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 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 go from there about solutions,” Sen. Amy Klobuchar, D-Minn. said at the hearing held on Tuesday.
Live Nation Entertainment Live Nation, an event promoter and venue operator, and Ticketmaster, a ticket sales giant. The two companies merged in 2010 and now control an estimated 70% of the ticketing and live event venue market.
It’s No Secret That Taylor Swift Fans Were Outraged November 2022 when millions come ticketmaster.com Grab tickets to see Heartbreak Queen for the first time since 2018 and the website crashes. Long waiting lines and frozen screens sparked an uproar with fans blaming Ticketmaster for ruining their chances to see the pop star.
“As the leading player, we have an obligation to do better,” Joe Berchtold, president and chief financial officer of Live Nation Entertainment, said during Tuesday’s hearing.
This isn’t the first time consumers have demanded the separation of Ticketmaster and Live Nation. This isn’t the first time the Justice Department is reportedly investigating alleged misconduct by the company.
When the Live Nation and Ticketmaster merger was approved in 2010, it was subject to a consent decree. Among other things, the purpose of that settlement was to forbid Live Nation from retaliating against a venue for using ticketers other than Ticketmaster. After an investigation, DOJ in 2019 took its most significant enforcement action of an antitrust decree in 20 years when Live Nation Entertainment allegedly violated that decree. the company settled with the government.
“The Department of Justice alleged six issues in 2019 that led to our decision with them to extend the consent decree. We do not think this can be viewed as defending the principles of retaliation or threats. It is our is not a commercial practice. This goes. against our fundamental focus on alignment with artistes. The idea that we will ever put our interests ahead of theirs. Therefore we are comfortable extending the consent decree,” during Tuesday’s hearing Berchtold said. “It is absolutely our policy not to coerce, threaten or retaliate against venues using content as part of a ticketing discussion,” he added.
In November 2022, the new York Times Reported DOJ is once again investigating the company.
While Live Nation Entertainment arguably has a monopoly on the industry, a monopoly per se is not illegal in the United States. A monopoly occurs when a company holds exclusive rights or control of an industry.
Diana Moss, president of the American Antitrust Institute, said, “If we made a monopoly illegal on the basis of pricing above cost and generating a monopoly profit for a firm, the concern would be that it would potentially discourage risk-taking and entrepreneurship.” Will stop the activity of.”
Abuse of monopoly position is another matter. It is illegal for a business to establish or maintain a monopoly through unfair practices and not allow others to enter the market.
Clyde Lawrence, a singer-songwriter in the New York City-based band lawrencetestified during Tuesday’s hearing. The band regularly interacts with Live Nation Entertainment. This is often their promoter, venue operator and ticket provider.
“In a world where the promoter and the venue are not affiliated with each other, we can trust that the promoter will try to get the best deal from the venue; however, in this case the promoter and the venue are part of the same corporate entity. So the line items are essentially what Live Nation is negotiating to pay themselves,” Lawrence said.
The band told CNBC that if they wanted to play a venue of a certain size in a particular city, they sometimes had no choice but to use Live Nation due to the lack of competition in certain areas. Then if they want to use a ticketer other than Ticketmaster, they say that’s not an option.
“Ticketmaster has made these special contracts so, once you sign that contract, a band isn’t allowed to come in and say, ‘We want to sell our tickets with X, Y, Z platforms, said Jordan Cohen, one of the band’s Eight members.
he also has a song With the lyrics, “Live Nation is a monopoly.” “Because of Live Nation’s control of the entire industry, we have practically no negotiating leverage,” Lawrence said.
While the company has some competition, experts say no other firm currently stands a chance.
“There’s really no one else that’s been able to achieve the type of scale that Live Nation has. The closest comparable is Anschutz Entertainment Group with its own internal ticketing platform. But he made a statement that Ticketmaster’s market power talks about, which is that they used Ticketmaster to get tickets to Taylor Swift,” said Barton Crockett, managing director and senior equity analyst at Rosenblatt Securities.
This is a business that many people have seen. They’ve talked about wanting to be involved, and really no one has been able to gain enough market share to be a really meaningful player.”
Live Nation declined CNBC’s request for an interview or comment but Ina said in a statement on its website that it is against company policy to threaten venues if they do not use Ticketmaster. And it doesn’t compensate for the lost ticket deal.
What’s next for Live Nation Entertainment is unclear.
Watch this video to learn more about where the company is today and what the future may hold.