Live Nation and Ticketmaster’s live entertainment monopoly

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 on the primary and secondary ticket markets.

“I just want to dispel this notion that this isn’t a monopoly, and then we can find solutions from there,” Sen. Amy Klobuchar, D-Minn., said at the hearing, which was held on Tuesday.

Live Nation Entertainment consists of Live Nation, a promoter and venue operator, and Ticketmaster, a ticketing giant. The two companies merged in 2010 and now control an estimated 70% of the ticketing and live events market.

It’s no secret that in November 2022, Taylor Swift fans were outraged when millions flocked to her to snag tickets to see Heartbreak Queen for the first time since 2018 and the website crashed. The long lines and frozen screens sparked an uproar among fans, blaming Ticketmaster for ruining their chances of seeing the pop star.

“As a leader, 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 Ticketmaster and Live Nation to be disbanded. It’s also not the first time the Justice Department has investigated alleged wrongdoing by the company.

When the Live Nation/Ticketmaster merger was approved in 2010, it was conditional on a consent decree. The purpose of this agreement was, among other things, to prohibit Live Nation from retaliating against a venue for using a ticketing provider other than Ticketmaster. after an investigation, in 2019 the DOJ conducted its most significant enforcement action against an antitrust decree in 20 years when it alleged that Live Nation Entertainment had violated that decree. The company reached an agreement with the government.

“The Department of Justice raised six issues in 2019 that led to our decision to extend the Consent Decree. We did not think it useful to be seen as defending the theories of retaliation or threats. It’s not our business practice. It goes against our fundamental focus on artist orientation. The idea that we would ever put our interests ahead of theirs. As such, we are happy to extend the consent decree,” Berchtold said during Tuesday’s hearing. “It is absolutely our policy not to pressure, threaten, or retaliate against venues by including content as part of the ticketing discussion use,” he added.

in November 2022, The New York Times reported that the 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 arises when a company holds exclusive possession or control an industry.

“If we were to make monopoly illegal on the basis of pricing above costs and making monopoly profits for a company, there would be concern that it would potentially 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 company to establish or maintain a monopoly through inappropriate behavior and to prevent others from entering the market.

Clyde Lawrence, a singer-songwriter in the New York band Laurentius, testified during the hearing on Tuesday. The band regularly interacts with Live Nation Entertainment. Often it is their promoter, event operator and ticket seller.

“In a world where the promoter and the venue are not linked, we can be confident that the promoter will try to get the best deal from the venue; however, in this case, the promoter and venue are part of the same entity, so the line items are essentially negotiating Live Nation to pay themselves,” Lawrence said.

The band told CNBC that when they want to play in a certain city at a venue of a certain size, sometimes they have no choice but to use Live Nation since there’s no competition in some regions. If they then want to use a different ticketer than Ticketmaster, they say that’s not an option.

“Ticketmaster created these exclusive contracts. Once you sign that deal, a band can’t come in and say, ‘We want to sell our tickets using the X,Y,Z platform,’” said Jordan Cohen, one of the band’s eight members.

They even have a song with the text “Live Nation is a monopoly”. “Because of Live Nation’s control of the industry, we have virtually no room for negotiation,” Lawrence said.

Though the company faces some competition, experts say no other firm currently stands a chance.

“There really is no one who has been able to reach the greatness of Live Nation. The closest comparison is Anschutz Entertainment Group, which has its own brand of internal ticketing platform. But they have issued a statement supporting Ticketmaster’s market power is that they used Ticketmaster to create tickets for Taylor Swift,” said Barton Crockett, managing director and senior equity analyst at Rosenblatt Securities.

It’s a deal that a lot of people have looked at. They’ve talked about getting in and nobody’s really been able to gain enough market share to really be a significant player,” he added.

Live Nation declined CNBC’s request for an interview or comment, but iA statement on its website said it’s against company policy to threaten venues if they don’t use Ticketmaster and that it doesn’t return the favor for a lost ticket sale.

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 may hold. Live Nation and Ticketmaster’s live entertainment monopoly

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