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Ticketmaster Hearing: Witnesses, Senators Push Break-Up of Live Nation at Probe on Taylor Swift Presale

todayJanuary 24, 2023 1

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The Senate Judiciary Committee on Tuesday opened its hearing on competition within the ticketing industry with witnesses calling for drastic action after Ticketmaster’s breakdown during last year’s Taylor Swift presale crash. 

Moments after Live Nation president Joe Berchtold shared lengthy remarks on the causes of the Swift debacle, SeatGeek CEO Jack Groetzinger, one of Ticketmaster’s main competitors told lawmakers, “Live Nation controls most popular entertainers, routes most of the tours, tickets most of the concerts and owns many of the venues,” noting “this power allows Live Nation to maintain its monopolistic influence over the primary ticketing market.”

The 2010 consent decree governing the merger of Live Nation and Ticketmaster “has not worked at all and violated the consent decree since its inception,” Groetzinger said. “The only effective remedy is a structural one – the dissolution of the common ownership of Ticketmaster and Live Nation.”

Jerry Mickelson, longtime promoter with Jam Concerts in Chicago who spoke out against the merger during Congressional hearings in 2010, called the deal “a vertical integration on steroids” and said its arena promotion business has decreased 90 percent since the merger.

Berchtold argued that the company’s marketshare of the concert market is close to 50 to 60 percent, not 80 percent as many have claimed. He also denied allegations that the company used its market size to punish competitors.

“It is absolutely our policy to not pressure, threaten or retaliate against venues by using content as part of the ticketing discussion,” said Berchtold.

Sen. Amy Klobuchar (D-Minn.) said ticket prices have gotten too expensive for many fans and that “to have a strong capitalist system, you have to have competition.”

Sen. Richard Blumenthal (D-Conn.) encouraged critics of the company and people who are fed up with the system that exists right now to “continue your criticism” as the Department of Justice takes a third look at Live Nation following a 2019 inquiry into the company.

“If the Department of Justice establishes violations of the consent decree, unwinding the merger ought to be on the table,” Blumenthal testified. “If the Department of Justice establishes facts that involved monopolistic and predatory abuses, there ought to be structural remedies that include breaking up the company.”

Before taking his turn asking questions to witnesses, outspoken Sen. John Kennedy (R-La.) told Berchtold: “I’m not against big, but I am against dumb and the way your company handled Ms. Swift’s tickets was a debacle. Whoever at your company was in charge of that should be fired.”

One of the most compelling parts of the hearing was the testimony of Clyde Lawrence from the NYC band Lawrence, who provided an artist’s perspective on how ticketing issues affect his eight-member group, which has nearly one million followers on Spotify and “hopes to one day be big enough to crash a ticketing website.”

“Live Nation-Ticketmaster often acts as three things at the same time — the promoter, the venue and the ticketing company,” he testified, saying that while Live Nation and the band should work together as partners, the vertical integration “seriously complicates these incentives.”

“We have practically no leverage when negotiating” things like show costs, he said, noting that the band has been charged $250 for a stack of towels at a Live Nation-owned venue.

“These line items are essentially Live Nation negotiating to pay itself,” he explained.

The hearing touched upon a number of controversial issues in the ticketing business, from speculative ticket listings, to the Federal Trade Commission’s ability to enforce anti-bot legislation and balancing the use of digital tickets to fight fraud with larger concerns about how the technology might create new anti-competition issues within the secondary market.

While Berchtold did his best to steer the conversation towards the problems caused by bad actors in the secondary market, it was difficult for his message to stick as senators fired off dozens of questions covering the intricacies of the ticketing business. 

When it came to the core issue of the hearing — whether or not the company was a monopoly — Berchtold insisted that his company held a 50-60 percent market share of the live music business, a number that was repeatedly challenged by the panel’s other witnesses, which included Sal Nuzzo with The James Madison Institute and Kathleen Bradish from the American Antitrust Institute. When asked point-blank by Sen. Ted Cruz (R-Texas) if they thought Ticketmaster was a monopoly, Nuzzo, Bradish, Groetzinger and Michelson all quickly answered “yes.”

Whether or not the members of the committee had the political appetite to sue Ticketmaster and force Live Nation to sell off its ticketing business remains an open question. Klobuchar indicated she was more than happy to see the government litigate the matter with Ticketmaster’s attorneys.

But several Republicans, while critical of Ticketmaster, probed the company about potential alternative paths to settling long standing criticism with the company. One suggestion, from the committee’s ranking member Sen. Mike Lee (R-Utah) was to force Ticketmaster to share its API with secondary ticketing companies like SeatGeek to facilitate transactions “without limiting customers to the Ticketmaster app.”

Berchtold disliked the idea, comparing it to “putting (their API) out into the wild to enable fraud.” Berchtold did however sign off on ideas like all-in ticket pricing and increased resources for the FTC to fight BOTS

Sen. Josh Hawley (R-Mo.) teed off on Ticketmaster toward the end of the hearing, accusing the company of being part of the “data industrial complex” for the way it operates its secondary ticket market, requiring fans who buy a secondary ticket on sites like SeatGeek to download the Ticketmaster app to complete their transaction.

“You’re using your monopoly on the front end to create a monopoly within the resale market where you’re forcing everyone in the resale market to come in to your ecosystem,” Hawley said, later adding “this is how monopolies work, you leverage market power in one market to get market power in another market and it it looks like you’re doing that, frankly, in multiple markets.”

“Very much agree,” Groetzinger piped in, “and it stifles competition completely.”

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