article in local paper the other day:
Some fan clubs just push followers away
By JAKE COYLE
Associated Press
Posted: Nov. 25, 2004
New York - Many artists hire outside companies to run their fan clubs, but one club designed to bring fans closer to their idols ended up dividing them.
Last June, 13-year-old Sophia Lief was all set to go to her first concert to see her absolute favorite: Christina Aguilera.
Sophia's mother, Janet Crane, wanted to be assured of getting good tickets. So she joined Aguilera's official fan club, paying the $35 membership fee that offered access to seats in the first 20 rows. She bought three tickets, totaling another $375.
In late April, however, Aguilera canceled her entire 28-city tour due to "strained vocal cords." Naturally, Sophia's mother looked for a refund - except there was none, for her or hundreds of other Aguilera fans.
Aguilera had hired a company called FansRule to run her Web site and fan club. But as it was taking money for Aguilera tickets, FansRule was being run by a court-appointed bankruptcy trustee after filing for Chapter 11.
FansRule still owes about $320,000 to Aguilera fans, trustee Joe Baldiga says.
"The inability to refund payments made for tickets," Baldiga said on Aguilera's Web site, "is in no way the fault of Christina Aguilera."
Sophia doesn't agree. "Her fans aren't going to follow her through the years if she treats us like this and doesn't even make up the (canceled) concerts," she said. (Her mother recently obtained reimbursement from her credit card company, six months after the fact.)
FansRule also ran clubs for Aerosmith. After the band postponed three concerts in June, many ticket buyers went without refunds.
It has become regular practice for music acts to outsource their fan clubs to companies that run their Web sites, sell high-priced VIP concert tickets and offer an assortment of perks for paying members. But how did the fans of international stars like Aguilera and Aerosmith end up left out in the cold?
"Fan clubs had been a neglected or stepchild of the business," said Coran Capshaw, now the CEO of Musictoday, one of the largest fan service businesses.
For example, one of Musictoday's acts, The Rolling Stones, offer two types of memberships. For $65, a fan gets a one-year membership, full access to the member-only online fan club, e-mail updates and a Stones DVD. However, $100 also buys a commemorative poster and special access to tour tickets.
Brian Sikorski, CEO of Ticketrends.com, said FansRule was an innovator in the highest growth area of the music business. Mike Lundgren, former chief operating officer of FansRule, says the company went bankrupt only because of "external financial reasons."
Baldiga, while running the company under bankruptcy law guidelines, used all incoming money to pay FansRule's bills. He says the company was going "gangbusters" until the Aguilera tour cancellation.
After the non-tour, a proposition for over $1 million in financing was turned down in bankruptcy court and Baldiga closed down FansRule for good. Hundreds of fans remain unpaid and their chances for reimbursement from FansRule look bleak.
Aguilera has hired attorney Larry Green to help retrieve as much money as possible for her fans. He hopes the matter can be settled within a year.
