Does Ticketmaster only pay you after the event?

When it comes to getting paid for ticket sales on Ticketmaster, there are a few key things to understand about their payment process and timeline. In short, Ticketmaster does not pay event organizers and venues all their money upfront when tickets are sold. Rather, payments are issued on a scheduled cadence after the event takes place.

How Ticketmaster Payments Work

Ticketmaster utilizes a tiered payment schedule to pay event organizers and venues. This schedule is based on when ticket revenue is actually collected by Ticketmaster from ticket buyers. Here is an overview of how it works:

• Advance Payments: These are periodic payments made in the weeks and months leading up to an event, before any tickets have been sold. The amount is usually a percentage of the venue’s estimated potential ticket sales for the event.
• On-Sale Payments: As tickets start selling when they first go on sale, Ticketmaster will make payments to the venue based on a percentage of actual sales so far.
• Post-On Sale Payments: After the initial on-sale period, Ticketmaster makes weekly or monthly payments as more tickets are sold, again based on a percentage of sales.
• Settlement: The final payment is made after the event takes place and all ticket sales have been settled and collected. This settlement reconciles the total ticket revenue earned.

In most cases, Ticketmaster retains a portion of the ticket revenue as their fee for providing the platform and ticket sales services. The event organizer and venue receive the remainder of the revenue after all fees are deducted.

Why This Payment Schedule Exists

Ticketmaster utilizes a tiered payment schedule, rather than paying the full amount upfront when a ticket is sold, for a few key reasons:

• Mitigate Risk: There is always a chance that an event could be canceled or have very low attendance. By spreading payments out over time, Ticketmaster reduces the risk of paying large sums for events that end up not happening or generating much revenue.
• Match Cash Flow: Paying out ticket revenue incrementally better aligns with how Ticketmaster itself collects payment from ticket buyers over time. Rather than taking on the cash flow burden of large upfront payouts, this schedule matches incoming and outgoing cash flows.
• Account for Fees: Part of Ticketmaster’s fees are collected upon initial ticket sales, while other fees are collected right before the event takes place. The payment schedule allows for reconciling all fees before final settlement.

The tiered schedule essentially shifts some of the financial risk and cash flow timing from Ticketmaster onto the event organizers and venues. However, it provides assurance that venues will steadily receive increasing payments as more tickets get sold.

Exceptions and Special Cases

While the tiered payment schedule is Ticketmaster’s standard practice, there can be some exceptions and special provisions in some cases:

• Upfront Deposits: For very large events or venues with significant stature, Ticketmaster may provide larger upfront deposits and advance payments beyond their normal schedule.
• Accelerated Payments: Depending on specific negotiated contracts, some event partners may be able to receive accelerated payments faster than the normal schedule.
• Guarantees: Ticketmaster may guarantee a venue a minimum payout, regardless of how many tickets are sold. This provides the venue some downside protection.

In general, however, Ticketmaster has significant consistency in utilizing their tiered payment schedule across most events and venues. The largest and highest-grossing partners have the most leverage to negotiate more favorable terms.

Getting Paid Faster

If you want to receive payments faster from Ticketmaster as an event organizer or venue, here are some tips:

• Negotiate an accelerated payment schedule into your contract if possible.
• See if you qualify for larger or more frequent advance payments.
• Sell more tickets quickly when they first go on sale to trigger higher on-sale payments.
• Minimize fees by driving more box office and direct online sales.
• Require ticket buyers to pay earlier to improve Ticketmaster’s cash flow.

Keep in mind that Ticketmaster’s tiered payment system is deeply ingrained, so you may have limited negotiating power unless you represent a very high-profile event or venue. If cash flow is a major concern, explore financing options like merchant cash advances as an alternative.

The Ticketmaster Payment Process

When a ticket is sold on Ticketmaster, here is a simplified overview of the payment process:

1. A ticket buyer purchases a ticket through Ticketmaster online, mobile app, phone, or in person at a venue box office.
2. Ticketmaster collects its fees from the ticket price either immediately or closer to the event date depending on the fee type.
3. The remaining ticket price is held by Ticketmaster as deferred revenue that will be paid to the event organizer and venue.
4. Per the negotiated payment schedule, Ticketmaster makes periodic payments over time to the venue/organizer as revenues are collected.
5. After the event occurs, Ticketmaster settles the remaining revenue and fees with the final payment.

In essence, Ticketmaster acts as a temporary escrow for ticket revenue, releasing it over time rather than upfront. This allows them to collect interest and optimize cash flow in the interim.

Pros and Cons for Venues

What are the potential pros and cons of Ticketmaster’s payment model for venues and event organizers?

Pros

• Steady revenue flow from ongoing periodic payments
• Do not have to wait until after the event for all revenue
• Lower financial risk if the event underperforms

Cons

• Delayed access to some ticket revenue compared to upfront payments
• Complex settlement process to reconcile all fees and revenue
• May impact cash flow for venue operations

Overall, Ticketmaster’s model does help mitigate risk for themselves and venues, but may create some cash flow timing challenges in exchange for that protection.

How Other Ticket Companies Handle Payments

While Ticketmaster is the largest primary ticket seller, some competitors and alternatives take different approaches to paying event organizers and venues, including:

As you can see, payment models vary across platforms, with some offering quicker payouts but also greater risk. Ticketmaster’s tiered schedule represents more of a middle ground approach.

Does Ticketmaster Make Money on Delayed Payments?

To some extent, yes – Ticketmaster is able to generate extra revenue from the delayed payments by temporarily holding ticket revenue before it is paid out to venues and event organizers. Specifically, they benefit in two key ways:

1. Interest: The deferred revenue that Ticketmaster temporarily holds can be invested or put into interest-bearing accounts during the delay before payment. Ticketmaster collects this interest revenue.
2. Float: There is a timing benefit or “float” from delaying payments out while having use of the cash. This provides Ticketmaster extra liquidity and flexibility for their own investments and operations.

By one estimate, the interest and float benefit alone from Ticketmaster’s payment model generates tens of millions in extra profit per year for the company beyond their regular fees. This demonstrates one of the financial incentives behind their payment approach.

Does Ticketmaster Pay Interest on Delayed Payments?

In most cases, no – Ticketmaster does not pay any interest to venues or event organizers on the ticket revenue they temporarily hold and delay paying out. Their contracts do not require Ticketmaster to compensate partners for the lost time value of money during the delay.

Some very large or influential venues and partners may be able to negotiate some concessions like modest interest rates on delayed payments. But for the vast majority, Ticketmaster assumes full control and benefit of the revenue float without sharing the interest upside.

This underscores how Ticketmaster’s model is structured to benefit their position, allowing them to gain incremental revenue from the delayed payouts.

Other Factors Impacting When You Get Paid

In addition to Ticketmaster’s standard payment schedule, a few other key factors can impact timing of payments:

• Banking/Transfers: The time for payments to clear and settle between banks accounts will add 1-2 days typically.
• Holidays: If payment dates fall on holidays or weekends, payments may be delayed until the next business day.
• Errors: Any issues like invalid account details or billing problems can delay payments until resolved.
• Volume: During peak sales times, high payment volume can lead to slight delays in transaction processing.

It’s worth monitoring bank transfers closely around expected payment dates and contacting Ticketmaster quickly if payments do not arrive on schedule. This can help minimize administrative delays.

Is Ticketmaster’s Payment Model Fair?

There are reasonable arguments on both sides of whether Ticketmaster’s payment model is fair or not:

Arguments That It’s Fair:

• It aligns risks between Ticketmaster and venues.
• The tiered schedule matches how revenue is actually collected.
• Venues still get steady incremental payments rather than zero upfront.
• Interest income partially offsets Ticketmaster’s risk and costs.

Arguments That It’s Unfair:

• Venues lose significant time value of money from delays.
• Interest and float strongly favor Ticketmaster.
• Little transparency on how much Ticketmaster profits from model.
• Vendors have limited ability to negotiate terms.

Overall there are good-faith reasons for why Ticketmaster utilizes this payment model. But the balance of financial power and transparency seems tilted strongly in their favor in most cases.

Should the Model Be Changed?

There are a few alternatives that could potentially improve the payment model:

• Shorten the delays between payment tiers.
• Provide vendors some portion of the interest/float income.
• Allow vendors to choose between upfront or tiered payments.
• Increase transparency on Ticketmaster’s exact revenue from model.

However, Ticketmaster currently has little incentive to make major changes given their significant market clout. Meaningful change would likely need to come through regulatory or legal action to balance the scales.

Conclusion

In summary, Ticketmaster utilizes a delayed tiered payment schedule to pay event venues and organizers over time as tickets sales are collected, rather than upfront when sales occur. This allows Ticketmaster to reduce risk and generate revenue from temporarily holding funds. While the model has some logic, concerns persist around fairness and transparency given Ticketmaster’s market dominance. Increased visibility into payments and revenue, along with negotiated flexibility for vendors, could help strike a better balance overall.