Coronavirus

House Reps to DOJ: Examine Live Nation Consent Decree's 'Fundamental Shortcomings'

capitol building
Getty Images

The United States Capitol Building in Washington, DC.

Lawmakers are placing renewed scrutiny on Live Nation and the decade-old consent decree governing its merger with Ticketmaster that expires in July.

On Dec. 6, four representatives with the U.S. House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law sent a letter to Makan Delrahim, assistant attorney general for the Department of Justice's Antitrust Division, asking for an in-person briefing on the "anti-competitive nature of the online ticketing marketplace."

"Our constituents are facing significantly increased live event prices and a lack of meaningful alternatives to purchase tickets to live events," reads the letter signed by reps Ken Buck, R-Colo.; Matt Gaetz, R-Fla.; Lucy McBath, D-Ga.; and ranking member Jim Sensenbrenner, R-Wis. "We request that you take all necessary action to protect consumers and enhance competition."

The letter is the latest congressional move to look at Ticketmaster's dominance of the online ticketing market. In August, Sens. Richard Blumenthal of New Jersey and Amy Klobuchar of Minnesota asked Delrahim to look at overall competition in the ticketing business. And last month, the House Committee on Energy and Commerce announced a bi-partisan investigation into the primary and secondary ticketing industries. 

The Dec. 6 letter is more narrowly focused on the competitive landscape for ticketing and addresses a provision within the 2010 consent decree final judgement that prevents Live Nation from requiring "venue owners to use the company's primary ticketing service in order to host an [Live Nation Entertainment]-represented artist." 

"We believe the DOJ's remedies have not achieved their intended goals," the Dec. 6 letter reads, adding that Live Nation "has taken full advantage of loopholes, including bundling its products and services in a way that controls both the primary and secondary ticketing markets."

The effectiveness of the consent decree's anti-retaliation provision has been the subject of debate in recent years as its July 2020 expiration nears. Besides forcing Ticketmaster to divest several assets and temporarily license its technology to AEG, the company was barred from retaliating against venues and promoters that didn't use its technology. 

"The decree gets a lot of misconception," Live Nation CEO Michael Rapino said in September at the Goldman Sachs Communacopia conference in New York. "I negotiated it and it's very simple: It says we can't threaten venues. We can't say to a Ticketmaster venue that says they want to use a different ticketing platform, 'If you do that, we won't put shows in your building.' It also says we can do what's right for our business, so we have to put the show where we make the most economics and maybe that venue [that wants to use a different ticketing platform] won't be the best economic place anymore because we don't hold the revenue."

The difference, Rapino goes on to explain, is that the company is allowed to incentivize venues to use Ticketmaster. He instructs his employees to "win the business straight," he said. "You can bundle the business, you can add value, you can present together.... It's great to have Ticketmaster ticketing your building and have Live Nation as your content partner. That's how we generally win a business: because of the strong value proposition we provide."

That distinction -- between retaliating against companies that go with competitors (not allowed) and rewarding clients that do go with Ticketmaster (allowed) -- critics argue has essentially given Ticketmaster the de facto monopoly position in music and the ticketing supply chain that many feared 10 years ago. 

After all, despite some competition from both the primary and secondary markets, Ticketmaster has grown its market share and picked up clients once held by its competitors. In 2010, Washington D.C. promoter Seth Hurwitz testified to Congress in opposition to the merger and unsuccessfully sued Live Nation on anti-trust grounds. Now two of his venues -- the Anthem and Merriweather Post Pavilion use Ticketmaster. Same with Kroenke Sports and Entertainments, which famously split with Ticketmaster in the 1990s and is now using the platform for most of its Denver venues.

In both instances, Ticketmaster took over the business because of issues with the venues' previous ticketing platforms. Ticketfly, which had ticketed Hurwitz's buildings, was sold to Eventbrite in 2017 and is being phased out and replaced with Eventbrite Music. Kroenke had been testing a new ticketing system run by former Ticketmaster CEO Nathan Hubbard, but have yet to use the system despite investing in Hubbard's company.

"As a publicly traded company, I imagine that Live Nation has 100% followed the decree, it would be too risky not to," said Patrick Ryan with ticketing distribution firm Eventellect, which works with Live Nation and a number of sports teams. 

"If you're running a building, you're going to think logically and selecting Ticketmaster is how most GMs play it safe," he continued. "You know what Live Nation can deliver from a content standpoint and you know that Ticketmaster has invested millions into their product."

While the secondary market wasn't part of the consent decree, the company's critics have seized on Ticketmaster technology that allows venues and promoters to significantly restrict how and where tickets are resold to accuse the company of acting monopolistically. Groups like the Fan Freedom Project, which receives funding from Ticketmaster competitor Stubhub and its owner eBay (who announced it was selling Stubhub to Viagogo in December), have often accused Ticketmaster of abusing its large market share and position in the supply chain as a primary ticketing provider to -- as it said in an October press release -- "develop technologies that force fans to resell tickets on the company's platforms" like Ticketmaster and have made it "impossible to resell tickets on any other platform."

The argument that fans -- and, by extension, professional ticket brokers -- should be able to resale tickets without restrictions has had political resonance across the country with nearly a dozen states passing laws that make it difficult to restrict resale. 

"Americans deserve an online ticketing marketplace that is based on free-market principles and emphasizes consumer choice," the Dec. 6 letter reads. "We believe it is critical that the DOJ review the effectiveness of the 2010 consent and pursue remedies that guarantee competition in the online ticketing marketplace."

The four congressional members are asking for an in-person briefing with Delrahim in the coming weeks, although a source tells Billboard that the committee is currently preoccupied with the current impeachment proceedings involving President Donald Trump and isn't expected to take up any official business on the consent decree until the new year. 

Live Nation declined to comment for this story. 


THE BILLBOARD BIZ
SUBSCRIBER EXPERIENCE

The Biz premium subscriber content has moved to Billboard.com/business.


To simplify subscriber access, we have temporarily disabled the password requirement.