Ticketmaster Practices Not Taken at Face Value

By David Montgomery and J. Freedom du Lac
Washington Post Staff Writers
Thursday, February 12, 2009

It's been a rough couple of weeks for Ticketmaster, the nation's largest ticket-seller.

The company's handling of ticket sales for Bruce Springsteen's upcoming "Working on a Dream" tour quickly turned into a public-relations nightmare when fans complained that they had been unable to buy tickets from Ticketmaster's Web site but were offered tickets, at a considerable markup, from a Ticketmaster subsidiary, TicketsNow.

The attorneys general in New Jersey and Connecticut opened investigations.

A congressman, Rep. Bill Pascrell Jr. (D-N.J.), demanded a federal inquiry.

Springsteen and his manager lashed out publicly, writing in a blistering letter that "the abuse of our fans and our trust by Ticketmaster has made us as furious as it has made many of you."

Then, Ticketmaster chief executive Irving Azoff issued a public apology -- and the beleaguered company began to issue some refunds.

Yesterday, the Justice Department launched an investigation into Ticketmaster's proposed $2.5 billion merger with concert-promoting behemoth Live Nation. (The potential marriage of the two entertainment giants was announced Tuesday.) The Justice Department "is committed to vigorous enforcement of the merger antitrust laws and will conduct a thorough investigation," agency spokeswoman Gina Talamona said.

The agency routinely examines mergers of this size. A Ticketmaster spokesman said that the two companies "welcome the opportunity to fully discuss the agreed-upon merger with the government and look forward to cooperating with any review of the deal."

In a letter to U.S. Attorney General Eric H. Holder Jr. yesterday, Sen. Charles E. Schumer (D-N.Y.) and Pascrell, the congressman from New Jersey, expressed their opposition to the merger, citing anti-competitive concerns "and past allegations about Ticketmaster's actions."

Ticketmaster has long been a target of fan and musician criticism, mostly for the fees the company adds to every ticket purchase. A spoof headline posted this week on Fark.com played up the percolating unhappiness with how the company does business: "Live Nation to acquire Ticketmaster for $2.5 billion, plus $700 million in convenience charges." (Never mind that the proposed deal is an all-stock merger and not an acquisition.)

A Ticketmaster spokesman declined to comment on the company's public image, but Chairman Barry Diller said during a conference call Tuesday that "Ticketmaster is never perceived to be on the side of the angels."

Ticketmaster is under investigation in New Jersey and Connecticut, where the attorneys general launched separate inquiries last week into the company's handling of tickets to Springsteen's concerts in New Jersey and New York.

At issue: Some fans trying to buy Springsteen tickets through Ticketmaster's Web site say they were automatically directed to the company's resale site, TicketsNow.com, where tickets were available for hundreds of dollars above face value -- even though Ticketmaster still had tickets available at their original prices.

David Wald, a spokesman for New Jersey Attorney General Anne Milgram, said the state had received "about 1,700 complaints" about the snafu since the Springsteen tickets went on sale Feb. 2.

In a telephone interview yesterday, Connecticut Attorney General Richard Blumenthal called it "a very alarming and appalling misuse of market power to funnel consumers to higher-priced tickets that would seem clearly to violate the spirit if not the letter of antitrust and/or consumer protection laws." Blumenthal added that he "is concerned" about Ticketmaster's proposed merger with Live Nation and that the Springsteen episode "is highly relevant as evidence of potential future misconduct if the merger proceeds."

A spokesman for Ticketmaster referred reporters to an open letter released this week in which the company explained what went wrong in New York and New Jersey. In its letter, Ticketmaster expressed "regrets," blamed high volume and "a software issue" and said that it does not divert tickets to brokers or resellers, including its own affiliate, TicketsNow. It maintained that fans opted to buy from TicketsNow and were not automatically redirected. But the company also acknowledged that some fans were confused; partial refunds would cover the difference between the original Ticketmaster price and the higher TicketsNow price.

The problem, however, might extend beyond those New York and New Jersey shows. A number of fans are claiming to have been similarly overcharged for tickets to Springsteen's May 18 concert at Verizon Center.

Melinda Engelbrektsson of Fairfax Station says her husband, Eric, logged on to Ticketmaster's site just before 10 a.m. Feb. 2 and after three failed attempts to purchase four tickets to the concert, bought them for $213 each, plus additional fees, from TicketsNow. Face value for the most expensive Verizon Center tickets was $98.

"He thought he was paying face value from Ticketmaster," Engelbrektsson said. "He'd been redirected to TicketsNow, and there wasn't even a pop-up warning message that he was being moved to another site. Now we know why; it was a scam."

Engelbrektsson said she's tried to get a refund from Ticketmaster, to no avail.

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