The Senate Judiciary Committee held a listening to this week titled, “That’s the Ticket: Promoting Competition and Protecting Consumers in Live Entertainment,” which centered on the state of Live Nation Entertainment and the shortage of competitors within the main and secondary ticketing markets.
“I just want to dispel this notion that this is not a monopoly and then we can go from there about solutions,” Sen. Amy Klobuchar, D-Minn., stated on the listening to, which was held Tuesday.
Live Nation Entertainment consists of Live Nation, an occasions promoter and venue operator, and Ticketmaster, a ticket gross sales large. The two corporations merged in 2010 and now management an estimated 70% of the ticketing and reside occasion venues market.
It’s no secret that Taylor Swift followers have been outraged in November 2022 when thousands and thousands flocked to Ticketmaster.com to seize tickets to see the heartbreak queen for the primary time since 2018 and the web site crashed. The lengthy wait traces and frozen screens sparked an uproar with followers, blaming Ticketmaster for ruining their probabilities to see the pop star.
“As the leading player, we have an obligation to do better,” stated Joe Berchtold, Live Nation Entertainment president and chief monetary officer, on the listening to Tuesday.
This will not be the primary time shoppers have known as for the breakup of Ticketmaster and Live Nation. It’s additionally not the primary time the Department of Justice has been reportedly wanting into alleged misconduct by the corporate.
When the Live Nation and Ticketmaster merger was accredited in 2010, it was underneath the situation of a consent decree. Among different issues, the aim of that settlement was to forbid Live Nation from retaliating in opposition to a venue for utilizing a ticketer apart from Ticketmaster. After an investigation, in 2019 the DOJ made its most vital enforcement motion of an antitrust decree in 20 years when it alleged Live Nation Entertainment violated that decree. The firm settled with the federal government.
“The Department of Justice alleged six issues in 2019 which led to our decision with them to extend the consent decree. We did not feel it made sense to be seen as defending the theories of retaliation or threats. It’s not our business practice. It goes against our fundamental focus on alignment with the artists. The idea that we would ever put our interests ahead of theirs. So we are comfortable extending the consent decree,” stated Berchtold throughout Tuesday’s listening to. “It is absolutely our policy to not pressure, threaten or retaliate against venues by using content as part of the ticketing discussion,” he added.
In November 2022, The New York Times reported the DOJ is as soon as once more investigating the corporate.
While Live Nation Entertainment arguably has a monopoly on the business, a monopoly in itself will not be unlawful within the United States. A monopoly happens when an organization holds unique possession or management of an business.
“If we made monopolies illegal on the basis of pricing above cost and generating monopoly profits for a firm, the concern would be that that would potentially stifle risk-taking and entrepreneurial activity,” stated Diana Moss, president of the American Antitrust Institute.
Abuse of a monopoly place is one other matter. It’s unlawful for a business to determine or keep a monopoly via improper conduct and never enable for others to enter the market.
Clyde Lawrence, a singer-songwriter within the New York City-based band Lawrence, testified throughout Tuesday’s listening to. The band recurrently interacts with Live Nation Entertainment. It’s typically their promoter, venue operator and ticketer.
“In a world where the promoter and the venue are not affiliated with each other, we can trust that the promoter will look to get the best deal from the venue; however, in this case the promoter and the venue are part of the same corporate entity so the line items are essentially Live Nation negotiating to pay itself,” Lawrence stated.
The band informed CNBC in the event that they wish to play a sure measurement venue in a selected metropolis, they’re generally left no alternative apart from to make use of Live Nation due to the shortage of competitors in some areas. Then in the event that they want to use one other ticketer apart from Ticketmaster, they are saying that’s not an possibility.
“Ticketmaster has created these exclusive contracts, once you sign that contract, a band is not allowed to come in and say, ‘we want to sell our tickets with X, Y, Z platform,'” stated Jordan Cohen, one of many band’s eight members.
They also have a track with the lyric, “Live Nation is a monopoly.” “Due to Live Nation’s control across the industry, we have practically no leverage in negotiating,” Lawrence stated.
While the corporate does have some competitors, consultants say no different agency at present stands an opportunity.
“There’s really no one that’s been able to get the type of scale that Live Nation has. The closest comparable is Anschutz Entertainment Group with their own kind of internal ticketing platform. But they made a statement that speaks to the market power of Ticketmaster, which is that they used Ticketmaster to ticket Taylor Swift,” stated Barton Crockett, managing director and senior fairness analyst at Rosenblatt Securities.
It’s a business that lots of people have checked out. They’ve spoken about eager to get into it, and nobody’s actually been in a position to seize sufficient market share to actually be a significant participant,” he added.
Live Nation declined CNBC’s request for an interview or remark however in a press release on its web site stated that it’s in opposition to firm coverage to threaten venues if they don’t use Ticketmaster and that it doesn’t retaliate for a misplaced ticketing deal.
It’s unclear what’s subsequent for Live Nation Entertainment.
Watch this video to study extra about how the corporate bought to the place it’s at this time and what the long run would possibly maintain.