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Book Excerpt: Ticket Masters (The String Cheese Incident vs.Ticketmaster)

“As the ruling had come down that we can’t have a fifty percent allotment anymore, when we’d book a show, part of [the conversation with the promoter] was, ‘What’s the ticket allotment?’” recalls Luba, increasingly animated. “We’d say, ‘We don’t want any ticket allotment; people can buy as many as they want; and there has to be no service charge at the box office.’” The proposed end-around was for SCI Ticketing to parcel out cash to fans and send them to the box office where there was no service charge to buy the necessary inventory themselves, to sell directly back to fans.

“So when we were going to play the Fillmore in Denver, we would say to the promoter, Don Strasburg, who is a really good friend of ours: ‘Don, if you don’t let us sell the tickets, we’re going to send 4,000 kids to the box office and have them each buy eight tickets, and then they’re going to come back to our Boulder office. So instead of making all the out of town people pay the $11 service charge, they’re going to pay our $3 service charge.’”

While box office point-of-purchases were at an all-time low, the no service fee policy had long been something Ticketmaster highlighted in response to public criticism over its convenience charges. “For us it was a huge bat they inadvertently put in our hands because we could threaten it,” says Luba. “They knew we were crazy enough that we would literally send 1,000 kids with $240 each to buy 8,000 tickets for the allotment. There was nothing they could do to stop it.” (While they never followed through with it, Luba does have a mental picture of parceling out stacks of cash for ticket-buyers: “It might have gotten to the point where we actually took a picture and sent it somewhere and said, ‘This is what’s happening.’”)

As the year wound down, the band’s continued conflicts with Ticketmaster became untenable. The internal conversations amongst Madison House, SCI Ticketing and the String Cheese Incident circled around whether or not they had the resources and willpower to take legal action. The general consensus was that they had neither. The legal costs would be enormous to fight a company of Ticketmaster’s size, and String Cheese was a band that thrived on playing concerts to as many people as possible, not one that wanted to deal with labor-intensive tour routing that avoided Ticketmaster by playing less-than-desirable locations à la Pearl Jam. And then, out of the blue, Luba got a phone call from an attorney who said he was interested in helping them.

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SCI Ticketing filed a civil lawsuit in the US District Court of Colorado on August 3, 2003, at 3:12 p.m. The twenty-page document was precise in articulating SCI Ticketing’s genesis, the concert industry dynamics that had made its existence so precarious and the resolutions it was seeking. It charged Ticketmaster on four counts: (1) Ticketmaster has entered into combinations and agreements in violation of section 1 of the Sherman Antitrust Act; (2 and 3) Ticketmaster has monopolized and attempted to monopolize or abused its monopoly power in the market in violation of section 2 of the Sherman Antitrust Act; and (4) Ticketmaster had practiced tortious interference with prospective business advantage. Both Clear Channel and MusicToday were named in the suit.

“SCI Ticketing has become the target of an all-out effort by Ticketmaster to foreclose it from competing in the relevant market,” the suit argued. “Acting on instructions from Ticketmaster, venues and promoters have refused to continue their practice of supplying SCI Ticketing with reasonable allocations of popular music concert tickets to offer for sale to the public.”

It argued, based in part on publicly available Pollstar reports, that Ticketmaster clearly had a monopoly within the concert industry. It had exclusive agreements with approximately eighty-nine percent of the top fifty arenas, eighty-eight percent of the top fifty amphitheaters, more than seventy percent of the top theaters and more than seventy-five percent of the top clubs.

In regard to consumer fairness, the suit used the band’s shows at the Warfield theater in San Francisco the previous month as one example: the difference in price between a fan buying four tickets to four different shows from SCI Ticketing versus Ticketmaster was just over $85.

The suit also highlighted King Crimson’s spring tour earlier that year, which had utilized SCI Ticketing. All of the promoters signed and returned the ticket allocation agreements except Clear Channel, which indicated that because of pressure from Ticketmaster, it would not be allocating the company any tickets to any shows at Clear Channel venues. SCI Ticketing was forced to issue a letter to fans and was now, it argued, likely to lose King Crimson’s and other future clients’ business.