PRS for Music CEO Andrea Czapary Martin, whose society is suing Live Nation. Photo Credit: PRS
PRS for Music is suing Live Nation over the promoter’s alleged failure to properly account for and make payments on revenue from VIP packages.
London-based PRS’ litigation, spearheaded specifically via the U.K. High Court’s Intellectual Property division, entered the media spotlight in reports across the pond. Of course, the plaintiff deals in licenses for the public use of musical works – including at festivals and concerts.
Letting PRS’ website take the wheel for a moment, when it comes to “popular concerts,” promoters and “venues are charged a proportion of gross box office receipts…four percent minimum from July 2018 onwards, which we then divide to give each work a value for the number of seconds that it was performed.”
Meanwhile, festival “rates are often a combination of those we use for classical and popular concerts,” with different rates yet in place “for very large live events.”
Overall, the licensing framework is rather directly tied to the mentioned “gross box office receipts,” or the total revenue of an event’s sold tickets. Though that point seems straightforward enough from the perspective of traditional passes, Live Nation (along with others) is certainly leaning into superfan-geared VIP attendance options.
During the Ticketmaster parent’s Q3 earnings call, execs emphasized plans to continue pushing premium tickets in the fourth quarter and beyond. For Q3 itself, “VIP ticket premium revenue at major festivals,” referring to those with north of 100,000 attendees, was “up more than 20%,” per the company, as “revenue for amphitheater VIP clubs increased by 19%.”
Running with the details, as described by London’s Complete Music Update in more words, the value of VIP tickets boasting perks that have a “nexus with the public performance” would be included entirely in gross-receipt calculations.
That category encompasses but isn’t limited to pre-show performances and special viewing areas. On the other hand, perks lacking this “nexus,” like non-music meet and greets, merch, and beverages, wouldn’t factor into VIP tickets’ gross receipts.
While it perhaps goes without saying in light of the complaint, the nexus consideration leaves the door open for arguments concerning the exact portion of revenue subject to royalty payments. Bearing in mind Live Nation’s larger-than-ever pile of premium-pass revenue as well as higher-ups’ aggressive VIP plans, these arguments have evidently reached a boiling point.
Quotes from the actual payment-calculation complaint are few and far between at present, but PRS for Music in a lengthy statement underscored the need for “full and accurate reporting of all ticket types, including VIP tickets and other ticket bundles and packages.”
In the same statement, PRS, which is also facing a lawsuit over alleged fee-structure shortcomings, took aim at the leading promoter’s alleged “disregard” for the licensing requirements at hand. DMN reached out to Live Nation for comment but didn’t receive a response in time for publishing.