Tag Archives: Veritix

Veritix Gets Nine-Figure Credit Deal

14 Nov

Veritix

Credit agreement with Rockbridge Growth Equity

Date: Nov. 9

Terms: Ticketing company Veritix has acquired a $100-million credit facility from Rockbridge Growth Equity, an investment firm owned by Veritix and Cleveland Cavaliers owner Dan Gilbert.

The deal gives Veritix access to capital and the ability to offer upfront rebate deals and cash payments to teams, venues and entertainment properties.

“This puts us on a level playing field to compete,” said Veritix President Jeff Kline. “In the past year we’ve gone after a lot of business, and we feel access to this capital will make us more competitive.”

Kline said many clients are still asking for cash payments in advance of future ticketing contracts.

“Those days are not over – our deals financially are very lucrative for venues and teams, but the reality is that when we’re competing head to head, these large cash advances have been common practice and in some cases it’s expected and even required.

“I believe in my company and I believe in my industry. Do I think we’re going to go through $100 million? I hope not. If it takes that much money, I’m not sure we’re in the right business.” — Dave Brooks
Interviewed for this article: Jeff Kline, (216) 466-8055

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Green Seals The Deal For Centerplate At Niagara, GetTix Switches To Veritix

30 Jul

Rendering of the proposed Niagara Convention & Civic Center in Niagara Falls, Ontario

Venue: Niagara Convention & Civic Centre, Niagara Falls, Ontario

Concessionaire: Centerplate

Deal: Five years with a five-year renewal option, percentage-of-the-gross contract. There is no investment on Centerplate’s part.

Comments: Green was the color of the game when the private management company for the venue, Niagara Convention & Civic Centre selected Centerplate, said Kerry Painter, venue president and general manager. “Centerplate has a strong presence in the convention center industry and recognizes the needs of our conventioneers,” she said.

But most importantly, they grasped the culture of Niagara and the emphasis on green and locally grown. In fact, the convention center will have a Kitchen Garden located across the street on land donated by the monastery there. It will be designed by the university, which is combining its horticulture students with chef, kitchen and culinary students to come up with a kitchen garden that is sustainable.

Centerplate jumped on the idea, and enhanced it with its own programs, such as buying meat and produce within a 100-mile radius as much as possible and working with the 90 local wineries, she said.

The 280,000 sq. ft., $100 million convention center will open April 8, 2011, Painter said. It also includes a 1,000-seat theater. Centerplate will staff a cafe, a permanent concessions stand and lots of portables.

In the last six months, Painter has contracted most of the services, including AVW Telus for audio visual; Showtech for electric; and Strongco as decorator. On her list of outstanding items is a security firm. She hopes to have one on board in the next two or three months.

Interviewed for this story: Kerry Painter, (905) 357-6222

Company: GetTix.Net

New BackEnd Provider: Veritix

Changeover Date: Aug. 8.

Deal: Five years. Veritix will provide the backend platform for GetTix.net, a full service provider.

Comments: Veritix replaced Paciolan. Charlotte Allison, vice president of business development for GetTix.net, cited flexibility, including pick-a-seat rather than best-available technology, which flows over not only online but to kiosks, using the same type of environment, as reasons the company chose Veritix. “We actually have several clients interested in coming with GetTix and that was one element they wanted,” she said.

“Also, promotionally there is a lot of flexibility – you can up-sell. A new salesman can be selling for the first time in under five minutes because it is a Windows environment, point and click,” she said. “That’s what wowed us.”

Veritix President Jeff Kline said the regional ticketing business has been good to his company. Last year, the firm inked a deal with ArtTix, a Salt Lake City firm that powers the Utah Jazz basketball team.

“It’s good business for us. They have multiple locations and have the ability to grow their platform and expand their reach,” he said, later adding. “It’s a well known organization and takes advantage of the Veritix platform, so for us, it was a good fit.”

GetTix was founded in 2004 as an arm of Global Entertainment Corp. (GEC), a public company, which also manages venues under its Encore Facility Management arm; sells sponsorships (GEMS-Global Entertainment Marketing Systems); owns the Western Professional Hockey League, dba CHL (Central Hockey League); operates a construction arm, ICC (International Coliseums Company), and a food service, GEC Food Service, LLC.

Allison was brought in a year ago to secure additional ticketing contracts outside of Encore-managed buildings. GetTix has contracts with Encore-managed Allen (Texas) Events Center; Independence (Mo.) Center; and Tim’s Toyota Center, Prescott Valley, Ariz. They will also handle the Dodge City Events Center when it comes on line in February 2011. “We use the building as a hub and develop around that market. You build it as you go,” Allison said.

The newest client for GetTix.net is Brand.Live, a marketing firm out of Vancouver, B.C., which produces festivals. The new alliance brings Veritix its first international client, Allison said.

GetTix clients outside the GEC family include the Yavapai County Fairgrounds in Prescott Valley, Ariz.; the town of Addison, Texas; a promoter partner, Rozone Productions, in Austin; Austin Turf Cats of the Indoor Football League; Claremore (Okla.) Expo Center; El Rey Theater in Albuquerque, N.M.; Star Shuttle and Charter, Austin; Checkered Flag Productions; and Dodge City (Kan.) Raceway

Growth for GetTix.net is in the mid-size markets, Allison said, adding they are definitely expanding more in the venue space. “Canada is the great frontier.”

It took a year to do the deal with Veritix, she added. There were a lot of parameters to discuss, she said. — Linda Deckard

Interviewed for this story: Charlotte Allison, (214) 341-2495, Jeff Kline, (216) 466-8055

TicketSummit Comes Into Its Own, But Talk Still Centers On Live Nation

28 Jul

TicketSummit’s keynote panel included (from left) Jeff Kline of Veritix, Doug Lyons of Tickets.com and Don Vaccaro of TicketNetwork.

REPORTING FROM LAS VEGAS — In its fifth year, Ticket Summit enjoyed a record attendance over its recent three-day run, with more teams, primary ticketing companies and ticket brokers participating than ever before. Attendance was estimated at just over 600 with a trade show that hosted nearly 25 exhibitors.

The success of the July 14-16 conference was in contrast to the difficult market conditions facing the hundreds of ticket brokers in attendance. Tickets continue to sell below face value for many concerts, consumers continue to wait until the last minute in hopes of snatching up discounted offers and acts that were once guaranteed to sell out arenas are now cancelling concerts because of slow ticket sales.

Recent show cancellations for Rhianna, Jonas Brothers and Christina Aguilera are “horrible for the industry. It’s horrible for everyone in this room,” said Don Vaccaro, CEO of TicketNetwork, which owns and hosts the annual show. Speaking of a recent industry trend to dynamically price tickets to meet market conditions Vaccaro said, “As long as the price is going up, it’s a business model that works. If they dynamically price tickets so they go down, consumers wait until the last minute to buy tickets.”

Coinciding with the conference was an investor call by Live Nation Entertainment that helped set the nervous mood at the conference. CEO Michael Rapino and Chairman Irving Azoff warned investors that ticket sales were down 10 percent for the top 100 tours during the first half of the year, and forecasted a 15 percent drop for the second half of the year. The announcement inadvertently prompted a sell off of the Live Nation stock and a two-day, 22-percent drop in price, the largest for both days on the New York Stock Exchange.

“I think it’s going to be a long time before we see anything positive for this market,” said Vaccaro during the conference’s keynote panel, which also included representatives from Veritix and Tickets.com

Since the Justice Department approved the merger between Live Nation and Ticketmaster, the business development market has opened back up. Paciolan, which was spun off to Comcast-Spectacor, has re-signed over a dozen clients in the past 60 days, while Cleveland-based Veritix has inked deals with the Final Four and Frozen Four.

“For the longest time during the merger talks, the sales pipeline froze because everyone took a wait-and-see attitude. Now that the merger has been announced, everyone is looking at next steps,” said Jeff Kline, president of Veritix.

Kline said his company is trying to leverage its technology and Flash Seats platform against Live Nation’s ability to bring content and concerts to potential client facilities.

“It’s easy on their part to use content as a unique sales proposition,” said Kline, adding that many facilities have expressed a fear that if they sign with anyone besides Live Nation, they’ll lose concerts. While the merged company is not allowed to retaliate against facilities that go with Tickets.com or Veritix, they are allowed to bundle content deals into their agreements.

“It’s a very subtle and important difference,” Kline said.

Doug Lyons, newly promoted VP of Product Marketing & Strategy for Tickets.com, said the other competitive tactic Live Nation attempts to use to corner the marketplace is upfront payments, often worth millions of dollars, in exchange for ticketing contracts.

“They’re still trying to use the old model to use money to influence how deals are made,” he said. “Executives at buildings are no longer just looking at money. They’re looking at technology.”

But not all technology is treated equally. It was Ticketmaster which introduced a paperless ticketing system for a number of concerts over the past 18 months that sought to close out brokers by making concert tickets non-transferable. The practice was outlawed in the state of New York after intense lobbying efforts by companies that included TicketNetwork and eBay.

“I’m not sure (paperless was) that big of an innovation,” Lyons said. “It’s just trying to address some business requirements. I think the innovation will come when we start expanding our technology to work with other technologies.”

Kline offered similar sentiments.

“Clients are looking for an integrated technology solution,” he said. “It’s not enough anymore to just sell tickets. — Dave Brooks

Interviewed for this article: Don Vacarro, (860) 870-3400; Jeff Kline, (216) 466-8055; Doug Lyons, (416) 573-0568

NY Law Puts Restrictions on Paperless

18 Jul

The state of New York has adopted the first law attempting to regulate the growing paperless ticket market. On July 2, New York Governor David Patterson signed the bill, limiting the ability of ticketing companies and producers to force consumers to use paperless tickets.

The law requires artists, promoters, sports teams and venues to purchase traditional paper tickets if the seller does “not allow consumers to transfer their tickets independent of the operator.”

The law essentially blocks a growing practice by Live Nation and its ticketing system Ticketmaster of blocking fans from reselling and even transferring tickets to high demand events. Under Ticketmaster’s present paperless system, only the original buyer of the ticket can redeem the ticket at the door using the credit card used in the purchase.

The law also provided an extension to New York’s ticket resale law, which had expired in June and had temporarily made ticket resale illegal. It also banned the use of computerized bots to purchase tickets.

The law is a win for ticket brokers and resale platforms like StubHub, which had lobbied hard to fight paperless technology as anti competitive and anti-consumer.

“The new law passing in New York is a great win for consumers, as it allows for a truly open marketplace,” said StubHub spokesperson Joellen Ferrer.

During a June 2 hearing on the bill, a number of sports executives testified about the impact of paperless tickets and several state senators indicated they were considering an outright ban on paperless tickets.

“We believe in and we support transferability,” testified Randy Levine, president of the New York Yankees. He argued that the technology is too new and that the state legislature shouldn’t yet put restrictions on paperless tickets until it was better understood.

“If an artist for a show wants to provide ticketing directly to their fan club, or decides to utilize paperless ticketing, it is the artist’s prerogative to do that,” said Joe Lhota, executive VP of Government Affairs for Madison Square Garden in New York. He said a number of artists have “initiated efforts to thwart the brokers and scalpers and to drive as many first-sale, face-value tickets into the hands of their true fans.”

Lhota said banning paperless ticketing will weaken the ability of artists to sell directly to fans and push concerts into other states.

“Paperless ticketing technology is evolving, and rather than ban or limit its growth in New York,” legislators should “pass legislation that will be flexible enough to create a transferable paperless option,” Lhota said.

The losers in the deal are ticketing companies like Ticketmaster, which had sought to corral the high prices associated with ticket resale, as well as artists and agents who wanted to limit the number of tickets that end up in the hands of scalpers.

Live Nation’s Investor Relations Spokesperson Linda Bandov said the company would not comment on the resale law.

Veritix also maintains a paperless ticketing system, although its system likely will comply with the law because under most circumstances, the platform allows for both paperless and traditional fulfillment of tickets (there are some events, like student ticketing for the Final Four, where only electronic tickets are issued).

“We believe wholeheartedly that there should be a free market opportunity to buy and sell tickets digitally,” said Jeff Kline, president, Veritix. “We’ve always believed that the content owner should choose how they distribute their tickets.”

Kline also said that paperless tickets are often misunderstood by lawmakers.

“There are people out there who think it’s restrictive, and actually it’s just the opposite,” he said. “Paperless ticketing provides the ultimate flexibility.” — Dave Brooks

Interviewed for this article: Joellen Ferrer, (415) 308-8209; Randy Levine, (718) 293-4300; Joe Lhota, (212) 465-6000; Jeff Kline, (216) 466-8055

Winners and Losers of LeBron James’ Move to Florida

16 Jul

LeBron James

LeBron James’ announcement that he was leaving Cleveland for the sunny beaches of South Florida on Thursday sent shockwaves through the basketball world. By teaming up with Dwayne Wade and newly signed Chris Bosh on the Miami Heat, James now joins the only NBA team with three of the league’s top 10 scorers, and anything short of a championship next season will be a major disappointment.

The move means a decent-sized payday for James ($96.1 million over 5 years), but more importantly, the move will have wide ranging implications for a number of teams and companies. Below, Venues Today looks at the winners and losers of “The Decision.”

WINNER – MIAMI HEAT: Within 72 hours after the announcement, the team had sold out all of its available season tickets inventory, with cheap seats moving for $484 annually, all the way up to courtside seats for $125,000, said Michael McCullough, chief marketing officer for the Heat. Premier inventory, including club seats and the team’s 20 suites, are also sold out. The team has sold out its initial run of James’ replica jerseys ($39) at its indoor arena store and mall retail location. Higher-end jerseys will hit the market in the coming weeks.

“We’ve been through something similar in 2004 when we acquired Shaquille O’Neal. We have a great deal of experience from that go around and we’re implementing a lot of that learning,” said McCullough. “One thing we decided was not to implement season tickets on our 400 level, which is a balcony level with 3,400 seats.”

The team is leaving that inventory for group tickets, individual tickets and partial plan tickets once the schedule is released.

LOSER – CAVALIERS: To say Dan Gilbert, owner of the Cavaliers, was unhappy about James’ leaving his team would be a huge understatement.

“If you thought we were motivated before tonight to bring the (NBA Championship) to Cleveland, I can tell you that this shameful display of selfishness and betrayal by one of our very own has shifted our ‘motivation’ to previously unknown and previously never experienced levels,” he wrote in an open letter to James on the team’s website. NBA commissioner David Stern fined Gilbert $100,000 for the emotional missive.

Because of the league’s salary cap rules, the team is restricted on how much it can spend to acquire new players. Since acquiring James in 2002, the team has nearly tripled its value to almost $500 million, according to Forbes.  NBA.com reports that James’ jersey is the number two selling jersey in the league. From 2002 to 2009, attendance averaged 809,551 at the Cavs’ Quicken Loans Arena — up approximately 40 percent from the seven prior years before the signing. Before James, the Cavs rarely had a nationally televised game. Last season, 25 games were broadcast on national cable and broadcast networks.

LOSER – VERITIX: The Cavaliers were often considered the flagship franchise for ticketing provider Veritix, owned by Gilbert and managed by President Jeff Kline.

Kline said he could not comment on James for this article, but he did indicate in past interviews that the star had generated big bucks for the team’s secondary platform. During the Cav’s Jan. 21 home game against the Los Angeles Lakers, Veritix’s Flash Seats program had generated $2 million in secondary ticket sales for the team, resulting in $500,000 worth of service fees.

Making matters worse, 2010 was the first post-season the Cavaliers were allowed to use Flash Seats to move playoff tickets because of a previous agreement with Ticketmaster. Besides the Cavs, Veritix has three other NBA clients but only one other team made it to the playoffs this season — the Utah Jazz. On Tuesday, the Jazz lost its star player Carlos Boozer to the Chicago Bulls.

WINNER — SECONDARY TICKET SITES: Broker listing sites like StubHub and TicketNetwork might see more Miami tickets listed on their site than they did when James played for Cleveland. Veritix’s Flash Seats program provided a paperless ticketing platform that made it simple for fans to buy and resell their tickets on an official marketplace, and paperless adoption rates hit nearly 70 percent during the Cav’s brief playoff run. Miami’s American Airlines Arena is a Ticketmaster building that uses TicketExchange, a secondary listing site that doesn’t offer paperless, and often has much less secondary inventory than StubHub.

WINNER – ORLANDO MAGIC: “There’s a good buzz about a potential rivalry between the Magic and the Heat, which never had that much intensity in the past,” explained Allen Johnson, director of Orlando (Fla.) Venues. “Anything that helps basketball in Florida is great, because we’re considered a football state first,” he said.

Orlando, which has made the Eastern Conference twice in the last two years, is in the same division as the Heat, adding to the intensity of the rivalry.  The two teams first face each other on Oct. 22 for a pre-season game at the St. Pete Times Forum in Tampa Bay, Fla. – Dave Brooks

Interviewed for this article: Michael McCullough, (786) 777-4103; Allen Johnson, (407) 810-3055

Jeff Kline, the Future King of Colleges?

12 Jul

Cleveland-based ticketing company Veritix has signed one of its most high profile clients to date, bringing the National Collegiate Athletic Association into the fold with a deal to represent all championship events. The deal solidifies Veritix’s presence at the popular March Madness tournament and sets in motion plans to secure a number of other top rated college events. Venues Today recently caught up with Veritix President Jeff Kline to discuss the agreement.

Does this cover all NCAA championship games?

It’s for select NCAA championships because some will roll into our agreement as their current agreement with their provider expires, like the College World Series. We’ll be doing the Final Four this year in Houston, but some of the regional games will continue to be honored with different providers. The intent is for all NCAA Championships to roll into the agreement, which we’re thrilled about.

Does that include the Bowl Championship Series for NCAA football?

No, those are separate. The Final Four and the Frozen Four are included, and we’re in discussion right now for the College World Series, which has some time left on the existing agreement. We’ll also be doing archery, badminton and soccer plus a number of additional events.

How is Flash Seats going to be implemented in this agreement? Will it be a similar experience to purchasing tickets to a Rockets or Cavs game?

No. The agreement we have in place includes three components. Component number one is that we will be the exclusive ticketing provider for the select event. Part two is that the NCAA will use our platform to take reservations for subsequent championships, and then fulfill the orders. The third part of our agreement calls for the continued use of Flash Seats for student ticketing, like we have done for the last three years.

Will Flash Seats be used for resale?

No. We’ll provide the digital technology for the student sections where transfer and resale is not allowed.

And the tickets will be tied to their student ID cards?

Correct.

Will you be active in trying to stop resale at the Final Four?

That’s really got to come from the NCAA. They have their own policies in place and we have the platform and technology to help them do that if they choose to do so. They have a current agreement in place with Razorgator to provide secondary tickets.

How was this deal reached?

It started two years ago at the Final Four in Detroit when the NCAA came to us, looking for an alternative platform for student ticketing. Not only is it meant to sit atop any primary ticketing system, it’s also portable. You can take a few routers and scanners and be set up. It worked so well that during this year’s Final Four in Indianapolis we repeated what we did the previous year. We went to a venue that had another ticketing company as their primary provider, we set up Flash Seats for student tickets, and emailed the buyers. Tickets were associated with their unique ID and they were able to gain access to the venue. Plus we knew who each student was because they couldn’t transfer their tickets. That gave the NCAA exposure to our company, and when they sent out an RFP last year, we responded and were awarded the business.

It’s a very prestigious client. Is this your first entrance into the college market?

No, we have Boise State on our client list. We also sell tickets for Texas A&M and Oral Roberts University. We are thrilled that we were selected and this opens the doors for us to have more opportunity in the collegiate space.

That part of the market seems to have a lot of opportunity. Paciolan just announced that it has re-signed 10 clients in the past 60 days. What is Veritix’s strategy going forward?

We see it as a definite opportunity for us. We’re in the collegiate space and it’s no secret that we don’t have as many collegiate clients as Paciolan, but there are plenty of challenges and opportunities.

It’s been about six months since the Department of Justice handed down the consent decree, essentially forcing Ticketmaster to spin off Paciolan to Comcast-Spectacor and license its software to AEG. The obvious goal of this agreement was to make the ticketing space more competitive. Has it worked?

Since the merger, we’ve seen the market opening up a little bit for choices. People are looking for alternatives and the adoption of Flash Seats continues to grow. Almost 70 percent of people coming to the Cleveland Cavaliers playoffs game were all digital. We did a concert in Houston where 66 percent of the people who walked through the door were digital, so obviously the adoption of our technology is growing. – Dave Brooks

Contact: Jeff Kline, (216) 466-8055