Former Ticketmaster executive Stephen Mead was sentenced this week after pleading guilty to conspiracy to commit computer intrusions charges earlier this year. Mead, a British national, has been ordered to pay $67,970 as a forfeiture, and sentenced to one year of supervised release.
Mead’s charges stemmed from a case that involved Mead and a fellow Ticketmaster employee illegally accessing the systems of a rival ticketing company – Crowdsurge. Mead and that co-conspirator – another former Ticketmaster executive named Zeeshan Zaidi – have both admitted fault in a scheme that involved gathering confidential information and sharing it with others in the Live Nation corporate family, information which was then used to poach Crowdsurge clients and drive the company out of business.
Zaidi previously pled guilty to a similar charge in 2019, but has not yet been sentenced.
Ticketmaster itself entered a plea agreement with federal prosecutors in New York in 2020, paying a $10 million fine to avoid prosecution. The Department of Justice told BBC that it had completed the terms of the deferred prosecution as of July 2024.
FURTHER READING | Ticketmaster Avoids Hacking Prosecution by Paying $10 Million Fine |
While the Crowdsurge affair was not directly referenced in the DOJ antitrust lawsuit against Live Nation and Ticketmaster filed earlier this year, though the incident certainly reflects the sort of behavior that competitors have long alleged that the corporate behemoth at the center of the global entertainment industry engages in.
“Live Nation’s monopoly, and the anticompetitive conduct that protects and maintains its monopoly, strikes a chord precisely because the industry at stake is one that has for generations inspired, entertained, and challenged Americans,” reads the DOJ’s complaint in that case. “Conduct that subverts competition here not only harms the structure of the live music industry and the countless people that work in that industry, but also damages the foundation of creative expression and art that lies at the heart of our personal, social and political lives.”
FURTHER READING | Live Nation and Ticketmaster Targeted in Landmark Antitrust Lawsuit
What Mead and Zaidi Admitted to While Ticketmaster Employees
Mead came to Ticketmaster’s TicketWeb subsidiary in 2013, having previously served as Senior Vice President for Global Operations and General Manager for North America at Crowdsurge – a company that operated a music discovery platform and a separate ticketing operation aimed at allocating tickets to artist’s fan clubs for presales.
Despite his signing of a strict non-disclosure agreement with his former company (and Live Nation’s inclusion of its own agreement that he not violate that pact by sharing proprietary information as part of his hiring process), it was less than a month into his tenure that Ticketmaster executives began asking him to share information about his former company’s strengths, weaknesses, and areas where they could be exploited.
“During [communications regarding information Mead had obtained while working at Crowdsurge]Executive-2 described how the goal was to “choke off [Victim Company]” and “steal back one of [Victim Company]’s signature clients,” the indictment reads, in part. “MEAD responded by offering that they could “cut [Victim Company] off at the knees” if they could win back presale ticketing business for a second major artist by offering the same ticketing fee structure that the Victim Company gave to the second artist.”
Soon after, Mead and others within Ticketmaster moved on to directly accessing Crowdsurge systems, sharing proprietary insight into the company’s operations and fee structures with an ever-increasing circle that included company officers at the highest level – including then-Ticketmaster President Jared Smith and Michael Rapino, who was then and remains Live Nation Entertainment’s CEO. Within months, both Zaidi and Mead received promotions and pay raises.
The scheme began to fall apart beginning in 2014 when one of the Live Nation executives privy to the illegal intrusion resigned and subsequently joined Crowdsurge, which merged with Songkick in 2015. Passwords known to Mead and shared with Zaidi and Ticketmaster/Live Nation management began to change, and a civil complaint was filed alleging antitrust violations in 2015, later amended to include allegations regarding the illegal access to the system as a part of that illegal conduct. By 2017, documents detailing the illegal access to the system by Mead and Zaidi had been made public as part of that lawsuit, and both were fired.
Live Nation later settled that lawsuit by purchasing the remaining Songkick/Crowdsurge assets (the music discovery business had previously been sold to Warner Music Group) for $100 million in 2018 and ending the lawsuit. It only cost an additional $10 million in fees to put the entire legal matter to bed three years later – until this latest wrinkle.
“Ticketmaster employees repeatedly – and illegally – accessed a competitor’s computers without authorization using stolen passwords to unlawfully collect business intelligence,” Acting U.S. Attorney Seth DuCharme said in a press release issued announcing the settlement of the criminal charges against Ticketmaster in 2021.
“When employees walk out of one company and into another, it’s illegal for them to take proprietary information with them. Ticketmaster used stolen information to gain an advantage over its competition, and then promoted the employees who broke the law. This investigation is a perfect example of why these laws exist – to protect consumers from being cheated in what should be a fair market place,” added FBI Assistant Director-in-Charge Sweeney.
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