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Ticketmaster Plans to Blame Scalpers for Taylor Swift Debacle at Senate Hearing

todayJanuary 23, 2023

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Don’t expect Live Nation’s Joe Berchtold to be quoting Taylor Swift’s “Anti-Hero” during Tuesday’s Senate Judiciary Committee hearing on ticketing. Unlike the pop star’s “I’m the problem it’s me” chorus-turned-meme, the company’s president and CFO plans to take aim at who he says are the real culprits behind Swift’s disastrous Nov. 15 presale: scalpers.

While the Live Nation-owned Ticketmaster was villainized for weeks following the presale for Swift’s upcoming The Eras Tour that both broke single-day sales records and threw fans into a fury over service issues, according to a prepared opening statement reviewed by Billboard, Berchtold plans to lay much of the blame on scalpers who used illegal bots to attack the online sale. The statement — to be delivered Tuesday (Jan. 24) in Washington, D.C., to the committee led by ranking member Dick Durbin (D-Ilinois) — details Ticketmaster’s ongoing “arms race” against scalpers who are illegally using autonomous software to disrupt and attack high profile ticket sales. Country music legend Garth Brooks is lending his support to Berchtold’s testimony as well, with a letter defending Ticketmaster and attacking ticket scalpers who use illegal methods to buy up tickets.

“We knew bots would attack [Swift’s] onsale, and planned accordingly,” reads Berchtold’s planned statement. “We were then hit with three times the amount of bot traffic than we had ever experienced, and for the first time in 400 Verified Fan onsales they came after our Verified Fan access code servers. While the bots failed to penetrate our systems or acquire any tickets, the attack required us to slow down and even pause our sales. This is what led to a terrible consumer experience that we deeply regret.”

Following the Nov. 15 presale, Ticketmaster eventually canceled its general onsale for the remaining 170,000 tickets to Swift’s tour. In December, the company announced a new strategy to sell the passes over the course of four weeks and recently concluded that effort. At the time, the company said “historically unprecedented demand” caused the failure, but blamed bots then, too — saying that 14 million fans and more than 3 billion bots hit the site. That excuse did little to satisfy the more than 100,000 fans who were kicked out of line during the bot attack, and even Swift spoke out blaming the company. With many fans calling for Ticketmaster’s punishment, Berchtold also plans to apologize directly to Swift and her followers.

“As we said after the onsale, and I reiterate today, we apologize to the many disappointed fans as well as to Ms. Swift,” his statement reads.

While Berchtold notes Ticketmaster “accepts its responsibility to be the first line of defense against bots in this ever-escalating arms race,” he intends to shift the hearing’s focus to policy changes that could tamp down on scalpers.

“In this forum where we are here to discuss public policy, we also need to recognize how industrial scalpers breaking the law using bots and cyberattacks to try to unfairly gain tickets contributes to an awful consumer experience,” his statement reads. “We are doing everything we can to fight the people who attack our onsales and steal tickets meant for real fans, but we need help passing real reforms to stop this arms race.”

Brooks, in his statement, supports this notion.

“The crush of bots during an on-sale is a huge reason for program failure NO MATTER WHO THE TICKET SELLING COMPANY is,” writes the country icon in his letter addressed to Congress. “And the one who ALWAYS pays for this atrocity is the customer, the LAST one on whom that burden should fall.”

Brooks notes in his letter that he forced Dallas Cowboys owner Jerry Jones to allow him to use Ticketmaster to sell tickets to his April concert at AT&T Stadium instead of SeatGeek, which held the exclusive contract to ticket the stadium.

“I had grown to love and trust the people at Ticketmaster so much,” he explained in his letter, noting, “this was not because of Ticketmaster, but a choice I made.”

Berchtold will be joined on the witness stand by SeatGeek chief executive Jack Groetzinger and longtime Chicago promoter Jerry Mickelson with JAM Productions, along with recording artist Clyde Lawrence and representatives from the James Madison Institute and American Antitrust Institute.

Ticketmaster officials are expecting a pile on, both from Congress and the other testifying witnesses. SeatGeek has filed a number of complaints against Ticketmaster with the Department of Justice for alleged anti-trust violations, and Mickelson condemned the merger between Live Nation and Ticketmaster when he testified before Congress in 2010. While company officials aren’t expecting any standing ovations, Berchtold’s testimony will be an important preview of the company’s framing of the challenges facing the business over the next couple of years and promises to be the most detailed defense of Live Nation by an executive in its 18-year history.

Sen. Amy Klobuchar (D-Minnesota) originally called for this hearing in response to public anger over the technical failures of the Taylor Swift Eras ticket sale. But the witness list and the name of the hearing, “That’s the Ticket: Promoting Competition and Protecting Consumers in Live Entertainment,” released Monday, suggest that the hearing is more likely to focus on long-simmering dissatisfaction over the 2010 consent decree governing the merger of Ticketmaster and Live Nation. That consent decree has had mixed success in creating a level playing field for competition in the ticketing business, and critics consider it a failure because it didn’t prevent Ticketmaster from becoming the dominant ticketing company it is today.

“We hear people say that ticketing markets are less competitive today than they were at the time of the Live Nation-Ticketmaster merger. That is simply not true,” read Berchtold’s statements, claiming Ticketmaster’s market share has decreased since the DOJ estimated it held 80% of the market in 2009.

At the time, Ticketmaster “did not face the level of competition we face today from new competitors including SeatGeek, AEG’s AXS, and Eventbrite, along with established competitors including and Paciolan,” Berchtold continues. “Today, there is intense competition for every ticketing contract that goes out to bid — far more than there was in 2010. Ticketmaster has lost, not gained, market share, and every year competitive bidding results in ticketing companies getting less of the economic value in a ticketing contract while venues and teams get more. The bottom line is that U.S. ticketing markets have never been more competitive than they are today, and we read about new potential entrants all the time.”

Berchtold plans to present the threat posed by bad actors and malicious software as an issue both the government and the private sector must address together. The strategy shifts part of the criticism for the Taylor Swift ticket debacle onto the Senate — which unanimously voted to pass the BOTS act in 2016, effectively outlawing automated ticket-buying technology. Since its passage, the law has only been enforced twice by the FBI and the Federal Trade Commission, despite pleas from Ticketmaster officials that bot attacks on high-profile ticket sales are increasing in frequency and complexity, sources tell Billboard. Berchtold also plans to detail how the company has spent more than $1 billion developing technology to prevent bot attacks on the company’s ticket sales using software like Verified Fan and digital ticketing.

A “blame the bots” strategy is not likely to satisfy the members of the Senate Judiciary Committee, which includes such conservative and liberal firebrands such as Ted Cruz (R-Texas), Josh Hawley (R-Missouri), John Kennedy (R-Louisiana), Diane Feinstein (D-California), Corey Booker (D-New Jersey) and Richard Blumenthal (D-New Jersey). Anti-Ticketmaster sentiment and criticism of the 2010 merger between Ticketmaster and Live Nation is one of the few issues of bipartisan agreement on Capitol Hill.

Berchtold will end his testimony laying out calls to action he believes Congress can take to combat bad actors in the ticketing industry. First is empowering private parties like Ticketmaster to bring civil actions against ticket sellers who knowingly sell tickets obtained by bots. Second, Berchtold believes Congress should act to outlaw deceptive sales practices like speculative ticket sales, “offering for sale tickets you don’t own or have an existing right to obtain,” or deceptive sites that mislabel themselves as “the official” ticket seller for shows they aren’t contracted to work with.

The Senate Judiciary Committee’s “That’s the Ticket: Promoting Competition and Protecting Consumers in Live Entertainment” begins at 10 a.m. EST on Tuesday. Click here to watch the hearing live.

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todayJanuary 23, 2023

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