Tour Accountants Raise New Allegations In Backstreet Boys Ticket Controversy

Back - Index - Submissions - - What is RSS? Date: Dec 05, 2099 Source: Livedaily.com Submitted By: HOB Concerts refutes claims that ticket sales were manipulated to benefit promoter and local brokers. By Mark Lewis Representatives of Backstreet Boys and House of Blues Concerts have turned up the heat in the debate over circumstances surrounding the group's accusation that the concert promoter channeled tickets to ticket brokers in advance of the group's Oct. 31 sold-out show at Denver's Pepsi Center. Backstreet Boys tour accountants contacted LiveDaily earlier this week in response to coverage of the ticketing controversy, claiming that the number of tickets that HOB Concerts sold from its own office was 1,435, not several hundred, as HOB Concerts has maintained. Tour accountants also claimed that HOB Concerts’ defense that it sold hundreds of higher-priced tickets as part of a dinner package was a cover for diverting a larger number of tickets to ticket brokers. Finally, tour accountants said that HOB Concerts did not “loosen its strictures” on the number of tickets that could be sold to any one person, as HOB Concerts senior vice president Mark Norman previously claimed in the Denver press, but that it knowingly seized the opportunity to earn much more than the $38.50 face value of the tickets by channeling them to ticket brokers. In a Thursday (12/2) interview, Norman called ''completely erroneous'' the claim that his office sold 1,435 tickets to brokers. He also questioned the legitimacy of the Columbine charity organization to which the Backstreet Boys called on HOB Concerts to donate $75,000. Norman said that his office sold 400 of its own tickets and did not knowingly divert them to ticket brokers. Another 600 tickets were sold by HOB Concerts to a dinner party that was held in the building. As for the remaining 400 seats, Norman said that the Pepsi Center sold them to season ticket holders who are normally offered first crack at the seats. The story of what transpired after members of the Backstreet Boys' crew discovered that a large block of tickets were sold to fans at prices of $110 to $350 is a complicated one, of which the chronology of the evening's events, provided here by a tour accountant, is one of the few items not in dispute. Acting on a tip, the tour accountant polled people in the club-level seats of the Pepsi Center and discovered that they had spent $110 and $125 per ticket. The accountant then requested a ticket-sales audit from the box office, from which he concluded that ''the promoter had taken all of those excess club-level seats that didn’t sell to the [season-ticket holders] and channeled them, or funneled them, into their own sources.” At a settlement meeting after the show, where tickets-sales audits are reconciled with funds owed to the group, the accountant said he called in the group’s agent and management because he found that HOB had sold 1,635 club-level tickets to its own buyers and had not put them on sale to the general public. He tried to discuss the issue with HOB's Norman, who refused to talk about the club-level tickets. To the accountant, this indicated possible improprieties on the part of HOB Concerts. (Regarding the discussion of the higher-priced club-level seats at the settlement meeting, the accountant said this week, “I should have brought it up in front of the building manager at that moment, but I was trying to be politically correct and appropriate... and not create a scene until we did some more investigation. But obviously, he [Norman] knew what he was hiding.'' Norman remembered these events differently, however. In an interview, he said that he didn’t want to address the dispute in front of Pepsi Center personnel, who were also present at the settlement meeting, “because it was none of their business.” He also said that the accountant had tried to talk to him about club-level sales earlier in the day, but Norman told him that he had to research the matter before he could respond.) The accountant then told Norman that the settlement was under protest, pending further investigation. In the weeks following the concert, upper management for Backstreet Boys attempted to negotiate a final settlement with upper management from HOB Concerts. Backstreet Boys management then decided to ask HOB Concerts to make a $75,000 donation to a Columbine High School scholarship fund as a form of reparation. Outside of this chain of events, what HOB Concerts did with the unsold club seats has been hotly contested. The accountant claimed that after HOB Concerts discovered that there were still 1,600 club-level seats that Pepsi Center season-ticket holders had not bought, HOB Concerts sold the tickets before the on-sale date instead of selling them to the general public. “HOB saw a situation where they said, ‘Hey, there’s still 1,600 tickets.’ This tour sold out in an hour. We had no problem getting rid of those seats…Basically it’s an opportunity: ‘Let’s take these seats where nobody decided to exercise their option, and use it for our own gain' in the event that I, the tour accountant, won’t go looking for it. And they would have gotten away with it, had I not gotten a tip on it. I would never have known from the general audit,” the accountant said. The accountant believed that HOB Concerts acquired the seats from the Pepsi Center and accounted for them by calling them “promoter holds,'' part of the limited inventory to which a promoter is usually entitled. In response to the accountant's findings, HOB Concerts explained the higher-priced seats by claiming that ticket holders in the club section had paid $55, not $110 and $125, for a package that included tickets and dinner. But the accountant found that only 100 to 200 people had bought tickets at $55, and none of them got dinner. The accountant believed that HOB Concerts was “trying to diminish the fact that the bulk of them [1,435 tickets] were diverted to other sources.” He concluded that the sale of 100-200 $55 dinner tickets was “a small cover for the larger situation, which was the $125 tickets that they were selling” to brokers. On the HOB Concerts side, Norman denied that there was any mishandling or impropriety over the dinner package. Of the 1,400 unsold club-level seats, he says that HOB Concerts took 600 of them after Pepsi Center season-ticket holders exercised their right to the club-level seats. Norman said that all 600 people “physically went” to the dinner party, and he was there to attest to the fact. Gene Felling, senior vice president of Pepsi Center operations, confirmed that the party was held and was sponsored by HOB. Moreover, Norman denied that his office ever sold tickets directly to ticket brokers. He admitted that tickets did fall into the hands of ticket brokers, and recently concluded an investigation of the matter. Following his interview for this story, Norman issued a statement on Thursday (12/2), which shed no light on the results of the investigation. It only stated that in the future, HOB Concerts will sell a maximum of eight tickets to any one buyer. The Pepsi Center, which was presenting its very first show with HOB Concerts, has been caught in the middle of the affair. According to the Pepsi Center's Felling, the dispute won’t affect the two-month-old venue’s business with HOB Concerts in the future. HOB Concerts has agreed to make a $75,000 donation to victims of the Columbine shooting, but will offer the money to a group of their own choosing, claiming that the charity suggested by Backstreet Boys’ management may not be legitimate. According to a Dec. 2 Denver Post article, Backstreet Boys’ chosen charity, the Columbine College Fund, may fold due to lack of donations. David Baram, chief operations officer of Backstreet Boys’ management company The Firm, said that he wasn’t aware of any problems with the fund and was awaiting its financial statement. Published: Fri Dec 3, 1999 at 19:12:05 Pacific Time Writer: Mark Lewis for Livedaily.com Related articles: Concert giant sold brokers prime seats Dec 5 99 (15k) Best seats not available to average customers Dec 5 99 (17k) How House of Blues used special sales to pump up revenue Dec 5 99 (6k) Music-industry insiders: State should outlaw scalping Dec 5 99 (6k) Backstreet Boys, House Of Blues Concerts Square Off... Nov 30 99 (8k) House of Blues donate $75,000 to benefit Columbine Nov 27 99 (6k) Backstreet Boys "Horrified" At Ticket Scalping In Denver Nov 23 99 (5k) Comment on this item. 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