TO:Andrew P. Powers, City Manager
FROM:Jonathan Serret, Cultural and Community Services Director DATE:October 22, 2024
SUBJECT: Adjustment of Box Office Ticket Service Fee
RECOMMENDATION:
1. Adopt resolution approving adjustment of Cultural Affairs User Fee CA-18B, Box Office - Ticket Service Fee, for online ticketing service fees.
2. Find that this action does not constitute a project under California Environmental Quality Act.
LEVINE ACT ITEM: No
FINANCIAL IMPACT:
No Additional Funding Requested. Minimal staff time required to prepare the report is included in the Adopted FY 2024-25 Theatres Fund Budget. Adjustment of this fee is intended to keep the Theatres Fund whole and will minimally impact the adopted FY2024-25 Theatres Fund budget.
BACKGROUND:
In 2018, the City entered into Contract No. 11848-2018 with Ticketmaster to provide box office and ticketing services for the Bank of America Performing Arts Center (BAPAC) through June 30, 2025. Ticketmaster is a leading global ticketing service platform with significant market-share in southern California. As a part of the existing agreement, BAPAC uses Ticketmaster services in the box office and online, which provides consistency and convenience for purchasers. Although BAPAC pays specific fees for marketing and processing services, the existing agreement is based on a modified revenue-sharing model. In exchange for providing ticketing services and technology solutions such as: Point of Sale systems, computers, and ticketing scanners, Ticketmaster retains portions of service fees added to the face value of event tickets. The existing agreement expires this fiscal year (FY 2024-25) and there are no extensions remaining as per
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the contract terms. Cultural and Community Services staff are preparing to issue a Request for Proposals (RFP) later this year to solicit proposals from ticketing service providers with interest in the BAPAC venues.
Through the box office and online sales, BAPAC provides ticketing services utilizing Ticketmaster for public events taking place in the Fred Kavli Theatre and Janet and Ray Scherr Forum Theatre. The theatres are in use approximately 300 days of the year. Annually, approximately 235 events are sold through the box office and online, leading to the distribution of approximately 168,000 tickets.
These services are also provided for renters who present a wide range of programs, including: locally produced dance, musical theatre, concerts, speakers and lectures, and nationally touring headliners.
The City engages in biennial budget preparation, which includes adopted User Fee schedules. Every two years, staff review the existing User Fees and analyze costs and market trends to set fees fairly and transparently while maximizing cost recovery and remaining competitive within the industry. The current User Fee Schedule was adopted in 2023 as part of the FY 2023-24 and FY 2024-25 budget and went into effect on July 1, 2023.
DISCUSSION/ANALYSIS:
The price of an online-purchased ticket typically includes several components:
base ticket price, facility fees, service fees, processing fees, and credit card fees.
In 2024, the California legislature passed Senate Bill 478, a pricing transparency law. This law implemented an all-in pricing format across ticketing platforms. In compliance with the law, this model has been adopted by all online ticketing services as of July 1, 2024. Previously, ticket purchases were subject to additional transaction fees added on to the final price of tickets by online ticketing platforms.
The loss of these add-ons has led to a restructuring of service fee distribution within the City’s agreement and has resulted in less rebate revenue for the City’s Theatres Fund, which supports and operates BAPAC. The Theatres Fund operates within very narrow margins and cannot absorb the revenue loss as a result of this action. For this reason, staff are requesting City Council to adopt a resolution (Attachment #1) to adjust User Fee CA-18B, Box Office - Ticket Service Fee.
When crafting the agreement with Ticketmaster, BAPAC staff negotiated to minimize service fees and add-ons for patrons. As a result, the City’s venues have some of the lowest service fees in the greater Los Angeles market. This remains an important focus for staff as we seek to balance guest experience and value for our customers with evolving economic realities. Currently, Ticketmaster Service Fees applied to online purchases are tiered based on the face value of the ticket being purchased.
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Current online ticketing service fees as adopted in User Fee CA-18B, Box Office - Ticket Service Fee:
Ticket Face Value Per Ticket Online Service
Fee
$0.01 - $10.00 $2.00
$10.01 - $20.00 $3.50
$20.01 - $35.00 $6.00
$35.01 - $50.00 $7.00
$50.01 + $9.00
Staff is proposing an increase of no more than $1 for four of the ticketing tiers. As the costs of production for arts and entertainment events have increased, there has been a corollary rise in ticket costs as well. The vast majority of tickets for events taking place in the BAPAC theatres are in the top two tiers of face value, with the bulk being in excess of $50. For this reason, no adjustment is being recommended for the lowest tier. The goal of adjusting these fees is to keep the Theatres Fund whole through the remainder of FY 2024-25.
Proposed modification to online ticketing service fees within User Fee CA-18B, Box Office - Ticket Service Fee:
Ticket Face Value Per Ticket Online Service
Fee
Proposed Fee Increase
from Current Fee
$0.01 - $10.00 $2.00 N/A
$10.01 - $20.00 $4.00 $0.50
$20.01 - $35.00 $7.00 $1.00
$35.01 - $50.00 $8.00 $1.00
$50.01 + $10.00 $1.00
This adjustment allows the City to preserve the minimal service fees for patrons when purchasing tickets within the lowest tier of face value. A modest increase to the User Fee will enable BAPAC to maintain adequate revenue levels while continuing to offer our patrons the convenience of online purchasing with some of the lowest ticketing service fees through Ticketmaster in our regional market.
As staff prepare for the User Fees study for the upcoming biennial budget process, BAPAC fees will be evaluated in relation to the industry and the City’s competitive markets. Additionally, these fees will be among the criteria considered in evaluating proposals during the RFP process for online and digital ticketing systems and providers.
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COUNCIL GOAL COMPLIANCE:
Meets the following City Council goals:
B. Provide municipal government leadership which is open and responsive to residents, and is characterized by ethical behavior, stability, promoting public trust, transparency, confidence in the future, and cooperative interaction among civic leaders, residents, business representatives, and staff, while recognizing and respecting legitimate differences of opinion on critical issues facing the City.
C. Operate City government in a fiscally and managerially responsible and prudent manner to ensure that the City of Thousand Oaks remains one of California's most desirable places to live, work, visit, recreate, and raise a family.
G. Continue City's commitment to community and cultural programs and services (such as Performing Arts/Theatres, Libraries, TOTV, Visual Arts, Youth and Senior Programs).
H. Participate in public-private and multi-jurisdictional opportunities to ensure residents have access to high levels of parks, recreation, education and leisure programs and services.
Attachments:
Attachment #1 – Resolution
CCS:901-75\js\H:\COMMON\Council\2024\102224 Staff Report