Ticketmaster’s China’s operations were officially shelved last week. The news was lost amongst the furore surrounding the Department of Justice approval of a Livenation/ Ticketmaster merger. Ticketmaster’s foray into the China market was one of the most entertaining corporate soap operas that we’ve ever been lucky enough to witness. This tale is best told via the history of the man who erected the house of cards. Who says China isn’t the wild East?
In May 2007, global ticketing behemoth Ticketmaster purchased the small, but high profile, ambitious and rapidly expanding China based promoters/ ticketers, Emma Entertainment. Rumors abounded that Jonathan Krane, founder of Emma Entertainment, had borrowed heavily to set up a company that looked good on the outside, but was very insubstantial once you scratched below the surface. Ticketmaster may not have done their due diligence adequately. This was 2007. Money was cheap. China was hot. The Olympics were coming. Ticketmaster needed to buy a ticketing agency. US$20m was the commonly considered fee. The Ticketmaster officials came to China, inked the deals, then returned to LA, not to revisit China until things started to go sour 18 months later.
Krane himself was not from a promotion or music background; rather he has been a mid-level real estate agent in New York at Cushman and Wakefield. He alighted in Shanghai in 2002 with a mandate not to bring music/ entertainment to China, but to make a packet of money. It was only when introduced to the guys from Midas Promotions (an Asian promoter with 25 years in the region) that he saw a gap in the market: why not establish a ticketing agency? No gigs – bring them in? Midas introduced him to Bob Sewell, a man who had set up Ticketworld in the Philippines. It was Sewell who was responsible for building the ticketing operation.
Krane’s first major coup was the Rolling Stones concert in Shanghai in 2005. Although the show must have lost a ton of money, it seemed to fit with a strategy designed to raise a profile rather than generate a sustainable business model for the China market. Less-than-comradely business practices were highlighted when Krane lured away two of the three partners at the then most prolific big show promoter, China West. Adam Wilkes and Robb Spitzer took with them the Linkin Park show that China West had been working on for quite some time, a show that ended up being the most significant Western artist concert in China ever.
Major catastrophes followed, with the all-new Emma Ticketmaster responsible for a string of disasters ranging from the infamous Bjork incident, to safety issues during an extensive Avril Lavigne tour, to the cancellations of both Oasis and the Celine Dion Beijing show. The latter was pure comedy. Krane went to Chinese media saying Dion had bronchial problems and couldn’t perform, while telling Dion that the government wouldn’t issue her permits pre-Olympics. In an unprecedented move, the Government came out publically to refute Krane’s explanation to the artist. Government officials told media that they had indeed issues permits for the show. Word on the street was that ticket sales in Beijing had been very, very slow, and as Dion was being paid $5m for 3 shows, it was more sensible to try and get out of the slowest selling show.
Wilkes and Spitzer departed in November 2008 citing “an impossibly political working environment”, followed by a major exodus of key employees including Alan DeZon and Jaime Welton (both now in senior positions at AEG China) plus numerous local operations staff. Krane’s final brainchild (and more than likely the reason he was pushed) was the riskiest of all. A massive music festival at the Shanghai F1 circuit in August 2009 – ill thought out in every way. The F1 circuit is 2 hours out of Shanghai (a city whose residents hate to travel) and in August -rainy season and 35-40 degrees.
To give Krane the credit that he is due, he was no work-shy scam merchant. Our belief is that he truly believed in what he was doing, and in his ability to pull it off. However, he was a gambler who kept making big and expensive miscalculations. Each new project was larger and more extravagant than the last, with the “profits” earmarked for the company bottom line, covering up the rapidly expanding holes in the balance sheet. He worked incredibly hard, he was charming and could work a room quite well, as long as he wasn’t in the presence of those who actually knew our industry very well. The ultimate embarrassment was when Emma Entertainment sponsored the live music panel at Music Matters 2008. During the panel, Krane (who was hosting) was savaged by at least two of the big players (Michael Chugg & Harvey Goldsmith) in what seemed like a premeditated onslaught. In front of a room of 400 peers, Krane was barracked and accused of distorting the Asian touring market, overpaying hugely for bands and having no idea of what he was doing. On the big screens, Krane was visibly panicked and had no riposte, stuttering and stammering to an undignified end.
Which, in the end, is an apt metaphor for Ticketmaster China. A company run into the ground by those that created it (an unnamed Ticketmaster source claims that during an internal meeting it was said that Krane lost the Ticketmaster inc. “enough money to keep all its employees comfortably for the rest of their collective lives”). Krane put China on the touring map, but in such a way that will take it years to recover from. He was audacious and brave, but should possibly have taken more from the playbook that discretion is the better part of valor. The stresses and strains that he was under were there for all to see towards the end.
One might hail the end of such an anomaly, but China is most definitely worse off with Ticketmaster China’s demise. Livenation are hardly active, AEG have apparently mostly pulled out of being promoters (after a single show), having just pulled in (key members of the music team have recently been recalled to LA), and we are left with a world similar to that of 10 years ago – dodgy promoters, nervous managers and agents, and a dearth of legitimate action at the top end of the industry.