The Judiciary Committee, responding to the bungled sale of Taylor Swift concert tickets, heard the company apologize and its critics trace the problem to the industry’s lack of competition.
Live Nation Entertainment, the concert industry giant that owns Ticketmaster, came under withering attack during a Senate Judiciary hearing on Tuesday, with committee members from both parties criticizing it for the botched sale of tickets to Taylor Swift’s latest tour and calling the company a monopoly that hinders competition and harms consumers.
Over nearly three hours, senators pilloried a top Live Nation executive, Joe Berchtold, over the handling of Ms. Swift’s tickets last November and over longstanding allegations that the company badgers its competitors to win new business. Such bullying would be a violation of a Justice Department agreement that set conditions on the merger of Live Nation and Ticketmaster in 2010.
“This is all the definition of monopoly,” said Senator Amy Klobuchar, Democrat of Minnesota. “Live Nation is so powerful that it doesn’t even need to exert pressure. It doesn’t need to threaten. Because people just fall in line.”
Some at the hearing went so far as to question whether the two companies, whose agreement with the Justice Department expires in 2025, should be broken up.
Mr. Berchtold, Live Nation’s president and chief financial officer, acknowledged the problems with a presale for Ms. Swift’s tour, and apologized to the singer and her fans. When those tickets went on sale, millions of people were turned away. Technical problems also caused tickets to disappear from the online baskets of customers — whom Ticketmaster had approved through its Verified Fan system — as they were trying to buy them.
Mr. Berchtold largely attributed Ticketmaster’s failings to an assault from online bots: automated programs, run by scalpers, that seek to snatch up tickets before they ever make their way to consumers. That drew a largely skeptical response from the senators.
“This is unbelievable,” Senator Marsha Blackburn, Republican of Tennessee, said, with more than a hint of anger in her voice. “Why is it,” she added, “that you have not developed an algorithm to sort out what is a bot and what is a consumer?”
Senator John Kennedy, Republican of Louisiana, was even more blunt. “The way your company handled the ticket sales with Ms. Swift,” he said, “was a debacle.”
The merger of Live Nation and Ticketmaster united the world’s most powerful concert promoter and the biggest ticketing platform, creating a colossus without equal in the multibillion-dollar live music business.
In 2019, the last full year unaffected by the Covid-19 pandemic for which Live Nation has reported data, the company put on more than 40,000 events around the world and sold 485 million tickets. It owns or otherwise controls more than 300 venues around the world, far more than any other player in the business.
In part because of its bulk and global reach, Live Nation has long been the target of complaints from competitors, who contend that the company’s size, and its control of Ticketmaster, give it an unfair advantage.
Jerry Mickelson, a longtime independent concert promoter in Chicago, told the senators that a common frustration among the market’s smaller players is that Live Nation can profit from concerts put on by rival promoters because it still makes money through its control of Ticketmaster. “Pepsi doesn’t earn money from Coke,” he said. “But our competitor, Live Nation, makes money from selling tickets to our concerts.”
Objections to Live Nation’s business have grown louder since 2019, when the Justice Department said that the company had “repeatedly violated” the terms of its regulatory agreement, called a consent decree.
Justice Department investigators said that Live Nation had threatened venues that it would withhold tours under the company’s control if those venues did not sign deals with Ticketmaster, in violation of a key provision in the decree. Live Nation did not admit any wrongdoing, but in early 2020 the Justice Department extended the decree by five years.
Senator Richard Blumenthal, Democrat of Connecticut, was among those at the hearing who raised the question of whether Live Nation’s merger with Ticketmaster should be undone.
“If the Department of Justice establishes violations of the consent decree,” he said, “then unwinding the merger ought to be on the table.”
Mr. Berchtold pushed back against many of the accusations, saying that Live Nation does not threaten venues; that those venues hold a great deal of leverage in negotiating ticketing contracts; and that new entrants like SeatGeek, a rival ticketing platform, have kept Ticketmaster on its toes. According to various estimates cited by the senators, Ticketmaster controls the ticketing at 70 to 80 percent of major concert venues in the United States. Mr. Berchtold said Live Nation’s estimate is 50 to 60 percent and he attributed its market share to the quality of its product.
“We believe ticketing has never been more competitive,” he said.
At the hearing, called “That’s the Ticket: Promoting Competition and Protecting Consumers in Live Entertainment,” witnesses included other players in the concert business who described great difficulties competing against Live Nation.
Jack Groetzinger, the chief executive of SeatGeek, said that venues are afraid of losing Live Nation concert tours if they do not sign with Ticketmaster. He said that is an obstacle for smaller companies like his in winning new business — though SeatGeek has been one of the more successful upstarts in ticketing in recent years, signing major clients like the Dallas Cowboys and Jujamcyn Theaters, one of the major Broadway theater owners.
The panel also included a musician, Clyde Lawrence, of a small New York band called Lawrence. Dressed in a black suit, and with a scruffy head of hair, he joked that he could only dream of the crushing ticket demand enjoyed by Ms. Swift. But he described frustrations in dealing with Live Nation, such as the backstage costs it charges musicians, and the opacity of ticket surcharges, for which his band gets nothing.
He described a typical show, where the face value of the ticket was $30, plus $12 in fees. Yet out of that $42 paid by the consumer, $30 was eaten up by the venue, Live Nation and Ticketmaster, and another $6 went to the band’s touring expenses. “So that leaves us with $6 for an eight-piece band, pretax,” he said, “and we also have to pay our own health insurance.”
In his questioning, Senator Josh Hawley, Republican of Missouri, honed in on a facet of Ticketmaster’s business, the resale marketplace that exists seamlessly within its online ticket sales platform, “where you’re forcing everyone in the resale market to come into your ecosystem.”
“This is how monopolies work,” Mr. Hawley added. “You leverage market power in one market to get market power in another market — and it looks like you’re doing that in, frankly, multiple markets.”
Ms. Klobuchar, who called the hearing, said in a summation that some of the problems in ticketing, such as fighting bot traffic, could be dealt with through legislation. But she said that the larger question, of whether to take action against Live Nation as a monopoly, was best handled by the Justice Department. The near-unanimous criticism from lawmakers on Tuesday may put pressure on the Justice Department to act.
The most remarkable aspect of the hearing may have been the display of consensus by a panel often split along partisan lines. Mr. Blumenthal summed that up with a mocking salute to Mr. Berchtold.
“I want to congratulate and thank you for an absolutely stunning achievement,” he said. “You have brought together Republicans and Democrats in an absolutely unified cause.”
Source: Music - nytimes.com
