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Lawsuit Claims Ticketmaster Involved In Secondary Market

LOS ANGELES (CelebrityAccess MediaWire) — Chuck Lombardo of secondary ticket broker Elite Entertainment, has filed a lawsuit against Ticketmaster, alleging among other charges, that the ticketing giant breached a contract to purchase Elite Entertainment and provide a 3-year employment contract for Mr. Lombardo.

Elite was one of the six secondary brokers Ticketmaster approached in connection with its "Project Showtime" plan which would have seen Ticketmaster feeding blocks of premium concert tickets directly to the secondary market for resale to consumers at higher than face-value. A portion of the proceeds realized from these sales would then have been shared with artists and their reps with an eye towards challenging Live Nation's growing strength in the touring industry.

Negotiations broke down before Project Showtime could be fully realized but elements of the plan appear to have moved forward anyways. In the lawsuit, Lombardo alleges that after negotiations for Project Showtime ended, he was retained by Ticketmaster as a consultant.

The lawsuit, first reported by Ticket News, alleges that Ticketmaster provided tickets to major touring artists such as Van Halen, Kanye West, and Journey, directly to Lombardo to resell at higher than face-value prices and agreed to pay Lombardo 6% of the gross ticket sales.

Lombardo also alleges that he entered directly into an agreement with Irving Azoff's Front Line Management to broker tickets to the Eagles 2008-2009 tour. The Eagles are managed by Irving Azoff, the current CEO of Ticketmaster Entertainment.

These allegations would appear to fly in the face of previous statements Mr. Azoff made during congressional testimony that if he had been CEO when Ticketmaster acquired secondary ticketing broker TicketsNow, he would have been against the idea nor would Ticketmaster have attempted to profit from online ticket scalping.

Additionally, the allegations in this lawsuit, if true, would appear to play to the worst fears of many secondary brokers who believe that a merger between Live Nation and Ticketmaster would effectively shut them out of the e-scalping business. Other brokers have expressed concerns over Ticketmaster's new paperless ticketing system, which they claim would allow Ticketmaster to tightly control the secondary ticketing market.

Ticketmaster did not respond to a request for comment on this matter. – CelebrityAccess Staff Writers