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Joe Berchtold, left, president and CFO of Live Nation Entertainment, and Jack Groetzinger, CEO of SeatGeek, are sworn in during a Senate Judiciary Committee hearing on Tuesday.
The very first hearing of the 118th Congress was a bipartisan condemnation of Live Nation, the parent company of Ticketmaster, as a vertically integrated monopoly that rips off fans, shortchanges artists, and intimidates promoters and venues.
Senate Judiciary Committee chair Richard Durbin (D-IL) kicked off the hearing by saying, “Ticketing and live entertainment markets lack competition and are dominated by a single entity.” And members in both parties almost unanimously agreed, highlighting Live Nation’s retaliation against venues that work with competitors, hoarding of customer data, and disinterest in investing to deal with bots and scalpers that raise prices for fans.
More than one senator said that it was time to unwind the disastrous 2010 merger between Live Nation and Ticketmaster. “Breaking up the company should be on the table,” said Sen. Richard Blumenthal (D-CT), who sits on the Antitrust Subcommittee.
The hearing comes at a dangerous time for Live Nation, which faces a Justice Department investigation into issues in the ticketing market that could lead to a monopolization case. The hearing offered significant evidence that Congress favors such an outcome.
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Live Nation president and chief financial officer Joe Berchtold testified as a witness, in a sign of how seriously the company is taking the situation. But his tendency to blame everyone else for problems in the ticketing industry, from venues to artists to scalpers, only deepened the senators’ frustrations. “Mr. Berchtold, I want to congratulate and thank you for an absolutely stunning achievement, you have brought together Republicans and Democrats in an absolutely unified cause,” Blumenthal said. “And may I suggest … unfortunately your approach today in this hearing is going to solidify that cooperation.”
Though the hearing was called in part because of the recent debacle with Ticketmaster’s fan presale for Taylor Swift’s summer tour, senators to their credit did not focus on that exclusively, painting a broader picture of a deeply concentrated industry where Live Nation is often the ticketing agent, promoter, and venue owner/operator (or at least tied to the venue through long-term exclusive contracts that can last as much as ten years).
Sen. Amy Klobuchar (D-MN) dubbed this arrangement the “triangle of a monopoly,” rolling up each line of business in the live performance market and squeezing customers as well as artists. “Let’s dispel the notion that this isn’t a monopoly and then we can go from there to discuss solutions,” Klobuchar said.
The monopoly triangle has led to a lack of innovation for dealing with scalpers, and ancillary fees that average 27 percent of the face value of a ticket (and in some cases reach as high as 82 percent, according to one witness). Berchtold’s testimony was at its most exasperating when he claimed that venues, not Ticketmaster, set the rate for ancillary fees. Bands are routinely told that Ticketmaster sets those fees.
The Live Nation monopoly also squeezes other parts of the live event ecosystem. “Pepsi doesn’t earn money from Coke, but our competitor Live Nation earns money from selling tickets to our concerts,” said one witness, concert promoter Jerry Mickelson. Another witness, singer-songwriter Clyde Lawrence from the band Lawrence, repeated many of the claims he made in a recent New York Times op-ed, including a breakdown of how, on a $30 face-value ticket that with ancillary fees costs around $42, his band, the primary attraction for fans, earns about $6 after expenses. “If they want to charge us $250 for a stack of clean towels, they can and have,” Lawrence said.
More than one senator said that it was time to unwind the disastrous 2010 merger between Live Nation and Ticketmaster.
While Lawrence is a modestly successful band that’s been around for about a decade, it does not (by Clyde’s own admission) sell out stadiums. Superstar acts have for the most part been unwilling to speak out about Ticketmaster and Live Nation’s dominance. Many have Live Nation as their promoter. And for the rest, with monopolies throughout the music industry limiting artist revenue primarily to live event touring, they feel like they cannot challenge the key to their livelihoods as performers. The memories of Pearl Jam’s ill-fated challenge to Ticketmaster in the 1990s, which ended quietly, remain fresh.
Similarly, Sen. Klobuchar, chair of the Judiciary Committee’s Antitrust Subcommittee, said that many venue owners declined to speak at the hearing, afraid of backlash from Live Nation. One of the witnesses, SeatGeek CEO Jack Groetzinger, testified that venue owners are reluctant to sign up with his competing ticketing service, because they worry that Live Nation will take artists out of their clubs and arenas. He cited the Barclays Center in Brooklyn, which SeatGeek had signed as a client, losing concert dates and subsequently backing out of the contract to return to Live Nation.
Republican senators did not hold back from attacking Ticketmaster. Sen. Marsha Blackburn (R-TN), who represents music-heavy cities like Nashville and Memphis, excoriated Berchtold for failing to police bot attacks and blaming others for the Swift failure. “So you were underestimating the popularity of a Taylor Swift concert?” she said incredulously at one point.
Blackburn explained that nearly every major business, from power companies to banks, deals with hackers on a rolling basis, questioning why Live Nation couldn’t figure it out. When Berchtold responded that bots engage in an “ever-going arms race” and the company needed better legislation to supplement the BOTS Act, which attempts to crack down on bots, Blackburn asked him if they had ever called the Federal Trade Commission, which oversees enforcement, to file a complaint. Berchtold replied with one example in 2019. Blumenthal added that the BOTS Act includes a private right of action but Live Nation has never sued a scalper.
Citing speculative ticket sales where scalpers put tickets up for purchase that haven’t even been released to the public yet, Blackburn said “the market is so brazen because they figured out Live Nation won’t call the FTC” and won’t invest in better IT. Berchtold said in his opening statement that Live Nation had invested $1 billion in its ticketing service, but under questioning from Blackburn admitted that the figure was over a decade.
Another preoccupation was the use of customer data. Sen. Josh Hawley (R-MO) asked about Ticketmaster’s “SafeTix” program, a fraud prevention tool that eliminates paper tickets in favor of a digital barcode. (It hasn’t fully stopped fraud, as resellers have sold PDFs with a screengrab of the barcode.) This program forces users buying tickets on the secondary market to sign up for Ticketmaster’s app to receive the ticket, allowing Ticketmaster and its partners to harvest personal data and target those customers with ads.
Ticketmaster’s own website says that venues can use the data to talk to customers after an event ends. Berchtold claimed Ticketmaster doesn’t use customer data, even after Hawley read him back the quote from the website.
“This sounds like a data-industrial complex,” Hawley stated. “You leverage market power in one market to get market power in another one, that sounds like what monopolies do.”
More than expected, the hearing put emphasis on Ticketmaster’s hold over sports stadiums as much as music venue concerts. Mickelson testified that Ticketmaster holds 87 percent of ticketing contracts at NBA/NHL arenas, and 93 percent at NFL stadiums. (These sites are also used for music events.) Berchtold tried to dispute this data by claiming that SeatGeek had made inroads into sports arenas. But SeatGeek’s own CEO agreed with Mickelson’s numbers.
In a statement for the Break Up Ticketmaster Coalition, Sports Fans Coalition executive director Brian Hess said that for years the coalition “has fought Ticketmaster at the state and federal levels over their abuse of market power and how they restrict fan access to games.”
Berchtold offered one concession: an all-in requirement to offer transparency up front on the total price of a ticket. But these disclosure requirements have failed in other markets to prevent price-gouging. Kathleen Bradish of the American Antitrust Institute was more direct that this was a market power issue that cannot be solved through transparency alone.
Bradish’s testimony focused on clarifying the Sherman and Clayton Acts to counteract the narrowing of the law through the courts, which led to Ticketmaster’s dominance. She cited specific enforcement actions the Justice Department could take even now to break up Live Nation’s venue and promotion arms from the ticketing service.
Though not mentioned directly, the Federal Trade Commission has recently asserted its Section 5 power to set rules that span across the economy to prohibit unfair methods of competition. Anti-monopoly groups have urged the commission to ban exclusive dealing arrangements that harm competition. As highlighted during the hearing, Ticketmaster’s restrictive contracts with music venues are a prime example of these types of anti-competitive deals that the FTC could target.
“Ultimately, the senators were well versed on ticketing issues and willing to get into the weeds on the need for transparency, all of which is promising in my mind,” said Krista Brown, a senior policy analyst at the American Economic Liberties Project.
