The Senate Judiciary Committee held a hearing this week titled, “That’s the Ticket: Promoting Competition and Protecting Consumers in Live Entertainment,” which focused on Live Nation Entertainment and the lack of competition in the primary and secondary ticket markets.
“I just want to put an end to this idea that he is not independent and then we can go from there,” Sen. Amy Klobuchar, D-Minn., said at the hearing, which took place on Tuesday.
Live Nation Entertainment is produced by Live Nation, an event promoter and venue operator, and Ticketmaster, the ticketing giant. The two companies merged in 2010 and now control about 70% of the ticket and event market.
It’s no secret that Taylor Swift fans were outraged in November 2022 when millions flocked to Ticketmaster.com to get tickets to see the heartbroken queen for the first time since 2018 and the site crashed. Long waiting lines and cold screenings led to chaos with fans, with Ticketmaster accusing them of ruining their chance to see the superstar.
“As a major player, we have a responsibility to be successful,” said Joe Berchtold, Live Nation Entertainment’s president and chief financial officer, at the hearing on Tuesday.
This isn’t the first time consumers have called for the demise of Ticketmaster and Live Nation. This is not the first time that the Justice Department has begun looking into alleged wrongdoing by the company.
When Live Nation’s deal with Ticketmaster was approved in 2010, it was subject to statutory requirements. Among other things, the purpose of the agreement was to prevent Live Nation from reimbursing venues that used tickets other than Ticketmaster. After an investigation, in 2019 the DOJ imposed a 20-year statute of limitations on Live Nation Entertainment’s alleged violations of the statute. The company was settled by the government.
“The Department of Justice reported six cases in 2019 that led us to agree with them to extend the consent decree. We didn’t think it made sense for us to appear to be defending retaliation or threats. It’s not our business. The idea that we’re going to put our interests before theirs. So we’re open to extending the statute.” allowed,” Berchtold said during Tuesday’s session. “It is our policy not to coerce, threaten or retaliate against the venue using content as part of a discussion,” he said.
In November 2022, The New York Times reported that the DOJ was also investigating the company.
Although Live Nation Entertainment is the governing body of the industry, self-regulation is not allowed in the United States. Consolidation occurs when a company owns or controls a company.
“If we’re going to be making it illegal to charge more than it costs and make a profit for one company, the concern would be that this would discourage business ventures,” said Diana Moss, president of the American Antitrust Institute.
Abuse of the authority of the ruler is another matter. It is illegal for a business to establish or maintain its monopoly by unfair practices and preventing others from entering the market.
Clyde Lawrence, a singer-songwriter in Lawrence’s New York City band, testified Tuesday. The band is in regular contact with Live Nation Entertainment. They are usually their promoters, site designers and advertisers.
“In a world where promoters and venues don’t work together, we can count on the promoter to look to get the best money from the venue; however, at this point the promoter and the venue are one and the same. That’s what’s on the line with Live Nation negotiating that pay for it,” Lawrence said.
The band told CNBC that if they want to play a certain venue in a certain city, they are sometimes left with no choice but to use Live Nation due to a lack of competition in other areas. So if they want to use tickets other than Ticketmaster, they say that’s not an option.
“Ticketmaster created these special agreements, when you sign the agreement, a group is not allowed to come and say, ‘we want to sell our tickets on X, Y, Z platforms,'” said Jordan Cohen, one of the group. eight members.
They have a song with the words, “Live Nation is in control.” “Because of Live Nation’s control over the entire industry, we are not in a position to negotiate,” Lawrence said.
Although the company has competition, experts say that no other company has an advantage at this time.
“No one really can get the kind of scale that Live Nation has. The closest thing to Anschutz Entertainment Group is their internal ticketing brand. But they made a statement that spoke to the power of the Ticketmaster market, which is that they used Ticketmaster for Taylor’s ticket. Swift,” said Barton Crockett, managing director and equity analyst at Rosenblatt Securities.
It is a business that many people have looked at. They’ve talked about wanting to get in, and no one has been able to take enough market share to be a good player,” he added.
Live Nation declined CNBC’s request for questions or comment but said in a statement on its website that it is against company policy to threaten venues if they don’t use Ticketmaster and that it will not refund lost revenue.
It is unclear what will be 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 holds.