The Senate Judiciary Committee held a hearing this week titled “It’s a Ticket: Promoting Competition and Protecting Consumers in Live Entertainment,” which focused on the state of Live Nation Entertainment and the lack of competition in the primary and secondary ticketing markets.
“I just want to dispel the notion that this is not a monopoly and then we can move on to solutions,” Sen. Amy Klobuchar, of Minnesota, said at a hearing Tuesday.
Live entertainment of the nation consists of Live Nation, the promoter and operator of venues, and Ticketmaster, the ticketing giant. The two companies merged in 2010 and currently control about 70% of the ticketing and live venues market.
It’s no secret that Taylor Swift’s fans were outraged in November 2022 as millions flocked to her. Ticketmaster.com to get tickets to see the queen of broken hearts for the first time since 2018 and the website went down. Long queues and frozen screens caused an uproar from fans who blamed Ticketmaster for ruining their chance to see the pop star.
“As a leading player, we have an obligation to do better,” Joe Berchtold, president and chief financial officer of Live Nation Entertainment, said at Tuesday’s hearing.
This isn’t the first time consumers have called for the breakup of Ticketmaster and Live Nation. It is also reported that this is not the first time the Department of Justice has investigated the company’s alleged misconduct.
When the merger between Live Nation and Ticketmaster was approved in 2010, it was subject to a consent decree. Among other things, the purpose of this agreement was to prevent Live Nation from retaliating against the venue for using a ticketing agent other than Ticketmaster. After investigation, in 2019 Ministry of Justice took the most significant enforcement action of an antitrust order in 20 years when it claimed that Live Nation Entertainment violated the order. The company settled with the government.
“The DOJ raised six issues in 2019 that led to our joint decision with them to extend the consent decree. against our fundamental orientation towards cooperation with artists. The thought that we will ever put our own interests ahead of theirs. Therefore, it is convenient for us to extend the consent decree,” Berchtold said during a hearing on Tuesday. “Our policy is not to pressure, threaten or retaliate against venues using content as part of ticket discussions,” he added.
November 2022 New York Times reported that the Ministry of Justice is again investigating the company.
While Live Nation Entertainment may have a monopoly in the industry, the monopoly itself is not illegal in the United States. A monopoly occurs when a company owns exclusive possession or control industries.
“If we were to make monopolies illegal on the basis of pricing above cost and generating monopoly profits for the firm, the problem would be that it could stifle risk-taking and entrepreneurial activity,” said Diana Moss, president of the American Antitrust Institute.
Another thing is the abuse of a monopoly position. It is illegal for a business to establish or maintain a monopoly through inappropriate behavior and to prevent others from entering the market.
Clyde Lawrence, singer-songwriter of the New York band. Lawrence, testified during Tuesday’s hearing. The group interacts regularly with Live Nation Entertainment. Often this is their promoter, the operator of the establishment and the ticket seller.
“In a world where the promoter and the venue are not connected to each other, we can be sure that the promoter will look for the best offer from the venue; however, in this case, the promoter and the venue are part of the same corporation. organization, so the positions are essentially Live Nation negotiating to pay itself,” Lawrence said.
The band told CNBC that if they want to play a certain size venue in a certain city, they sometimes have no choice but to use Live Nation due to the lack of competition in some regions. Then, if they want to use another ticket seller other than Ticketmaster, they will say that is not an option.
“Ticketmaster created these exclusive contracts, and after you sign this contract, the band can’t come in and say, ‘We want to sell our tickets on the X, Y, Z platform,’” said Jordan Cohen, one of the group’s representatives. eight members.
They even have a song with the lyrics “The living nation is a monopoly”. “Because Live Nation controls the entire industry, we have little to no leverage in negotiations,” Lawrence said.
While the company has some competition, experts say no other firm currently stands a chance.
“There really isn’t anyone who can get the scale that Live Nation has. The closest equivalent is Anschutz Entertainment Group with its own internal ticketing platform. But they made a statement that speaks to Ticketmaster’s market power, which is that they used Ticketmaster to sell tickets to Taylor Swift,” said Barton Crockett, managing director and senior equity analyst at Rosenblatt Securities.
This is a business that many people have looked at. They talked about wanting to get into it, and no one really managed to capture enough market share to really become a significant player, ”he added.
Live Nation declined CNBC’s request for an interview or comment, but IA statement on the website says that it is company policy not to threaten venues unless they use Ticketmaster. and that he’s not avenging a lost ticket deal.
It’s unclear what’s next for Live Nation Entertainment.
Watch this video to learn more about how the company got to where it is today and what the future might bring.