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Published: 2003/08/11

String Cheese Incident vs. Ticketmaster: Both Sides Comment; Ticketmaster Threatens Countersuit

Both String Cheese Incident and Ticketmaster released statements today regarding the lawsuit filed last week by SCI Ticketing, claiming that Ticketmaster is monopolizing the ticketing industry. Although Ticketmaster generally does not comment on legal issues prior to court hearings, the corporation issued the following statement earlier today:
While it has been our company policy to not comment on pending litigation, SCI Ticketing has so distorted this issue in its own public statements that we feel compelled to clarify the record. One thing is clear, however: Ticketmaster’s contracts and market
conduct are legal and proper.
‘Earlier this year a Federal Court dismissed a
similar lawsuit brought against Ticketmaster. The claims that have been
asserted by SCI Ticketing in this new lawsuit likewise lack merit and we
are confident that they will also be dismissed after all the relevant facts are
established. Ticketmaster competes for the exclusive right to sell tickets on behalf of
venues and promoters. We are awarded those contracts in exchange for
providing our clients with turnkey ticketing solutions to help them best
sell tickets. These solutions include, but are not limited to: a comprehensive
and industry leading technology infrastructure, a multi-access distribution
network, box office and season ticket management systems, marketing
support, customer service and access control.
SCI Ticketing complains that it is being denied access to tickets that it wants to sell for a profit on its web site. Ticketmaster has always recognized the practice of allowing artists a meaningful allocation of
tickets to give away or sell through legitimate fan clubs. These arrangements are
always in cooperation with Ticketmaster’s clients and in accordance with
our client contracts. The allocation of fan club tickets in excess of
historical reasonable levels flies in the face of our contractual guidelines with our
clients. By demanding very large allocations of tickets, SCI has attempted
to break valid contracts for its own self-promotion and monetary gain.
This lawsuit is not about artist’s rights; it’s about money. SCI and its
ticketing company are trying to step in for a ‘free ride’ on the many
benefits and services Ticketmaster provides it clients. SCI essentially wants to
skim the best, most easily sold tickets, and leave Ticketmaster and its clients
with the job of selling the rest. This is in spite of the fact that
Ticketmaster has a contract granting them the privilege of selling their
tickets on an exclusive basis.
SCI has repeatedly threatened Ticketmaster’s clients that if they are not given an excessive number of tickets to sell by SCI Ticketing for a profit,
the band would move their performance to a venue that would comply with the
band’s demands. SCI’s ticket demands have forced Ticketmaster’s clients to
make an unfair choice: either breach their contracts or lose the ability to
host the band’s performance. SCI’s unfair leveraging of its popularity to
achieve its for-profit ticketing goals is both improper and illegal.
SCI ticketing is free to distribute tickets on behalf of artists and their
fan clubs with the understanding that they must abide by the regulations
and obligations of the performance venue — whether it’s concession choices or
ticketing contracts. It’s a free country, SCI can make the choice of where
to play, but they must respect the rights of others. Ticketmaster would prefer to resolve this matter outside of litigation, but now has no choice but to respond to the frivolous claims that have been asserted.
‘Part of that response will be a countersuit by Ticketmaster
against SCI Ticketing (and its founders) for intentionally interfering with
Contracts and relationships in which Ticketmaster has made great investments. The
issue here is whether Ticketmaster and its clients have the right to contract for
ticket distributions services, or whether SCI Ticketing can free-ride on
those relationships by exerting pressure on Ticketmaster’s clients to breach
their contractual commitments.
Meanwhile, String Cheese Incident held a press conference at the Inter-Continental Barclay Hotel in New York City earlier today. Speakers included attorney Neil L. Glazer, who is leading the bands legal team, bassist Keith Mosely, manager, booking agent and co-founder of Madison House Inc. Mike Luba and general manager of SCI Ticketing Jason Mastrine.
SCI Ticketing has literally hit the wall in terms of being able to sell
tickets directly to fans because of Ticketmasters anticompetitive
practices, Glazer said. Our client has carved out a truly unique and
successful way to do business. Unfortunately, they simply cannot compete
because Ticketmaster is restricting the supply of concert ticketsTicketmaster has entered into combinations, agreements, or conspiracies with promoters, venues and others, in restraint of trade, in violation of section 1 of the Sherman Antitrust ActTicketmaster has monopolized, attempted to monopolize, or abused its monopoly power in the market for the sale of tickets to popular music concerts, in violation of section 2 of the Sherman Antitrust ActThe decision to file this lawsuit was not one taken lightly. SCI Ticketing is a very small company, and Ticketmaster is one of the behemoths of the concert industry. By filing this lawsuit, SCI Ticketing is hoping to put a stop to anticompetitive practices that harm not only innovative young companies, but also artists and consumers.
For bands like The String Cheese Incident, who depend on heavy touring and lasting fan relationships in order to succeed, services like direct artist-to-fan ticketing are essential, said Luba. It allows fans to enjoy the complete String Cheese experience, from beginning to end. This involves giving the fans unprecedented attention for the essential part they play in the artists career, and being able to offer fans SCI performances in high quality venues and with affordable prices. Today, cultivating an artists fan base through such things as touring, creative internet communications, and how they sell tickets are some of the ways for bands to survive outside the music industrys corporate machine. Bands like The String Cheese Incident rely on these tools for survivalIts not just about artists wanting to control their own destiny and providing better service to their fans, its also an economic issue. For many artists in todays music industry, touring has become a much more important source of revenue than record sales because constant touring encourages community building and fan loyalty, which promotes a sustainable career.The music industry is suffering right now, but there is no reason that the artists and their fans have to go down with it. We hope that the positive ramifications of filing this lawsuit will reach well beyond just The String Cheese Incident and their fans, and benefit everyone.
We are not saying Ticketmaster doesnt have a place in the ticketing
business, but we have a different philosophy of doing business, one that
caters more directly to our fans, noted Mastrine. Now, for the first time in our companys history, Ticketmaster is preventing us from acquiring the same reasonable ticket allocations we used to get from promoters and venues. Theres room for everyone in the mix.
Its been a huge commitment our touring and reinvesting and sacrifice, said Moseley. We hope this action sends the message loud and clear that monopolies like Ticketmaster cannot and will not be the only game in town; our fans deserve more than that.

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