Watch Live: Senators question Live Nation leader over Taylor Swift ticketing fiasco
Ticketmaster is publicly defending itself for the first time since the concert promoter’s publicly publicized collapse late last year during ticket sales for Taylor Swift’s “Eras” tour.
Joe Berchtold, the president and chief financial officer of Live Nation, which owns Ticketmaster, argued before the Senate Judiciary Committee on Tuesday that the live concert industry is more competitive than it was a decade ago, when Live Nation merged with Ticketmaster, and that the ticket seller does not control capacity or prices.
“Primary ticketing companies, including Ticketmaster, do not set ticket prices, do not decide how many tickets go on sale and when they go on sale, do not set service fees,” he said in his opening remarks.
Berchtold’s assessment was in stark contrast to Sen. Amy Klobuchar, who said in her opening statement that Ticketmaster fit “a definition of monopoly.”
“Live Nation is so powerful that it doesn’t even have to push, it doesn’t have to threaten because people just line up,” the Minnesota Democrat said.
Three roles in one
Antimonopoly scholars and consumer advocates point to Ticketmaster’s role as a ticket seller, owner or operator of venues, and organizer of events. The company covers both the cost of an event and the promotion of it. Live Nation’s reach allows it to put pressure on performers and force them into subpar deals, researchers said.
“Major venues across the United States know that if they shift their primary ticketing business from Ticketmaster to a competitor, they risk losing the significant revenue they generate from Live Nation concerts. They know this because Live Nation has told them so, directly and indirectly – through public statements, private communications and subsequent retaliation against venues that have defied Ticketmaster,” said Jack Groetzinger, CEO of SeatGeek.
Berchtold claimed Live Nation only owns a small portion of the approximately 4,000 venues in the US — about 5%, he said. However, critics note that the events giant’s portfolio includes the largest and most profitable venues, while its Ticketmaster division has exclusive ticketing deals with an overwhelming majority of sports venues.
Last year, Ticketmaster booked 87% of Billboard’s Top 40 performances, and the company has exclusive ticketing deals with 87% of NBA and NHL arenas and 97% of NFL stadiums, said Jerry Mickelson, head of independent events producer Jam productions
“This merger is vertical integration on steroids. Using dominance in one market to reduce competition in another,” he said. Jam, which has produced nearly 1,500 live events in the 40 years since its inception, has only produced one since 2015, Mickelson said.
“Arena concerts used to be Jam’s most profitable business,” he said. But since the merger, “Live Nation has succeeded in ousting independent promoters from this sector.”
Musicians made $6 from $42 concert tickets
Independent music group Lawrence, whose recent song “False Alarms” includes the phrase “Live Nation is a monopoly,” provided an example of the power of Live Nation.
“Live Nation acts as three things at once: the promoter, the venue, the ticketing company,” Clyde Lawrence, a member of the band, told the committee. Because Live Nation owns the venue, provides the money for the show, and sells the tickets, they have outsized power when negotiating with artists, Lawrence said.
“If they want to take 10% of the revenue and call it a setup fee, they can and must. If they want to charge $30,000 for it [facility rent], they can and have. If they want to charge us $250 for a stack of clean towels, they can and have,” Lawrence said.
He illustrated the difference with an example of a show for which Lawrence set ticket prices at $30. After Ticketmaster charged a 40% fee, fans paid $42 per ticket. After set-up costs were paid, the band earned $12 per ticket — about half of which went to cover tour costs.
“That leaves us with $6 for an eight-piece band, before taxes, and we also have to pay for our own health insurance,” Lawrence said.
He added: “We really don’t see Live Nation as an enemy. They’re just the biggest player in a game that feels stacked against us as artists and often against our fans as well.”
Taylor Swift’s meltdown
The much-anticipated hearing came shortly after Ticketmaster canceled a sale for Taylor Swift’s concert tour in November when the service experienced technical glitches and what it called “historic” customer demand for seats. Swift had planned her “Eras” tour for 52 concerts at 18 venues, with Ticketmaster being the primary ticket seller for all but five of those shows. During a presale event on November 15 on Ticketmaster’s website crashed after 14 million fans and bots tried to buy tickets. Thousands of fans who thought they were eligible to purchase tickets were unable to purchase them, leading to some suing Ticketmaster.
Interested parties began queuing for the hearing well before 9 a.m., more than an hour before it began. As the doors opened, the line snaked down the hallway.
Sal Nuzzo, a witness for free-market think tank The James Madison Institute, commented that his daughters told him that this hearing would be “the most important thing” in his career, adding that he drove through crowds of protesters on the way to the hearing .
Taylor Swift fans are suing Ticketmaster 00:17
The episode has prompted calls for Ticketmaster to break up, with critics accusing the ticketing platform, promoter and venue owner of monopolizing the events market. Participants from the American Economic Liberties Institute, an anti-monopoly group, distributed flyers in the hearing room calling for the company’s dissolution.
Ticketmaster is estimated to have more than 70% market share of the US ticketing industry and is the primary ticketing provider for over 80% of professional sports teams and venues in the NBA, NHL and NFL. Live Nation denies these claims, saying its market share has shrunk since the 2010 merger.
“Ticketmaster has been losing market share, not gaining it, and each year competitive bids result in ticketing companies getting less of the economic value of a ticketing deal while venues and teams get more,” said Berchtold. “The US ticketing markets have never been more competitive and we keep reading about new potential entrants.”
The Senate also heard from ticketing platform SeatGeek and live event producer Jam Productions, as well as academics studying antitrust law.
Live Nation blames much of the blame on bots and scalpers who steal tickets to resell them at higher prices. At least some artists agree with this assessment. In a letter in support of Live Nation, country music star Garth Brooks called on the committee to make scalping illegal.
“The rush of bots during a ticket sale is a big reason for a program to fail, NO MATTER WHO THE TICKET SALES COMPANY is. And the one who ALWAYS pays for these atrocities is the customer, the LAST ONE to bear the burden.” Brooks wrote in a letter to the committee.
Live Nation claims to have invested millions in developing anti-bot technology on the platform.
The Justice Department is investigating Live Nation whether the company’s market power violates antitrust laws and affects competition, and the Tennessee Attorney’s Office is investigating the Swift incident and alleged subpar customer support during the snafu.