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Author Topic: Ticket audits by distributor? Connor Kirkwood Film Handler Posts: 25 From: Portland, OR, USA Registered: Jul 2009 posted 03-11-2010 04:30 AM                     I currently manage an independent art-house theater that operates under the umbrella of a non-profit. Since being hired a year and a half ago, I've been advised by the non-profit's directors to save all of our ticket stubs for at least two months before tossing them. At first, I didn't question this, as I used to work for a larger theater chain that did frequent in-house ticket audits. I recently was told that our theater does not conduct in-house audits and that we saved our stubs in case of an audit by our distributor. Has anyone ever heard of this? Having been in the business for over ten years, I find it difficult to believe that our distributor has nothing better to do than surprise us with a ticket audit. I also work the booth for a second-run theater, and when I brought this subject up with the owner, he was just as incredulous as I was. Any thoughts? Can I make a case for throwing away our ticket stubs on a more regular basis?  |  IP: Logged Julio Roberto Jedi Master Film Handler Posts: 938 From: Madrid, Madrid, Spain Registered: Oct 2008 posted 03-11-2010 04:54 AM                    Ticket auditing by distributors are common around here (in regular commercial theaters) in spite of the fact that only goverment-approved ticketing software, often tied up to specific hardware, is the only approved method to sell tickets. There is a manual roll of serialized pre-printed tickets issued by the goverment in case the computer systems fails beyond the ability to sell tickets. The system must include permanent internet connection and the software companies must recover all sales data every night from all theaters using their software and send it to both, the goverment (ministry of arts and education) and the distributors. Kind of a waste to do "surprise audits" if you ask me, but hey, they also hire "security guards" for the "digital prints" during screenings etc, so who knows what those in charge are thinking, besides the obvious that most/all in the exhibition industry are thieves, of course. And that they don't mind wasting money.  |  IP: Logged Martin McCaffery Film God Posts: 2481 From: Montgomery, AL Registered: Jun 99 posted 03-11-2010 09:03 AM                        Conner, I too run a non-profit arthouse. Just check your master contracts with the distribs. Most require you keep all ticket stubs for 3 to 5 years. That said, in the 27 years we've been operating, we've never been audited by the studios. We're pretty small and probably not worth the effort.  |  IP: Logged Jim Cassedy Phenomenal Film Handler Posts: 1661 From: San Francisco, CA Registered: Dec 2006 posted 03-11-2010 10:13 AM                     It's been many years since we've had anyone come & do a "back audit" of our ticket stubs. But it's not all that uncommon here to have some sort of inspector show up during a performance, go to the back of the theater, do a head count and then ask for a print-out of the number of tickets sold for that show, to see if it matches the headcount. I'd say this happens about 3 times a year.  |  IP: Logged Scott D. Neff Theatre Dork Posts: 919 From: San Francisco, CA Registered: Oct 1999 posted 03-12-2010 12:22 PM                        It's probably part of the contract that's been there since the 40's when it mattered and nobody wants to go through the trouble of revising their boilerplate. Also - what do ticket audits prove nowadays? With computers you aren't even using the ticket serial numbers to report your sales so it's not like you'd have to refer back to your stubs to verify you didn't make a typo or transpose the series numbers from the punch-n-folds. Also with advanced, online and even remote ticketing it's possible for me to buy a ticket and never show up for the movie. "Oh no Exhibitor, you reported $500 worth of sales but only have tickets for $490, here's a $10 credit." ???  |  IP: Logged Sean McKinnon Phenomenal Film Handler Posts: 1712 From: Peabody Massachusetts Registered: Sep 2000 posted 03-12-2010 02:25 PM                        Some POS systems will use a seperate "class" of tickets for different uses such as print at home tickets could be reported as a seperate ticket class. This way if you has tickets bought in the theatre with cash or cc as a seperate class you could use ticket stubs to see if you have collected most of the other halfs. If you havent collected them then I would wonder why? Is the box officing re-selling the other half of the ticket?  |  IP: Logged Connor Kirkwood Film Handler Posts: 25 From: Portland, OR, USA Registered: Jul 2009 posted 03-14-2010 06:46 AM                     I feel a bit humbled for whining about the storage of two months worth of stubs, now that I know some folks have to deal with three to five years worth. I get the idea of an immediate ticket audit, matching tickets sold that day with an on-the-spot head count (for exactly the reason that Sean mentioned). But I still can't fathom the logic of a back audit, particularly when established ticketing software is in use, since the only purpose it seem to serve would be to prove that you were reporting grosses accurately. Even still, I'm glad I inquired here before opening my big mouth to the board of directors.  |  IP: Logged Frank Angel Film God Posts: 5305 From: Brooklyn NY USA Registered: Dec 1999 posted 03-14-2010 08:19 AM                        My theatre is a non-profit operation as well, housed within a larger Performing Arts Center. As has been stated, all the distribs master contracts state that stubs must be saved anywhere from 2 to 5 years, whether or not it makes sense in the age of computers. But forget about needing to save stubs for them -- it's your OWN auditing that requires a non-profit to keep detailed and meticulous records of all financial transactions -- invoices, purchase orders, sales slips, etc., and ticket stubs. That's standard non-profit auditing protocol. It varies from state to state, but we keep ours for 5 years. In fact, independent operations have a lot more leeway than a non-profit; an independent only has to satisfy itself that there is no hanky panky going on. Non-profits have to convince higher authorities. In most states non-profits need to be audited by accredited 3rd party auditors who will require all stubs be marked, bagged and saved. At the end of the year we set up a table and an ethernet connection for our auditor who plops himself down for a week or more checking our books. Saving all that stuff may seem a little silly, but it is protecting yourself. It's insurance. To scoff at it means you are betting you will never have a problem, and that's not wise. If you are a non-profit and come up wanting in any of the strict regulations imposed, you can loose your non-profit status, or worse yet, you can get carted off to jail. Connor, as for distribs sending "checkers," with us, that has only happened a few times very early on. After all, we are running films long pass the break and many classic titles which means we are playing films that anyone can rent on DVD for a dollar. Our overages, if we hit them, our miniscule. Warner and Fox sent checkers years ago, and I think a few times we got checked by Disney (figures). I believe they just wanted to confirm our operation in the beginning and satisfy themselves that we weren't ripping them off. We haven't been checked in the last 15 years. I don't know how much it costs a distrib to hire one of those checkers, but quite frankly, if a studio sent a checker to us, many times I bet it would cost them more than what they would make on our engagement! BUT, in theory, the distrib has the right to send checkers any time them want and to be able to inspect the box office records without advance notice -- that's in the Master Contracts as well. And BTW, they have to buy a ticket.  |  IP: Logged Mark Hajducki Jedi Master Film Handler Posts: 500 From: Edinburgh, UK Registered: May 2003 posted 03-14-2010 12:16 PM                     At least one of the major UK cinema chains uses tickets which do not have stubs, so there is therefore nothing to collect/audit. From the perspective of the distributor the use of headcounts is more useful as this is more likely to pick up discrepancies in the accounting system. Counting ticket stubs (and comparing the scan record) is still useful for ensuring that ushering staff are being vigilant.  |  IP: Logged Mike Blakesley Film God Posts: 12767 From: Forsyth, Montana Registered: Jun 99 posted 03-15-2010 12:32 PM                        We have been checked by Disney a couple of times in the past few years but it's always been an open check, meaning the checker comes in with a letter introducing himself. We give the checker a copy of the computer printout showing our ticket sales for the day. The checker does a headcount too, but they've never stayed for more than one show so I'm not sure how that figures into the results of the check. (IOW our submitted boxoffice report would show more tickets sold than the headcount would.)  |  IP: Logged Christopher Crouch Expert Film Handler Posts: 128 From: Holywood, ca, usa Registered: May 2006 posted 03-16-2010 05:46 AM                  In the twenty plus years I've been working at theatres, I've only seen one full out distributor audit of ticketing. This was at a small independent that had developed a reputation for questionable business practices. Looking back, I think the effort was more to send a message of "we're keeping an eye on you", than true anticipation of finding something concrete.  |  IP: Logged Frank Angel Film God Posts: 5305 From: Brooklyn NY USA Registered: Dec 1999 posted 03-16-2010 09:57 AM                        The Warner checker was open as well, although she mentioned it casually, she did make it a point to tell me she was under no obligation to tell me that she was there. In those days we used the old consec numbered ticket rolls and she just checked the last number on each roll, the starting number on the BO sheet and then went into the theatre to do her clicky-click thing. When she came back I approached her and offered her a cup of coffee which she refused -- said she was not allowed to accept anything. I asked if that was a Disney regulation....even she got it. We chatted a bit. She did say that the head count, as she put it, needed to be "close," not number perfect. Evidently the distribs take in to account human click error. And in our case, just like most of the single screen theatres of days gone by, we don't oust everyone at the end of each show (2400 seats -- what's the point), so we could have a few additional bodies that won't be accounted for number-wise; if someone wants to stay to see the show again, we hope they do and that they are really hungry and thirsty. We've never enforced a "Get your butt out of here and come back in with a new ticket" policy like they are forced to do in smaller multiplexes. I take it back; there were a few exceptions -- titles that packed the house. Yes, belieive it or not, BV (before video) we did actually have that happen. We came close quite a few times, but two where they actually had to stop selling tickets -- LADIES AND GENTLEMEN THE ROLLING STONES, and, you are not going to believe this, but FELLINI'S SATYRICON, which we played day-and-date with its premiere at the Paris Theatre in Manhattan due to a clerical error....they made a REALLY big mistake; they didn't MEAN for us to get it and since we only played it for two days, by the time they figured it out, we were done! GOOD TIMES!  |  IP: Logged Connor Kirkwood Film Handler Posts: 25 From: Portland, OR, USA Registered: Jul 2009 posted 03-19-2010 05:31 PM                     Well, now I'm considering lobbying our board to keep our stubs longer. I'm happy to make space for them, as long as they serve a purpose. The second-run theater that I work for issues receipt tape as proof of ticket purchase. No stubs, no record of the sale except on the register tape. Since they go through the same distribution channels as the nonprofit theater, I assumed that the same standard applied. Frank, we had an internal audit of our nonprofit status several months ago. The auditor never inquired about ticket stubs, though I'm told he was painstakingly thorough with our books. I don't even think he actually visited the theater, since our offices are in a separate location and keep opposite business hours (which is why I remain in the dark about certain aspects of nonprofit operations).  |  IP: Logged

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