Brown Paper Tickets was an event registration and ticketing company based in Seattle, Washington. The company provided event registration and ticketing services to organizers of events of all sizes since 2000.
In May 2020, Brown Paper Tickets abruptly ceased operations and closed down their website. This led to speculation that the company had gone out of business. Customers were left confused as events were canceled and ticket holders were unable to get refunds.
So what exactly happened to Brown Paper Tickets? Did the company really go out of business? Let’s take a closer look.
Background on Brown Paper Tickets
Brown Paper Tickets was founded in 2000 by Steven Doucette, William Scott Jordan, and Matthew David Nugent in Seattle. The company aimed to provide a more affordable and accessible event registration and ticketing service compared to traditional ticketing giants like Ticketmaster.
Some key facts about Brown Paper Tickets:
- Provided online event registration and ticket sales for events of all sizes, from small local events to large conferences and festivals.
- Charged lower fees compared to competitors – just 5% per ticket + 99 cents per order.
- Had an easy-to-use system for event organizers to set up registration, promote events, collect payments, and manage attendees.
- Integrated with PayPal as well as major credit cards for ticket payments.
- Allowed free events to be listed and event organizers to process free registrations.
- Offered personalized customer support for event organizers and ticket buyers.
At its peak, Brown Paper Tickets was processing over $400 million in ticket sales annually and worked with over 10,000 event organizers. Their affordable pricing model and stellar customer service made them a popular choice for small venues, nonprofit groups, and niche events.
What Happened to Brown Paper Tickets?
In May 2020, customers started experiencing issues with the Brown Paper Tickets website. The site went down on May 6 and came back up on May 11 minus key functionality. Customers could no longer purchase tickets or register for events.
Shortly after, a notice was posted on the site stating that Brown Paper Tickets could no longer process refunds or transfers. The notice claimed that the COVID-19 pandemic had resulted in the company entering state-mandated receivership. It stated that the company assets were frozen and advised customers to contact their credit card company for refunds.
This led to an avalanche of confusion, complaints, and bad press. Event organizers could not access their accounts or outstanding ticket balances. Ticket holders were unable to get refunds for canceled events. The Washinton State Attorney General’s office received hundreds of complaints.
It became clear that Brown Paper Tickets was shutting down permanently, although no formal announcement was made. Their social media pages went inactive. Phone numbers were disconnected. Emails bounced back. By all indications, the company had gone out of business.
Why Did Brown Paper Tickets Shut Down?
While no official statement was made by Brown Paper Tickets management, several factors likely led to the company’s demise:
- Disruptions from COVID-19 – The mass cancellation of events and ban on large gatherings dealt a huge revenue blow.
- Cash flow issues – The refunds issued for canceled events likely depleted the company’s available cash.
- Mounting debt – Brown Paper Tickets was carrying several million in debt according to state records.
- Lawsuits and legal issues – The company was facing lawsuits from venues and customers over unpaid balances.
- Poor management – Questionable inner workings and lack of transparency around finances.
Essentially, Brown Paper Tickets did not have the financial resources or contingency plans to withstand the effects of COVID-19. Their flawed business model and years of mismanagement caught up all at once leading to insolvency.
What Happened to Customer Balances and Ticket Refunds?
The abrupt shutdown left thousands of customers in the lurch. Many had significant balances tied up with Brown Paper Tickets or were owed ticket refunds for canceled events.
Initially, Brown Paper Tickets instructed customers to request chargebacks from their credit card company for refunds. However, many later found this process to be unsuccessful as the company had ceased communications with the banks as well.
In March 2021, a Washington district court approved a receiver to take over the company’s remaining assets and financial records. The receiver aims to determine if any ticket holder funds remain and can be returned to customers. This process is expected to take months to years to complete.
Here is the current situation for customers (As of October 2022):
- Pending ticket refunds – Likely will not be paid out unless funds remain after bankruptcy settlements.
- Unredeemed ticket balances – Also unlikely to be recovered at this point.
- Chargebacks – Credit card chargeback window has mostly expired. Some banks may still honor claims on a case-by-case basis.
Unfortunately, most Brown Paper Tickets customers have been left empty-handed due to inadequate contingency planning and lack of financial protections in the company’s business model. Many event organizers and ticket holders lost thousands of dollars worth of ticket sales proceeds and purchases.
Could Brown Paper Tickets Have Avoided Failure?
It’s unlikely that Brown Paper Tickets could have completely avoided the COVID-19 fallout. However, several measures could have potentially mitigated the damage and saved the company:
- Maintaining a rainy day fund with cash reserves.
- Seeking COVID-specific government small business assistance.
- Transitioning to more online events and fundraising campaigns.
- Providing customer refund assurances and guarantees.
- Filing for bankruptcy protection earlier to restructure finances.
- Better financial transparency and planning.
Additionally, measures like event cancellation insurance, underwritten refund guarantees, and bonded ticketing could have eased the refund burden.
However, years of apparent financial mismanagement meant Brown Paper Tickets entered the pandemic in a precarious position without reserves or contingencies. This left them vulnerable to collapse under the weight of mass event cancellations.
Key Takeaways
The demise of Brown Paper Tickets serves as a case study for event companies on the importance of:
- Maintaining adequate cash reserves and credit lines.
- Having contingency plans for massive business disruptions.
- Ensuring customer ticket payments are protected and refundable.
- Exercising full financial transparency.
- Seeking legal bankruptcy protection at early signs of insolvency.
Companies should have at least 6 to 12 months of operating runway in cash reserves, credit, or business disruption insurance. Customer ticket payments should be protected via escrow accounts or underwritten refund guarantees.
Brown Paper Tickets Alternatives
Former Brown Paper Tickets customers now need to use other registration and ticketing platforms. Here are some popular alternatives:
Company | Details |
---|---|
Eventbrite | Leading self-service event platform. Charges 2.5% + 99 cents per ticket. Robust organizer tools. |
Tickettailor | Affordable platform tailored for smaller events. Charges 1.9% + 20 cents per ticket. |
ShowClix | Full-service white label ticketing. Higher fees but more capabilities. Used by larger organizers. |
TicketSpice | Lean platform focused on live events. Charges 2.9% + 99 cents per ticket. |
These platforms offer the event management tools of Brown Paper Tickets along with more modern feature sets. Most importantly, they have better contingency planning for refunds in case of event cancellations.
Key Features to Evaluate
When choosing an alternative ticketing platform, look for:
- Reasonable fee structure
- Ability to process refunds
- Robust organizer dashboard
- Flexible ticket types and discounts
- Payment processing integration
- Marketing and promotional tools
- Responsive customer support
Assess a company’s financial stability, management team, and business planning as well. Avoid providers at high risk of insolvency.
The Future of Brown Paper Tickets
While Brown Paper Tickets appears defunct, there remains a slight possibility of the brand being resurrected.
Technology entrepreneur and investor Mark Cuban acquired the Brown Paper Tickets trademark and internet assets in September 2020 according to trademark filings. Cuban has indicated plans to revive the brand name as a ticketing competitor.
However, Cuban is not affiliated with the original Brown Paper Tickets company and management. Any future use of the brand would essentially be a new ticketing startup unrelated to existing customer balances and refunds.
For now, Brown Paper Tickets remains out of business as far as ticketing operations. Existing customers are unlikely to recover lost ticket funds. The Brown Paper Tickets brand may reemerge under new ownership but will need to rebuilt trust and validity in the market.
Conclusion
Brown Paper Tickets provided a useful niche ticketing solution but could not withstand the shock of COVID-19 shutdowns combined with years of financial issues. The company has ceased operations leaving customers empty-handed in terms of ticket refunds.
While the brand may return under new leadership, the original Brown Paper Tickets company looks to be defunct. This serves as a warning for event planners and ticketing firms to implement financial safeguards and contingency planning. Carefully vet any future ticketing providers before entrusting them with event registrations and customer payments.