Ticketmaster North America has reportedly furloughed a quarter of its employees after it was revealed that refunds worth $400m had already been handed out from COVID-19 cancellations and postponements.
Ticketmaster president Jared Smith informed hundreds of staffers that they will lose their salaries from May 1, Variety reports. Those affected will maintain their health benefits.
Smith said in the letter to employees, obtained by Variety: “For the very first time in the history of live entertainment, the industry is completely shut down — something that a few short months ago would have seemed incomprehensible.
“Since the beginning of this global crisis we have operated with the goal of staying true to our company’s core philosophy of ‘taking care of our own.’ This is why we continued to keep our team at full pay through March and April, even as the tens of thousands of events we support and sell ground to a halt.
“Without a doubt, this is the hardest decision I have faced in my tenure leading this great organisation, but it is one I feel is necessary to protect the future of our company.”
The issue of possibly furloughing staff had been raised two weeks ago in parent company Live Nation’s SEC filing, which indicated the entertainment giant was looking to cut $500m in costs.
As part of the cost reduction measures, Live Nation chief executive Michael Rapino announced he will forgo his $3m annual salary, as well as a new $120m credit facility to protect its concert business.
The filing said Live Nation was looking into further cost reduction efforts that include “hiring freezes, reduction in the use of contractors, rent re-negotiations, furloughs, and reduction or elimination of other discretionary spending, including, among other things, travel and entertainment, repairs and maintenance, and marketing”.
“We are entirely focused on getting back to business as soon as it is safe and sensible to do so, and in turn, protecting your job for the future,” Smith told furloughed employees in his letter. “We will continue to evaluate the situation and begin bringing back employees as soon as circumstances permit us to do so.”
The announcement follows a letter sent to Live Nation staff by Rapino detailing ticket refund policies, which has been criticised during the COVID-19 shutdown of events.
Rapino said that to date there are 50,000 events that have been cancelled, postponed or rescheduled globally on the Ticketmaster platform. He noted 60% of those events have been authorised for refunds, and over $400m has been returned to fans.
In addition, Live Nation has already refunded more than $80m to ticketholders.
Rapino said: “It is important to remind everyone that Ticketmaster is a platform, and does not hold on to money from client sales.
“In order to issue refunds, Ticketmaster must first get approval and funds from our clients. These event organisers of concerts, festivals, games or events set the policy on refunds, and Ticketmaster facilitates services accordingly.”
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