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Barclays Center’s SeatGeek to Ticketmaster Change Due to Tech Issues – Billboard

Written by on 27/01/2023

In December, Barclays Center and BSE Global chief executive Sam Zussman arranged a meeting with officials at SeatGeek and offered the ticketing company an ultimatum: Either terminate the seven-year contract they signed with his predecessor, John Abbamondi, the year before, or else Zussman would publicize SeatGeek’s tech failures as they happened, multiple sources tell Billboard.

SeatGeek quietly complied and the ticketing company’s third NBA contract would come to an end, losing one of New York’s most popular venues. Starting this month, all new concerts at the arena are now ticketed by the team’s previous ticketing provider, Live Nation’s Ticketmaster — the world’s biggest ticketing service — under a deal term that runs for three to five years, according to sources familiar with the situation.

“The Barclays Center team met with our execs to figure out a way to amend the contract which would offer us the ability to continue ticketing the teams, but not third party events,” a SeatGeek spokesperson told Billboard in a statement. “Several months later we offered Barclays the opportunity to simply end the agreement, in consultation with our other clients, on good terms.”

A separate statement from Barclays Center confirmed that BSE Global and SeatGeek’s partnership would “wind down” beginning with the New York Liberty’s 2023 season in May. “SeatGeek provided our fans with a first-class gameday ticketing experience,” the statement reads, “and we’re appreciative of the time and energy they put into our work together.”

“They Just Aren’t Designed for High-Demand Ticket Sales”

A Barclays Center representative would not comment on the reason behind the arena’s dramatic turn face, or why Zussman had been frustrated with SeatGeek’s fulfillment of its contract — most ticketing agreements have clearly defined “service level agreements” governing response expediency and site uptime — but an incident from October 2021 provides insight into the issues SeatGeek may have been struggling to rectify.

Booking agents Jared Arfa and Marsha Vlasic at Artist Group International whose agency represents New York indie rock icons The Strokes, claim SeatGeek mishandled an October 2021 presale that cost the group several hundred thousand dollars. That concert, originally scheduled for Dec. 31, 2021, was postponed to April 2022 due to concerns over the omicron COVID-19 variant and ended up selling 13,548 tickets and grossing $1.57 million. That total was 2,000 tickets and $400,000 less than the band’s 2019 New Year’s Eve show at Barclays Center, which Arfa and Vlasic blame on SeatGeek’s user interface— not The Strokes’ popularity.

“They just aren’t designed for high-demand ticket sales, like concerts,” says Arfa, who describes SeatGeek as “a secondary ticketing company that dabbles in primary ticket sales” and struggled during large sales. “There’s things that we have become accustomed to in the music business that SeatGeek can’t do that as well.”

By contrast, says one prominent Brooklyn concert promoter familiar with both ticketing systems, “Ticketmaster has a ton of marketing power and reach in New York” through its huge email lists, search engine optimization and decades of work in the city. “For better or worse,” the booker adds, “Ticketmaster sells the most tickets in New York hands down.”

This wasn’t a one-time instance, either. Sources tell Billboard that concert promoters S2BN booked and then cancelled a Genesis 2022 tour date for Barclays Center due to issues with SeatGeek. The show, which was to be a surprise fourth New York date of the band’s Last Domino run (Genesis played two nights at Madison Square Garden and one at UBS Arena in Belmont), suffered from technical issues after going on sale and never came close to hitting the promoter’s sales goals.

The SeatGeek Deal Points

SeatGeek officials dispute the claims about problems with their system, telling Billboard in a lengthy statement, “Being the fastest growing tech company and a newer entrant to the primary ticketing space, SeatGeek is unencumbered by legacy technology, historical relationships, and outdated biases, allowing us to invest where the most impact can be felt.”

“In the last twelve months,” SeatGeek’s statement continues, “we’ve bolstered our entertainment team with key hires and have completely revamped our entertainment product offering, including making a number of fan-friendly strides in how we handle onsales, from utilizing state-of-the-art 3D view-from-seat imagery to providing ‘similar seat’ recommendations when multiple customers are vying for the same inventory.” The changes have resulted in “resounding appreciation from both AEG and Live Nation’s teams.”

Abbamondi signed the SeatGeek deal in 2021 with a $10 million signing package, sources say, that included cash, savings on the fees SeatGeek charged and a lucrative sponsorship agreement. The contract was seen as a means of helping reduce owner and Alibaba co-founder Joe Tsai’s $50 million to $100 million annual losses operating the team and arena since he bought out majority owner Mikhail Prokhorov in 2019. Just seven months later, however, Tsai agreed to accept Abbamondi’s resignation, despite the executive signing a record number of sponsorship agreements for the Nets that brought in an additional $30 million in annual revenue.

For SeatGeek, one of the largest ticket resale services in North America, the Barclays Center deal marked a major win in the company’s move from secondary ticketing into the primary, direct-to-consumer ticket business. Partnering with venues for primary ticketing services also drives significant traffic to SeatGeek’s secondary marketplace. That’s because ticket buyers don’t generally know if they are buying tickets from the team or from a reseller, since all primary and secondary tickets are listed together without any differentiation. The company’s other clients include the NBA’s New Orleans Pelicans and Cleveland Cavaliers, the NFL’s Dallas Cowboys and Arizona Cardinals, most of Major League Soccer and a growing number of Broadway theaters due to an alliance with Shubert Tickets.

Ticketmaster Regains Control

Ticketmaster has been under scrutiny this week, following a high-profile hearing before the U.S. Senate Judiciary Committee on Tuesday, examining competition in the ticketing industry and the company’s disastrous Nov. 15 ticket sale for Taylor Swift’s record-breaking The Eras tour. SeatGeek chief executive Jack Groetzinger testified during the hearing that Live Nation and Ticketmaster’s 2010 merger should be unwound due to a monopolistic behavior, saying it “it stifles competition completely.” (He was not, however, asked about his company’s own outages selling tickets to five of the concert dates for which the company has exclusive deals — including one reported instance where it charged a woman’s credit 14 times for $9,000 in total.) With Barclays Center’s move back to Ticketmaster, and the opening of the UBS Arena in late 2021, Ticketmaster now tickets all four of New York’s major arenas.

Barclays Center’s switch is likely to be examined by the Department of Justice, which monitors Ticketmaster as part of a 13-year-old consent decree dating back to Live Nation’s 2010 merger with Ticketmaster. One area of inquiry will likely be the drop in the number of concerts brought to Barclays Center in 2022, compared to 2019, the last full year of concerts prior to the COVID-19 pandemic.

Six months after signing with SeatGeek, Barclays Center saw the number of especial events and concerts at the building drop 13% from 2019 to 2022. The number of Live Nation concerts at the building fell 23% compared while the revenue generated from those Live Nation 2022 shows — $14.6 million — was less than half of the $31 million Live Nation concerts generated at Barclays Center in 2019.

The precipitous drop in Live Nation content, if done to retaliate against the venue for signing with Ticketmaster, could be a serious violation of the consent decree and could be grounds for challenging the merger in court.

Billboard found that other major buildings experienced similar fluctuations, though, including Madison Square Garden, which saw its total show count from 2019 to 2022 drop 11%. Revenue from Live Nation touring shows dropped 20% during that same period, while the number of touring shows brought to the arena was only down 2%. The 02 Arena in London, Scotiabank Arena in Toronto and FTX Arena in Miami each also experienced double-digit event night declines at their venues in 2022 compared to 2019.

The arena shows that Live Nation did bring to Barclays Center were some of the company’s most popular tours, according to Boxscore data, including Kendrick Lamar ($3.7 million gross), My Chemical Romance ($4.4 million gross) and Arcade Fire ($1.3 million gross). Barclays Center was also likely impacted by the opening of the OVG-managed UBS Arena, which booked $50 million in shows in 2022. Often the opening of a new venue can temporarily affect older venues as touring shows line up to be among the first to play the new facility. Barclays Center was able to make up for much of the loss caused by the decrease in Live Nation shows with higher grossing events from other promoters. By doing so, executives were able to minimize the venue’s drop in revenue from 2022 to 2019 to a difference of only $2 million, according to Boxscore data. Among those were Elton John’s March 1-2 concerts that generated $4.9 million in sales and Tame Impala’s March 14-15 shows that generated $1.9 million in sales, both promoted by AEG Presents. As well, Bad Bunny’s March 19-20 dates from Latin promoter Henry Cardenas generated more than $7.9 million in sales.

Looking ahead to 2023, Barclays Center already has three of the year’s biggest shows on the books – Madonna, as well as Blink-182 and Bruce Springsteen. Blink and Springsteen are both Live Nation tours booked at the venue prior to the switch back to Ticketmaster.

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