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Senate questions Live Nation president amid Taylor Swift ticket debacle businessroundups.org

by Ana Lopez
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“May I respectfully suggest that Ticketmaster should look in the mirror and say, ‘I’m the problem, it’s me,'” Sen. Richard Blumenthal (D-CT) said Tuesday on the Senate floor, referring to Taylor Swift’s latest hit song. “Anti hero.” At a hearing on consumer protection and competition in live entertainment, Senators Live Nation CFO and President Joe Berchtold blasted concerns that the company, which bought Ticketmaster in 2010, could become a monopoly.

In November, the “verified fanThe pre-sale for Swift’s highly anticipated Eras tour went horribly wrong. In an unprecedented move, Ticketmaster halted sales due to overwhelming demand, stating that the site was experiencing 3.5 billion system requests, or more than four times its previous peak, due to bot attacks. A month later, Mexican regulators fined Ticketmaster when thousands of fans were turned away from a Bad Bunny concert despite having tickets purchased on Ticketmaster (regulators said the company had oversold tickets, but Ticketmaster said that these were fake tickets).

After years of paying hidden fees and losing tickets to scalpers, fans and regulators have had enough. Senator Amy Klobuchar (D-MN) made another of many Swift references, saying music and sports fans now understand the risks of corporate consolidation”only too good.” And as Federal Trade Commission Chairman Lina Khan said at the time of the Swift ticket fiasco, the incident “turned more Gen Zers into anti-monopolists overnight than I ever could have.”

When the government investigated the merger of Ticketmaster and Live Nation more than a dozen years ago, the Justice Department reported that the combined company would control 80% of large concert halls. When questioned under oath on Tuesday, Berchtold said he believes the company controls about 50 to 60% of that market, due to the emergence of secondary resale markets on sites like SeatGeek; the founder and CEO Jack Grotzinger also testified at the hearing. Still, Ticketmaster sells tickets to 80 of the top 100 arenas in the country, while Live Nation sometimes acts as the promoter, owner and operator of that same venue.

The arrangement sucks for fans, who might watch their favorite artist sell out an arena show in seconds, only for thousands of bot-bought tickets to be immediately reposted for double the price. But it also harms the musicians themselves.

Testifying before the Senate, independent musician Clyde Lawrence said, “In a world where the promoter and the venue are not connected, 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 business entity, so the line items are essentially Live Nation negotiating to pay for themselves. Lawrence added that artists are not discounted on ticket costs, coat checks, parking passes or bar tabs, while Live Nation derives 20% of their revenue from merchandise sales. If he plays a show where tickets cost $42 including fees, Lawrence said his band would get $12. After spending half of that on tour costs, the band receives $6 per ticket in profits, which is split between all of its members, before taxes.

The Justice Department had approved this merger in 2010 under the condition of a consent decree, which was intended to prevent Live Nation and Ticketmaster from acting too much like a monopoly. But in 2019, law enforcement officials claimed the company violated the agreement, as Live Nation had been pressuring venues to sign contracts with Ticketmaster. As a result, the decree – which was due to expire that year – was extended to remain in force until 2025, including some amendments.

Now, in light of the Swift snafu, the Live Nation chapter is re-examining.

“If the Justice Department finds evidence of monopolistic and predatory abuse, there should be structural solutions, such as breaking up the company,” Blumenthal said at Tuesday’s hearing. “We’ll see what the Justice Department thinks.”

Some senators suggested possible solutions to the problem.

The Better Online Ticket Sales Act (appropriately named, the BOTS Act), passed in 2016 under the Obama administration, gives the FTC license to crack down on bot-powered ticketing companies. Senator Blumenthal and Senator Marsha Blackburn (R-TN) argued that, in a similar vein, the FTC should pressure Live Nation to fix the bot issue.

“There should be people you can get good advice from, because our critical infrastructure in this country – be it utilities, electric water, power, banking services, credit card processors, payment processors, health care companies – you know what, they get every day bot attacks, by the thousands and thousands, and they know, but you don’t,” Senator Blackburn said.

The BOTS law has only been applied once since 2016, when the FTC charged three ticket brokers with more than $31 million in fines in 2021.

“We have limited power over something that has not been consistently enforced,” Berchtold testified.

Senator Blumenthal replied, “You have unlimited power to go to court.”

Senator John Kennedy (R-LA) proposed that Live Nation make tickets non-transferable to prevent bot resale. The witnesses paused, and Kennedy said sarcastically, “Don’t all jump in at once.” The proposal can complicate simple conveniences like buying two tickets and sending one to a friend, or selling a ticket if you get sick before a show; moreover, it could boost the sale of fraudulent tickets. Groetzinger, who operates a major resale site, said he would not support such a policy; Berchtold said he would.

The committee’s path to holding Live Nation accountable is unclear, but the Justice Department’s investigation into Live Nation is ongoing.

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