The U.S. Justice Department is going after Ticketmaster’s parent company for being a monopoly. But what are they hoping to achieve?
Pearl Jam has been waiting 30 years for this. The Seattle rockers were at the peak of their fame back in 1994 when they started their epic feud with Ticketmaster over the service charges and other fees the company was adding to the price of their concert tickets. Pearl Jam decided to cancel their tour when they failed to convince the U.S. Justice Department to break Ticketmaster’s grip on the live music industry.
So here we are in 2024, and the DOJ is finally doing something about it. Last Thursday, they teamed with 30 attorneys general at the state and district levels to sue Live Nation, Ticketmaster’s parent company since 2010. The antitrust lawsuit alleges that Live Nation has been stifling competition and gouging its customers for years.
If successful, this suit will lead to the break-up of Live Nation – not unlike what happened to AT&T in 1982. However, before betting on it at any top-rated sportsbook, we’ve got a long way to go until that happens, and in the end, it wasn’t Pearl Jam or any of the other musical justice warriors who got us to this point.
It was Taylor Swift, of course.
Who Is Live Nation?
Live Nation Entertainment, Inc. is a company founded in 2010 through the merger of Live Nation and Ticketmaster. The original Live Nation started in 1996 as SFX Entertainment and was the brainchild of Robert F.X. Sillerman, a New York media entrepreneur who owned a string of radio and TV stations in the ‘70s and ‘80s.
As for Ticketmaster, they were born in Phoenix in 1976 as a small company that sold hardware and licensed computer software for concert ticket providers. Four years later, Fred Rosen took over as CEO and moved Ticketmaster to Beverly Hills, to be closer to the entertainment industry.
And so the monster was created. Engaged with investment capital, Ticketmaster grew in size and swallowed up its competitors, including Ticketron in 1991 and TicketWeb in 2000. Sillerman launched SFX Entertainment with an eye on bringing concert promoters across the United States together, hoping to compete with Ticketmaster – but they merged instead, and the beast continued to feed under the Live Nation label.
Why Are People Upset With Ticketmaster?
Mostly because of those fees. If you’ve ever been to a concert in the U.S. or Canada, you’ve almost certainly paid a hefty service charge for your tickets, on top of the actual face value. That money doesn’t go to the musicians; like Pearl Jam, they can try to book one of the few venues that don’t have agreements with Live Nation, but those rooms are usually much smaller and less concert-worthy in general.
It’s not just the fees, though. A July 2019 report by Billboard found Live Nation was pumping tickets directly into the secondary market – i.e. scalpers – thus making it very difficult for fans to purchase seats for popular events at face value.
Then you have the various lawsuits over hidden fees, and the backlash against “dynamic pricing” for the 2023 tours by Bruce Springsteen, Blink-182 and The Cure. Robert Smith was not having it; he responded by slashing the face value of Cure tickets to as low as $20, and Ticketmaster eventually refunded some of those fees.
What Happened With Taylor Swift?
The last straw for music fans came in November 2022 when the Live Nation website crashed during pre-sales for the U.S. leg of Swift’s Eras Tour. Despite the crash, they still managed to sell 2.4 million tickets, a single-day record, but fans were up in arms over the high and hidden fees – not to mention the usurious prices on the secondary market.
Because the Swifties are in charge of the known universe, the DOJ leaped back into action after 30 years on the sidelines. The Federal Trade Commission also imposed a ban on hidden fees, and multiple states including New York and California outlawed “scalper bots” and other pricing mechanisms. Now that’s what I call… Swift justice.
What Will Happen to Ticketmaster?
Nothing yet. It’s probably going to take several years for this case (United States Department of Justice v. Live Nation Entertainment and Ticketmaster LLC) to work its way through the courts; in the meantime, those up-front service fees won’t be disappearing from your tickets.
However, there is indeed a price to pay for Live Nation. Shares in LYV dropped 5% after the lawsuit was filed last Thursday, down from around US$101 to $96, and they fell a bit more on Friday to $93 before inching back up to $95.99 as we go to press. It’s evolution, baby.
