Former Ticketmaster executive Stephen Mead entered a guilty plea in a New York court this week to one count of conspiracy to commit computer intrusions, one of several charges he faced in a 2021 indictment. Those 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 have 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.
As part of his plea in the scheme, Mead agreed to forfeit $67,970, according to Law360.com, which first reported the plea deal. A UK national, Mead has a sentencing hearing in September. Further details of his plea agreement are not available at this time.
His co-conspirator in the case, another former Ticketmaster executive named Zeeshan Zaidi, pled guilty to a similar charge in 2019. Ticketmaster itself entered a plea agreement with federal prosecutors in New York in 2020, paying a $10 million fine to avoid prosecution.
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The Crowdsurge affair was not mentioned in the sprawling antitrust case filed last month by the Department of Justice against Live Nation and Ticketmaster alleging years of violations of the Sherman Act. But the timing of this plea deal seems to indicate it is at least possible that Mead’s story is part of what may yet unfold as that case unfolds in the coming months, and years.
“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.”
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Mead’s indictment largely echoes information already unearthed as part of one of the previous investigations into the scheme. 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.
Mead remains in the United States while this matter is sorted out, having forfeited his passport to federal authorities. He is out on bail, but limited to staying within the boundaries of New York’s Eastern and Southern district court jurisdictions, which consist of the city itself, Long Island’s Nassau and Suffolk counties, and Rockland, Westchester, Putnam, Orange, Dutchess, and Sullivan counties north of the Bronx.
