Do Australia’s live artists, venues and concert-goers benefit from the rising domination of Ticketek and its stealthy Cayman Island corporate privateers? Callum Foote, Josh Barnett and Michael West investigate.
Few realise that when you buy a concert ticket, the money you pay for your night out meanders through a raft of furtive Australian entities to Singapore and thence California, to be ultimately controlled by unnamed directors in the Cayman Islands. That’s Ticketek.
Why is this important? Two of the greatest threats posed to Australia’s economic future are industry monopolies squeezing consumers and multinational tax avoiders syphoning profits out of Australia. Ticketek is emblematic of both.
While politicians are publicly scrapping over a few street protestors waving flags and who’s tougher on terror, there is a quiet campaign going on behind the scenes in Parliament by the business lobby and Coalition to junk Labor’s multinational tax avoidance reforms. Already, the proposals have been already severely watered down due to intense lobbying.
Yes, Labor is tougher on corporate tax dodgers … tougher, not tough.
So it is timely to look merely at one corporate case and one industry because the dominance of Ticketek enshrines two of the great challenges to Australia’s future: high industry concentration and foreign corporate tax avoidance.
What is Ticketek?
On the face of it, Ticketek is a ticket distributor, focusing on live music, sport and concerts in both Australia and New Zealand. Much Like Live Nation in the US, Ticketek has a large market dominance when it comes to ticketing in Australia. But that is not all they do.
Peel back the layers of this ‘Australian company’, however, and we find the assorted entities behind Ticketek enjoyed a tripling in income growth on the way out of Covid lockdowns since 2021. They have been on a shopping spree, extending their empire by buying smaller ticketing companies, venues, shows, catering firms, and promoters.
The company which owns Ticketek is called Amplify Bidco. Amplify Bidco raked up $912 million in revenue last year – a staggering leap from $378 million the year before – but even so, they made no taxable profit because the money they took from Australian concert-goers was ploughed back into the entertainment industry to buy more assets.
As you do. The greater the industry domination, the better Ticketek’s control over the market, therefore, prices; and secondly, if you spend your revenues buying other assets, you can make a loss, and if you make a loss, you don’t pay tax.
There is nothing inherently wrong with this; it is normal corporate behaviour. The question for policymakers and industry types is, does this foreign domination benefit local artists, venues … Australians?
The Babushka Doll
The American private equity dudes who control the Ticketek maze surely go to great lengths to make themselves hard to track.
Amplify Bidco is itself buried under eight levels of corporate structure (that we could find) and by the time you get to the top, you’re in the Cayman Islands.
But first, TICKETEK PTY. LTD is owned by TEG PTY Limited, thence by a veritable babushka doll of corporates from LIVE ENTERTAINMENT INVESTMENTS III PTY LTD, to LIVE ENTERTAINMENT INVESTMENTS II PTY LTD, to LIVE ENTERTAINMENT INVESTMENTS I PTY LTD to LIVE ENTERTAINMENT HOLDINGS PTY LTD to AMPLIFY FINCO PTY LTD to AMPLIFY BIDCO PTY LTD.
So far, all of the primary addresses for all these businesses have been Level 3, 175 Liverpool Street, SYDNEY, NSW 2000, but suddenly, we are off to Singapore because the company that owns Amplify Bidco – and therefore the other seven concoctions – is AMPLIFY PLEDGECO PTE. LTD.
And Pledgeco’s address is 9 Raffles Plaza, #26-01 Republic Plaza, Singapore. And because it’s a business in Singapore, it does not have to register with ASIC – but the trail does not run cold here because, luckily, ASIC requires you to list your ultimate holding company (if not the other intermediate companies before you get there).
And the top entity in the Australian deck of companies, Bidco, is ultimately owned by SILVER LAKE (OFFSHORE) AIV GP V, LTD.
Which in summary is an American company which is owned in the Cayman Islands. Who’s steering this ship? The key figures on the ASIC register here are Stephen Evans, Geoffrey Jones, and Michael Widmann – directors based in California.
Cui bono?
Their job? Keeping the wheels turning on this complex operation, making sure that profits flow smoothly, just not into the ATO’s coffers or back to the Australian music industry and its performers, but out to their private equity investors in the US and elsewhere.
If you expected a company pulling over half a billion dollars to be a significant taxpayer in the Australian economy, you were mistaken. Not so with Amplify Bidco. According to ATO data, this corporate giant has somehow managed to receive more in tax benefits and refunds than it’s paid in taxes.
Over the past few years, their tax bill has been a rounding error compared to their income. In fact, in 2022, they reported a tax refund of $20m. They paid just $2.5m tax in 2023 (despite revenue of $912m).
Checking the financial statements for Amplify Bidco, they raked out nearly half a billion dollars in interest payments to Singapore, made some acquisitions and bulked up their costs in Australia.
Ticketek is not free from controversy. In 2011, they were fined $2.5million by the ACCC ($) for using their monopolistic market share to cut out other competitors.
More recently, they suffered a data breach, meaning the information of their customers has been compromised. Rival Ticketmaster’s parent company, Live Nation, is currently being sued in the US over anti-competitive behaviour and “suffocating” its competition.
The lawsuit claims Live Nation-Ticketmaster has been strong-arming venues into exclusive contracts, leaving rivals out in the cold and fans with sky-high ticket costs. Despite its near-monopoly, the company has managed to evade regulatory crackdowns while raking in billions.
The ACCC might do well to put Ticketek on its watchlist, too.
Callum Foote was a reporter for Michael West Media for four years.
Josh is a professional musician and cameraman who is now working with Michael West Media to develop The West Report and other visual content across major social media channels