquisition of Pollstar, adding the US-based concert business magazine to its portfolio of trade titles.
Madison Square Garden Company makes a significant move into the esports sector by acquiring a controlling stake in Counter Logic Gaming.
Paradigm Talent Agency acquires Chicago- and California-based agency Monterey International, including its 14 agents and 200 acts.
Live Nation launches in Brazil with former Time for Fun (T4F) chief entertainment officer Alexandre Faria Fernandes at the helm.
Three quarters of staff at Function(x), the online business founded by former SFX Entertainment CEO Robert Sillerman, are effectively laid off, with the company telling investors it lacks the funds to pay them.
A sovereign wealth fund controlled by the government of Saudi Arabia, says it is forming a new SR10 billion ($2.7bn) investment vehicle in a bid to kick-start the kingdom’s entertainment sector.
Music returns to Manchester Arena as a capacity crowd turn out for We are Manchester, a benefit concert that raises funds for a memorial to the victims of the 22nd of May bombing.
The We are Manchester charity concert drew a full-capacity crowd at the 21,000-cap. arena © Showsec
A gunman kills 58 people and injures a further 546 at the Route 91 Harvest country music festival in Las Vegas. Local resident Stephen Paddock targeted the concertgoers from the 32nd floor of the nearby Mandalay Bay hotel.
WME-IMG rebrands as Endeavor, with company assets that include martial- arts promoter, UFC; ad agency, Droga5; Professional Bull Riders; the Miss Universe Organization; Frieze Art Fair; management companies, Dixon Talent and The Wall Group; and joint ventures such as Euroleague Basketball and esports championship ELEAGUE.
Ticketmaster confirms its long-rumoured expansion into Italy. The launch of Ticketmaster Italia, headquartered in Milan, follows the end of the exclusive long-term online partnership in Italy between Ticketmaster’s parent company, Live Nation, and CTS Eventim-owned TicketOne.
After 11 years in East London’s Victoria Park – now exclusive to AEG – Eat Your Own Ears’ Field Day Festival will head to Brockwell Park in South London. Live Nation’s Lovebox and Citadel are also rumoured to be moving to Brockwell Park.
Secondary ticketing websites will, from January 2018, be subject to stringent restrictions on their use of Google AdWords, as the search-engine giant cracks down on ticket resellers’ controversial use of its online advertising platform.
Leading self-service ticketer Eventbrite announces a series of new partnerships, rolling out integrations with events guide The List, festival package provider Festicket, word-of-mouth ticket sales platform Verve, and brand ambassador software Ticketrunner.
Michael Rapino, CEO of Live Nation Entertainment since 2010, will remain in his role until at least 2022 after signing a new five-year contract worth up to $9m per annum. Also re-upping are leading execs Kathy Willard, Michael Rowles and Joe Berchtold.
Primary Talent’s Dave Chumbley (1960-2017) picks up his Platinum Endurance Arthur Award at ILMC 25 © ILMC
Who we lost
Peter Rieger, founder of German promoter Peter Rieger Konzertagentur (PRK); Joseph Rascoff, business manager to the Stones, David Bowie, U2, Sting and more; ILMC’s long-time producer Alia Dann Swift; ShowSec International Ltd founder Mick Upton; Dave Chumbley, Primary Talent International director; Mary Cleary, former booker and tour manager; American singer-songwriter Tom Petty; pioneering concert promoter Shmuel Zemach, founder of Zemach Promotions; Australian country music promoter, agent and artist, Rob Potts; Linkin Park frontman Chester Bennington; Reading festival founder Harold Pendelton; Washington, DC, promoter Jack Boyle; Live Nation Belgium booker Marianne Dekimpe; rock and roll pioneer Chuck Berry.
The decade in live: 2015
The start of a new year and, perhaps more significantly, a new decade is fast approaching – and while many may be thinking ahead to New Year’s Eve plans and well-meaning 2020 resolutions, IQ is casting its mind back to the most pivotal industry moments of the last ten years.
Following on from a strong year in 2014, the live music industry in 2015 continued to go from strength to strength, with fans once again showing willingness to spend money on concert tickets.
After the success of their first all-stadia tour, British boyband One Direction embarked on another mammoth concert tour, which came in at number two on the year-end charts, despite the departure of band member Zayn Malik two months in. The tour was the beginning of the end for the band, which went on indefinite hiatus the following year.
2015 was a busy year in the live business, notably seeing the birth of Tim Leiweke and Irving Azoff’s Oak View Group. It was also the year that the Robert Sillerman’s rebirthed SFX Entertainment began to run into some serious trouble…
2015 in numbers
The top 100 worldwide tours grossed more than US$4.7 billion in 2015, up 14% from the year before but falling short of 2013’s $5bn. Ticket sales were also up, increasing by 16% to 59.7m, again lower than the 2013 total of 63.3m. The average ticket price in 2015 was down $3.30 to $78.80.
Taylor Swift was the top touring artist of the year, grossing $250.4m with her The 1989 world tour. The singer generated nearly $200m in North America alone, smashing the previous record of $162m set by the Rolling Stones in 2005.
One Direction also had a successful year with the On the Road Again tour, coming in behind Swift with year-end gross at $210.2m and selling 2.4m tickets, the most of any artist that year. AC/DC made $180m in ticket sales on their biggest tour to date, with U2’s Innocence + Experience grossing $152.2m and Foo Fighters’ Sonic Highway tour totalling $127m.
2015 in brief
Live Nation takes control of Austin City Limits and Lollapalooza promoter C3 Presents, paying a reported $125m for a 51% stake.
Austrian concert organiser Arcadia agrees a new partnership with four German companies – Four Artists, Chimperator Live, KKT and FKP Scorpio – to found Arcadia Live, a new
Live Nation agrees a joint venture with Thailand-based entertainment firm BEC-Tero. The new company, Live Nation BEC-Tero, will promote concerts by Western, J-Pop and K-Pop artists in the region, a pursuit in which BEC-Tero’s concerts division is already a market leader locally.
The Agency Group acquires UK-based electronic music agency Futureboogie, whose roster includes the likes of Bonobo, Crazy P and Nightmares on Wax.
The state of Washington passes a bill to outlaw ticket bots in an attempt to clamp down on the computer software that often prevents humans from buying seats online for concerts and sporting events. The move brings the number of states that have banned bots to 13.
A group of artists including Chris Martin, Calvin Harris, Madonna, Rihanna, Beyoncé, Jay Z, Kanye West, Daft Punk, Alicia Keys, Jack White and Nicki Minaj launch a new streaming service called Tidal, which is described as the first artist-owned platform for music and video.
The O2 arena in London announces that it has sold its 15 millionth ticket. The building, which opened in June 2007, has consistently been the most popular live music venue in the world, with research conducted by Media Insight Consulting claiming that 30% of the UK population has attended The O2 complex at least once.
ILMC launches the International Festival Forum, which aims to help strengthen the relationship between event organisers and agents. The London-based event is set to feature partner agencies such as Coda, The Agency Group, Primary Talent and X-ray Touring who will showcase festival-ready acts to promoters from around the world.
Australian media company Nine Entertainment sells its live events companies Nine Live and Ticketek to Asian private equity firm Affinity Equity Partners for AUD$640m ($480m).
Sydney-based Soapbox Artists, which grew out of the Australian wing of Ministry of Sound, announces its merger with the Melbourne-based 360 Agency. The combined EDM agencies will be a significant player in the dance market, representing a large roster of DJ and producer talent.
Live Nation acquires a controlling stake in American festival Bonnaroo. Under the terms of the deal, current promoters Superfly and AC Entertainment will continue to programme and run the event.
AEG agrees an extended deal with America’s International Speedway Corporation (ISC), allowing the company’s AEG Live division to look at organising concerts at racetracks around the country. ISC owns 13 raceways, including such iconic arenas as Daytona and Watkins Glen.
The Foo Fighters cancel a number of shows after frontman Dave Grohl breaks his leg during a concert in Sweden. Despite a nasty fracture, however, Grohl makes headlines around the world by returning to complete the Gothenburg show, receiving medical attention on stage.
German promoter Deutsche Entertainment AG and its UK offshoots Kilimanjaro Live and Raymond Gubbay Ltd, have set-up a company to sell tickets for their British shows. MyTicket.co.uk will expand the MyTicket concept that has already been running in Germany for six months.
The Windish Agency and Paradigm Talent Agency agree a partnership deal to form one of the world’s biggest independent agency operations, bringing The Windish Agency together with Paradigm partner agencies AM Only and Coda Music Agency, as well as Paradigm itself.
Live Nation Entertainment forms Live Nation Concerts Germany with German concert promoter Marek Lieberberg to promote concerts and festivals in Germany, Austria and Switzerland.
William Morris agent Sol Parker jumps ship to Coda Agency, taking Take That, The Prodigy and Rita Ora with him.
United Talent Agency completes its acquisition of The Agency Group.
Live Nation acquires venue and festival operator MAMA & Company, returning a number of former Live Nation assets to its portfolio.
Australian promoter Andrew McManus is arrested at Melbourne Airport on charges of money laundering and the importation of 300 kilograms of cocaine. McManus is one of five people arrested in Australia and the United States as part of an FBI investigation.
Disgruntled investors hit SFX with a lawsuit claiming they were deceived with false and misleading statements over the company’s privatisation plans.
Ebay-owned secondary ticketing platform StubHub launches in Germany.
Pandora completes a $450m takeover of specialist ticketing agency Ticketfly.
Several preliminary bids are reportedly submitted for EDM promoter SFX in addition to that from CEO Robert Sillerman, who bid to buy back the company for $3.25 per share.
SFX promotes former IQ new boss Sebastian Solano to CEO of ID&T North America.
Ex-AEG chief Tim Leiweke forms live entertainment investment firm Oak View Group with Irving Azoff.
Ex-Done Events chief Thomas Ovesen is named CEO of new Dubai-based live music company 117 Live.
Live Nation UK vice-president Steve Homer and senior vice-president Toby Leighton-Pope leave the company.
Who we lost
Mike Porcaro, bassist for Toto; blues legend B.B. King; John Gammon, Pollstar’s UK/Europe correspondent; veteran promoter and ILMC member, Paul King; Stage Entertainment’s project manager Sjoerd Unger; Live Nation venue chief David Vickers; U2 tour manager Dennis Sheehan.
AXS adds former Eventbrite execs to business team
AEG ticketing partner AXS has added two former Eventbrite executives to its sales team, as the company continues to grow its music sector.
Shaun Eidson joins the team as vice president of sales for music and Stephanie Streeter takes on the role of senior director of sales for music.
Combined, the new hires have more than two decades worth of industry experience across business development, sales and strategic partnerships.
Having previously worked at fellow ticketing companies Eventbrite and StubHub, Eidson will develop and manage engagements with music venues, promoters and artists to implement the AXS platform in international markets.
Streeter, who helped lead the migration of Ticketfly clients over to the Eventbrite platform, will develop partnerships with music festivals, venues and promoters in her newly created role at AXS.
“Shaun and Stephanie bring deep knowledge of what artists and venues require from their ticketing partner”
Eventbrite now has fewer than 100 clients left to migrate, according to a recent Q2 financial report.
“The AXS platform is pushing the pace of innovation for the music industry at every level, from clubs and theatres to arenas, and we continue to add partners that are looking for more sophisticated and robust tools to help grow their businesses,” says Rob Sine, chief revenue officer for AXS, who both Streeter and Eidson will report to.
“Shaun and Stephanie bring deep knowledge of what artists and venues require from their ticketing partner to continue to serve the ever-evolving needs of artists, promoters, and fans and we are thrilled to have them join the AXS team.”
AXS launched its official price-capped resale platform at AEG-owned London arenas the O2 (20,000-cap.) and the SSE Arena (12,500) earlier this year.
Eventbrite appoints new CFO following Q2 results
Ticketing and event technology platform Eventbrite has appointed Lanny Baker as chief financial officer, following mixed second quarter financial results.
Baker joins Eventbrite from Yelp, succeeding Randy Befumo in the role. Befumo, who has served as the company’s chief financial officer since 2016, will move into the role of chief strategy officer.
Eventbrite chief executive officer Julia Hartz says she “cannot think of a better partner […] to help lead the company in its next phase of growth” than Baker.
The announcement follows the release of Eventbrite’s Q2 financial report, which showed total revenue for the quarter at $80.8 million, a 19.6% increase compared to Q2 2018. Paid ticket sales were also up from the same period last year, growing 15% to $26.5m.
In a letter to shareholders, the company attributed revenue rise to ticket sales and the introduction of its add-ons feature, which allows event organisers to promote premium and ancillary offerings to customers.
However, the results showed an operating loss of $14.5m for the quarter, up from the $13.2m from Q2 2018.
“I cannot think of a better partner than Lanny [Baker] to help lead the company in its next phase of growth”
Adjusted EBITDA (earning before interest, tax, depreciation and amortisation) was down from the previous year, from $1.2m to $900,000.
In Wednesday’s earnings call, chief strategy officer Befumo stated the company expected EBITDA for the next quarter to be down further, “in the range of minus $9m to minus $5m”. The bulk of this loss, explained Befumo, would be related to the impact of the failed Roxodus festival.
Eventbrite pledged to refund all ticketholders out of its own pocket, following the last minute cancellation of Roxodus festival in Canada. MF Live, the company behind the festival, has since filed for bankruptcy.
The upcoming quarter will also be affected by “migration impact as we sunset the Ticketfly platform”. However, the company states it is “encouraged by the progress” it has made with the Ticketfly integration, with fewer than 100 clients left to migrate. The intention is to have all tickets sold on the Eventbrite platform by October 1.
In the earnings call, Befumo told investors that there was “no easy quantification” of how many customers would remain with Eventbrite after migrating from Ticketfly.
Eventbrite faces lawsuit in fallout from shares drop
Eventbrite shareholders are taking a class action lawsuit against the ticketing and events company, alleging they were misled at the time of the company’s initial public offering (IPO) in September 2018.
International securities and consumer rights litigation firm Scott+Scott Attorneys at Law LLP filed the lawsuit on behalf of claimants who purchased Eventbrite stock in the company’s IPO at US$23 a share.
The lawsuit alleges that Eventbrite misled potential buyers in its IPO registration statement, declaring that the acquisition of ticketing platform Ticketfly “had a positive impact” on net revenue growth” in the third quarter of 2017.
The claimants also state that the company failed to disclose that, at the time of IPO, the Ticketfly migration was progressing more slowly than stated, therefore delaying integration and negatively impacting growth.
Eventbrite shares have dropped more than 50%, from over $32 to almost $16, in the past three months.
The lawsuit alleges that Eventbrite misled potential buyers in its IPO registration statement
Shares first declined on 7 March 2019, upon the release of Eventbrite’s annual financial results and the admission that the Ticketfly integration “will impact revenues in the short-term”. Shares then dropped further, to $17, in May following a weaker-than-expected financial start to 2019.
At the end of May, Eventbrite Music president and Ticketfly co-founder Andrew Dreskin stepped down from his role to transition to an advisory position.
The company’s shares remain down at $15.74, at the time of publishing (6 June).
Eventbrite declined to comment.
The lawsuit is not the first that Eventbrite has faced in relation to Ticketfly. Claimants attempted to sue the company following a Ticketfly hack in May 2018, alleging that “lax cybersecurity procedures” allowed hackers to gain access to 27 million customers’ personal data.
An Illinois judge dismissed the case earlier this week. The claimants have until 9 June to file an amended complaint.
Eventbrite Music president Dreskin to step down
Ticketfly co-founder Andrew Dreskin is taking a step back from his role as Eventbrite Music president and will not be standing for re-election to the board of directors as he transitions into an advisory role in early June.
Dreskin became president of Eventbrite in 2017, following the company’s US$200 million acquisition of Ticketfly from Pandora, and joined the executive board in early 2018.
Prior to Ticketfly, Dreskin co-founded TicketWeb, which he sold to Ticketmaster in 2000.
“After more than a decade at Ticketfly, two acquisitions, and all told almost 20 years running ticketing companies, it feels like the right time for me to transition into a different role,” Dreskin told Billboard.
“It has been a tremendous honour to lead both Ticketfly, and Eventbrite’s music division for the past couple years. I have mad respect for the team at Eventbrite and continue to believe that we are building the best music ticketing platform in the world.”
Dreskin adds that he is “stepping down but not stepping out” and has entered into a “new multi-year advisory agreement” with Eventbrite, remaining the “main point of contact” for his existing roster of clients.
“After more than a decade at Ticketfly, two acquisitions, and all told almost 20 years running ticketing companies, it feels like the right time for me to transition into a different role”
“We’re grateful for Andrew’s dedication to leading Eventbrite’s music division since Ticketfly and Eventbrite came together nearly two years ago, culminating in the release of the Eventbrite Music platform late last year,” says Eventbrite co-founder and chief executive Julia Hartz.
“Today’s news does not change our fervent commitment to the independent live music community both in North America and globally, and our clients and the team that serves them remain our highest priority,” states Hartz.
The new Eventbrite Music platform, a ticketing solution aimed at mid-sized independent venues and promoters, launched in November 2018 as the company announced plans to retire the Ticketfly brand. All existing Ticketfly clients will be moved onto the new platform by the end of the year.
The transitioning of Ticketfly to the Eventbrite platform has not proved straightforward. The company cited the integration process as a reason for its “modest growth” in the first financial quarter of this year. Eventbrite’s shares dropped 30% to $17 after releasing its Q1 report, which detailed almost 70% losses as compared to Q1 2018.
Almost a month after the publishing the report, the company’s shares continue to hover around the $16 mark, 30% below its IPO price of $23.
Eventbrite shares drop 30% after weak Q1 report
Eventbrite shares dipped from US$24.15 to $17.2 last night (May 1), following the release of the company’s Q1 financial report, which showed widening losses and slower growth.
Although the event management and ticketing company experienced growth in revenue (9.1% to $81.3 million), paid tickets (14.5% to 27m) and gross profit (9.4% to $50.8m), the rate of growth has slowed down considerably since the company first went public in November 2018.
Eventbrite recorded an operating loss of $10.1m, compared to $3.1m in the same period of 2018. Net loss per share was $0.13 and adjusted EBITDA was down to $5m, from $8.8m last year.
The company put its modest growth down to issues related to integrating Ticketfly to the Eventbrite platform, following its acquisition of the ticketing company in 2017. Eventbrite aims to retire the Ticketfly brand later this year, following November’s launch of Eventbrite Music, a ticketing solution for independent promoters, venues and festivals.
“We took on a challenge when we acquired Ticketfly, as it marked a significant expansion in our commitment to their main customers, music venues,” explains the Q1 shareholder letter.
“While we remain committed to this endeavour, we believe we may see meaningful migration loss as we move to shut down the Ticketfly platform in the second half of the year”
“We have spent significant time and resources over the past year to build a product that serves these creators. While we remain committed to this endeavour, as we have noted in the past, we believe we may see meaningful migration loss as we move to shut down the Ticketfly platform in the second half of the year.
“While unfortunate in the short run, this move positions the company best for the future, allowing us to continue to improve capabilities for all creators on the platform and ensuring we are sufficiently investing beyond North American music sales to support both our self sign-on and sales channels.”
Eventbrite states it will continue to increase investment in the business in Q2 and expects to remain EBITDA positive for the full year.
The company notes that while it expects these platform migration-related issues to continue into Q2, continued growth from self sign-on and international channels ought to bolster performance. Eventbrite recently opened its first European development centre in Spain and launched a localised platform Singapore, its first in an Asian market.
The company also announced that its chief financial officer, Randy Befumo, will transition into the role of chief strategy officer, to focus on ways to enable the Eventbrite business to grow.
AEG backs $115m Sapphire sports/entertainment fund
Technology-focused venture-capital investor Sapphire Ventures has launched Sapphire Sport, a US$115 million fund which will invest in early-stage start-ups “at the intersection of sports, media and entertainment”.
According to California-based Sapphire, which manages more than $2.5 billion worth of assets, Sapphire Sport combines the firm’s investment experiences with “premier global sporting, media and lifestyle brands”, including Manchester City FC owner City Football Group, other US sports teams from the National Football League (NFL), Major League Baseball (MLB), National Basketball Association (NBA), National Hockey League (NHL) and Major League Soccer (MLS) and investors such as AEG, the Bank of Montreal, Adidas and US television giant Sinclair Broadcast Group (SBG).
Sapphire Sport launches with a portfolio of five start-ups: including Tonal, a digitally connected home fitness system; Mycujoo, a live football streaming platform; Overtime, a digital sports network; Fevo, a social commerce solution for live events; and Phoenix Labs, an independent gaming studio launched by the creators of Dauntless.
Sapphire Sport is be co-led by Doug Higgins, managing director and co-founder of Sapphire Ventures, and Michael Spirito, who joined Sapphire Ventures as managing director in September 2018 from 21st Century Fox.
“The opportunity we are addressing is vast and diverse”
“Venture capitalists need to continue to reinvent and innovate in order to stay relevant,” comments Higgins. “We created Sapphire Sport to serve as a preeminent investment vehicle in a nascent and dynamic sector where technology investment experience is in increasingly high demand. In partnership with some of the most innovative team owners and sporting brands in the world, we are bringing Sapphire Ventures’ investment experience to the global sport marketplace.”
Adds Spirito: “The opportunity we are addressing is vast and diverse. Sport is the one thing we can all agree on – even as we may disagree on our fan loyalties.
“I joined Sapphire Ventures because I believed that they had the best platform to build an investment firm of consequence in this industry. From a market perspective, sport includes all global sports media rights, distribution technologies, content creation, sponsorship, digital fitness, esports, betting, data and everything in between.”