(PRNewsfoto/Live Nation Entertainment)
Live Nation /Ticketmaster have come under fire in recent years for what many concertgoers and bands decry as price fixing and artificially inflating ticket pricing, and scalping/reselling. The brand has been under investigation by the US Government after a major public outrage by fans after ticket fiascos such as Taylor Swift, Bruce Springsteen, Paul McCartney, and recently Blink-182. The United States Department of Justice and several states have officially filed a lawsuit against Live Nation Inc, citing alleged antitrust violations at least in part due to the market dominance of the company’s Ticketmaster unit.
“We allege that Live Nation relies on unlawful, anticompetitive conduct to exercise its monopolistic control over the live events industry in the United States at the cost of fans, artists, smaller promoters, and venue operators,” U.S. Attorney General Merrick Garland said in a statement. “The result is that fans pay more in fees, artists have fewer opportunities to play concerts, smaller promoters get squeezed out, and venues have fewer real choices for ticketing services. It is time to break up Live Nation-Ticketmaster.”
As reported by the AP, CNN and the New York Times:
The lawsuit, filed in federal court in Manhattan, was brought with 30 state and district attorneys general and seeks to break up the monopoly they say is squeezing out smaller promoters, hurting artists and drowning fans with endless fees.
“It’s time for fans and artists to stop paying the price for Live Nation’s monopoly,” Attorney General Merrick Garland said Thursday. “It is time to restore competition and innovation in the entertainment industry. It is time to break up Live Nation, Ticketmaster. The American people are ready for it.”
The Justice Department accused Live Nation of a slew of tactics — including threats and retaliation — that Garland said has allowed the entertainment giant to “suffocate the competition” by keeping a stronghold on virtually every aspect of the industry, from concert promotion to ticketing. The impact on consumers is seen in an “endless list of fees on fans,” the attorney general said.
The Justice Department said Live Nation’s anti-competitive practices include using long-term contracts to keep venues from choosing rival ticketers, blocking venues from using multiple ticket sellers and threatening venues that they could lose money and fans if they don’t choose Ticketmaster. The Justice Department says Live Nation also threatened to retaliate against one firm if it didn’t stop a subsidiary from competing for artist promotion contracts.
The lawsuit is the latest example of the Biden administration’s aggressive antitrust enforcement approach targeting companies accused of engaging in illegal monopolies that box out competitors and drive up prices. In March, the Justice Department filed a lawsuit against Apple alleging that the tech giant has monopoly power in the smartphone market. The Democratic administration has also taken on Google, Amazon and other tech giants.
Ticketmaster, which merged with Live Nation in 2010, is the world’s largest ticket seller. During its annual report last month, the company said that Ticketmaster distributed more than 620 million tickets through its systems in 2023.
Around 70% of tickets for major concert venues in the U.S. are sold through Ticketmaster, according to data in a federal lawsuit filed by consumers in 2022. The company owns or controls more than 265 of North America’s concert venues and dozens of top amphitheaters, according to the Justice Department.
The ticket seller sparked outrage in November 2022 when its site crashed during a presale event for a Taylor Swift stadium tour. The company said its site was overwhelmed by both fans and attacks from bots, which were posing as consumers to scoop up tickets and sell them on secondary sites. The debacle prompted congressional hearings and bills in state legislatures aimed at better protecting consumers.
The Justice Department allowed Live Nation and Ticketmaster to merge as long as Live Nation agreed not to retaliate against concert venues for using other ticket companies for 10 years. In 2019, the department investigated and found that Live Nation had “repeatedly” violated that agreement and extended the prohibition on retaliating against concert venues to 2025.
Ticketmaster has also had disputes with its industry competitors. In 2015 StubHub sued Ticketmaster and the Golden State Warriors, alleging it unfairly required fans looking to resell tickets to use Ticketmaster’s resale exchange. StubHub alleged in the lawsuit that the organizations prevented fans from deciding how they want to resell tickets and artificially drove up ticket prices.
Now Live Nation has responded with their own lengthy statement and it ends on a real gem. After trying to place the blame on everyone but themselves, Live Nation executive vice president Dan Wall quite literally says the “world is a better place because of that merger, not a worse one.” Given just about every comment on all the articles regarding the lawsuit, I’d wager that a lot of folks absolutely do not feel that way.
Wall’s statement reads: “The Department of Justice and a group of State Attorneys General have now filed the much-anticipated antitrust suit against Live Nation and Ticketmaster. This follows intense political pressure on DOJ to file a lawsuit, and a long-term lobbying campaign from rivals and ticket brokers seeking government protection for themselves.
“The complaint — and even more so the press conference announcing it — attempt to portray Live Nation and Ticketmaster as the cause of fan frustration with the live entertainment industry. It blames concert promoters and ticketing companies — neither of which control ticket prices — for high ticket prices. It ignores everything that is actually responsible for higher ticket prices, from increasing production costs to artist popularity, to 24/7 online ticket scalping that reveals the public’s willingness to pay far more than primary tickets cost. It blames Live Nation and Ticketmaster for high service charges, but ignores that Ticketmaster retains only a modest portion of those fees. In fact, primary ticketing is one of the least expensive digital distributions in the economy.
“It is also absurd to claim that Live Nation and Ticketmaster are wielding monopoly power. The defining feature of a monopolist is monopoly profits derived from monopoly pricing. Live Nation in no way fits the profile. Service charges on Ticketmaster are no higher than elsewhere, and frequently lower. And even accounting for sponsorship, an advertising business that helps keep ticket prices down, the company’s overall net profit margin is at the low end of profitable S&P 500 companies.
“The trendlines confirm Live Nation’s lack of market power. Every year, competition in the industry drives Live Nation to earn lower take rates from both concert promotion and ticketing. The company is profitable and growing because it helps grow the industry, not because it has market power.
“It was evident in our discussions with the DOJ Front Office that they just did not want to believe the numbers. The data conflicted too much with their preconception that Live Nation belongs in the ranks of the other ‘tech monopolists’ they have targeted.
“It is also clear that we are another casualty of this Administration’s decision to turn over antitrust enforcement to a populist urge that simply rejects how antitrust law works. Some call this ‘Anti-Monopoly’, but in reality it is just anti-business. A central tenet of these populists is that antitrust should target companies that have grown large enough that in some nebulous way they ‘dominate’ markets — even if they attained their size through success in the marketplace, not practices that harm consumers, which is the focus of antitrust laws. ‘Dominant platform companies’, this thinking goes, should just not be allowed to vertically integrate in most circumstances, including for distinctly non-antitrust reasons such as alleged ‘conflicts of interest.
“There is no legal basis for objecting to vertical integration on these grounds. Antitrust law views vertical integration as procompetitive in most circumstances. As the leading antitrust treatise states, ‘vertical integration is ubiquitous and … [in] the great majority of cases no anticompetitive consequences can be attached to it.’ And, critically, Live Nation can offer and has offered fans, artists, venues and the rest of the performance ecosystem better prices and better services than they would receive if these complementary businesses were separated. Ticketmaster in particular is a far better, more artist- and fan-focused business under Live Nation’s ownership than it ever was as a standalone company. But that’s not how this DOJ sees it. They are reflexively antagonistic to vertical integration.
“The Obama Administration saw it differently. It allowed Live Nation and Ticketmaster to merge, and in defending that position acknowledged that there was no legal basis for challenging the vertical aspects of the merger — specifically, allowing a large concert promoter to combine with a large ticketing company. In one filing, it said that it had ‘determined that it could not prove that the vertical integration resulting from the merger would significantly harm competition in the concert promotion market.’ There is no factual basis for concluding otherwise today. The world is a better place because of that merger, not a worse one.”
If this lawsuit is successful, if would send shockwaves through the music induistry, the concert industry, down to booking agents, bands and fans. Live Nation has been the past recipient of ire specifically from metalheads after proof of collusion with bands to create a resale market with major bands, such as Metallica (Editor’s Note: basically every huge touring band has a rep that manages their Live Nation relationship), causing a major embarrassment for the band. In their rebuttal to the current case (but before the filing) being made against them (one of which is that they hold an unfair monopoly on the entire concert industry) they claim they are not unfair and entrants into the field for ticket sales have caused them to defend their brand. They have tried several campaigns to offset this lawsuit from coming down, including their support of the “Fair Ticketing Act,” launching the option for “all-in pricing,” and the On The Road program with Willie Nelson to help venues and stop the practice of merch cuts.
https://www.cnn.com/2024/05/22/business/live-nation-ticketmaster-doj-antitrust/index.html
Live Nation’s previous plan to prevent their disbandment!
Live Nation Entertainment Announces Support For A FAIR Ticketing Act
LIVE NATION ENTERTAINMENT ANNOUNCES SUPPORT FOR A FAIR TICKETING ACT
Fans & Artists Insisting on Reforms in Ticketing:
Fans mean everything to artists, and the best way to ensure a fair ticketing experience for live music fans is to put more control in the hands of the artists themselves.
ARTISTS SHOULD DECIDE RESALE RULES.
Protect artists’ ability to use face-value exchanges and limited transfer to keep pricing lower for fans, and prevent scalpers from exploiting fans.
MAKE IT ILLEGAL TO SELL SPECULATIVE TICKETS.
Scalpers use deceptive tactics to trick fans into spending more or buying tickets the seller doesn’t even have – this confuses fans and should be banned.
EXPAND THE BOTS ACT.
Policymakers should expand the scope of the BOTS Act and increase enforcement to deter those who break the law, cheating artists and fans in the process.
CRACK DOWN ON RESALE SITES THAT ARE SAFE HAVENS FOR SCALPERS.
Resale sites that turn a blind eye to illegally acquired tickets, allow ticket speculation, and ignore artists’ rules need real consequences from policymakers to curb their bad behavior.
MANDATE ALL-IN PRICING NATIONALLY.
Avoid surprises at check out and give fans the ability to easily compare prices as they shop by mandating all-in pricing that shows the full out of pocket cost of the ticket and fees right upfront.
We already follow many of these common sense policies and are ready to make additional changes, but we can’t do it alone. We need the entire industry and policymakers to stand up for fans and artists.
Advocating for FAIR Ticketing policies has never been more important because artists are actively losing their ability to control their tickets in states all over the country – which is hurting fans, and helping scalpers.
6 states already passed legislation protecting resale:
– Illinois
– Colorado
– Connecticut
– New York
– Virginia
– Utah
5 more states are considering new laws to protect resale:
– California
– Florida
– Georgia
– Maryland
– Washington
Why it matters?
Scalper lobbyists use terms like “fan freedom” to sound like they are looking out for consumers – but unlimited resale protects scalpers more than fans. Programs like fan-to-fan face value exchanges are designed specifically to ensure fans still have maximum flexibility when buying tickets, but tickets stay at prices artists set. Runaway resale laws make programs like this illegal.
How to Fix it?
To truly protect consumers, Congress should make a federal law that backstops artist’s ability to control their tickets. Together, we can create a FAIR system that benefits everyone.
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