Senators criticize Live Nation and Ticketmaster for their dominance
Amy Edwards demonstrates against the live entertainment ticket industry outside the U.S. Capitol on January 24, 2023 in Washington, DC.
Drew Fury | Getty Images
The Senate Judiciary Committee slammed the mammoth giant nation lives Tuesday, a call for activists and artists to speak out about competition in the ticketing industry following a failed sale of Taylor Swift tickets in November.
Led by Sen. Amy Klobuchar, D-Minn., who leads antitrust investigations for the committee, the senators questioned Live Nation chief financial officer Joe Berchtold about the company’s dominance in the ticketing industry. Industry witnesses described near-monopoly control over venues, performers and consumers.
“Ticketmaster should look in the mirror and say, ‘I’m the problem, I’m the problem,'” said Sen. Richard Blumenthal, D-Conn., playing the lyrics to Swift’s songs.
Blumenthal said Republicans and Democrats agreed that something had to be done. But the parties seemed to differ on the way forward, with several Democrats appearing willing to enact new legislation to fix the issues, while R-Utah antitrust subcommittee member Mike Lee blamed what he perceived as lax enforcement of existing laws.
Live Nation owns Ticketmaster, the world’s largest ticket seller, accounting for approximately 70% of all tickets sold in the United States. He also owns music venues and promotes touring, which has led many naysayers to label his company as a monopoly in the industry.
Live Nation, which merged with Ticketmaster in 2010, has long been the subject of criticism for its size and power in the entertainment industry. Detractors escalated their complaints in November when tickets for Swift’s “Eras” tour went on sale, plagued by disruptions and slow queues.
Live Nation would open sales to 1.5 million verified fans ahead of general public ticket sales. However, over 14 million users have come to the site, including bots, which has caused huge slowdowns and crashes on the site. In the end, 2 million tickets were sold in advance sales and sales to the general public were canceled, company representatives said.
“To me, it’s an unbelievable statement that the leading ticketing company can’t deal with bots,” Jam Productions CEO Jerry Mickelson said at Tuesday’s hearing. You can’t blame the bots for what happened to Taylor Swift. There’s more to this story than meets the eye.’
Swift, who worked to bring all marketing in-house, publicly criticized the company at the time for mishandling the sales process, but did not name it.
The Justice Department has opened an antitrust investigation into Live Nation’s practices, but the investigation predates Swift’s ticketing fiasco.
Live Nation Entertainment President and CFO Joe Berchtold and SeatGeek CEO Jack Groetzinger listen to Jam Productions CEO and President Jerry Mickelson during a Senate Judiciary Committee hearing titled “That’s the Ticket: Fostering Competition and Protecting Consumers in Live Entertainment.” on Capitol Hill in Washington, United States, on January 24, 2023.
Kevin Lamarque| Reuters
Berchtold said on Tuesday that the company owns about 5% of US sites and said Ticketmaster has lost market share, not gained it, since its merger with Live Nation.
Clyde Lawrence, lead singer and songwriter of the band Lawrence, has denounced Live Nation’s control over various aspects of the company, saying the company is ultimately “acting to pay for itself”.
Lawrence told lawmakers that if his band is playing at a Live Nation venue, they must use the company as a promoter and sell tickets through Ticketmaster. This often comes with a higher initial cost and lower splits for the band than if it worked with an outside promoter, he said.
Lawrence also spoke of a lack of transparency in additional ticket costs, which he says average between 40% and 50% of the base ticket price. Berchtold said Tuesday that sites determine the reimbursement rate, but agreed his company could be more open about that information.
Berchtold also pointed out what he said was a growing problem with ticket scalping.
Tuesday’s hearing extends the bipartisan focus on senators’ antitrust actions in recent years.
Late last year, lawmakers succeeded in passing a bill that would raise merger filing fees for large transactions, increasing the resources for federal authorities to review such transactions. Klobuchar, who sponsored the bill, referred to the bill in his remarks Tuesday as a way to help such agencies challenge potentially anti-competitive agreements.
Yet Congress has so far failed to pass some of the most far-reaching legislation that would create new safeguards for competitive practices, especially in the tech space. Despite bipartisan support, it shows how difficult it can be to update or add to existing antitrust laws, which many lawmakers say are not adequately enforced by the courts as they are currently written.
The merger between LiveNation and Ticketmaster was approved by the DOJ under the Obama administration, with certain provisions that the newly merged company would abide by, under what is called a consent decree. This required LiveNation to adhere to certain requirements for a period of time, such as not retaliating against venues that used another ticketing company.
In 2020, LiveNation and the Department of Justice agreed to update and extend the consent decree through 2025, as the DOJ said the company had taken actions it deemed a violation of its prior agreement.
The current antitrust enforcement regime under the Biden administration has made it clear that it much favors structural solutions, or breaches, over behavioral solutions, such as decrees of consent.
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