The most critical nexus in the free market is the transactions that occur when willing sellers and interested buyers meet. One does not usually look to the federal government to resolve concerns that the costs of particular goods or services are too high.
Sometimes there are exceptions. There is general agreement, for example, that the government can and should act when a company性视界传媒檚 control of all or most of a single market allows it to act in ways adverse to the best interests of consumers. Now that it costs almost as much to buy a pair of concert tickets as it does to pay the monthly bill, the government has correctly started to examine the live entertainment industry more closely.
The recent U.S. Department of Justice action against Ticketmaster and Live Nation, its parent company, promises long-overdue consumer relief. Since they combined their operations, the two companies have used their virtual monopoly in the marketplace to raise prices far beyond where a free and fair market would put them.
This has frustrated artists and athletes, policymakers who性视界传媒檇 prefer prices be set by demand, and consumers who recently discovered they couldn性视界传媒檛 get anywhere near Taylor Swift unless they were at a Kansas City Chiefs game.
Their 2010 merger, which made Live Nation/Ticketmaster the largest, most influential company in the live event business, was only approved after federal regulators were persuaded that competition within the industry would be unaffected. At the time, Christine Varney, then the head of DOJ性视界传媒檚 antitrust division, assured one and all there would be 性视界传媒渆nough air and sunlight in this space for strong competitors to take root, grow, and thrive.性视界传媒
She was wrong. The opposite happened. Consumers were too often left with one choice when seeking out tickets to live entertainment, something everyone should have seen coming. Letting Live Nation and Ticketmaster operate as one firm allowed them to dominate the live events market. They have virtual control over concert promotion, management, and ticketing and something close to a stranglehold over venue management.
How is this possible? Of the world性视界传媒檚 top 100 amphitheaters, 56 are owned and/or operated by Live Nation. Almost two-thirds of the top-grossing venues in the U.S. are linked to the company, with annual earnings above $2 billion.
With venue control comes consolidation, and, in this case, at least, consolidation leads to exclusivity. Live Nation性视界传媒檚 response has been to deny it has 性视界传媒渕onopoly power性视界传媒 and point to other companies through which a person can buy event tickets. That性视界传媒檚 a diversion. Its closest real competitor, AEG Presents, is less than half the size of Live Nation. They can try to get us to look the other way, but their excuses and misdirection fail to explain why their tactics are not anti-competitive, as the DOJ asserts in its lawsuit.
Cartel-style arrangements with would-be competitors 性视界传媒 one firm described itself as a 性视界传媒渉ammer性视界传媒 for Live Nation 性视界传媒 buying up or acquiring majority stakes in regional rivals, and coercive techniques all contribute to their monopoly position.
Live Nation性视界传媒檚 questionable tactics extend to the secondary and resale markets, specifically through its efforts to safeguard ticketing revenue and data through a software called SafeTix.
Ticketmaster claims SafeTix性视界传媒檚 rotating bar code system limits fraud. It also creates a moat around consumer data, requiring all ticket transfers to occur on its platform. This forces consumers to sign up with their app, pushing secondary ticket purchasing back through Ticketmaster and bringing all consumer data with it, leaving its rivals effectively cut off from the transactions.
Live Nation性视界传媒檚 alleged anti-competitive practices and contracts have produced a record-setting first quarter in 2024, with revenues up 21% to about $3.8 billion. It性视界传媒檚 been a meteoric rise. Since the merger, the stock price has increased 967%, more than double the 382% increase of the S&P 500 over the same period.
The industry is trapped in a web of Live Nation性视界传媒檚 design. It has no choice but to use it and Ticketmaster. Some say the lawsuit won性视界传媒檛 do anything to address soaring ticket prices. Still, it性视界传媒檚 hard to see how adding to the choices available to artists, venues, and consumers won性视界传媒檛 help.
It is necessary and proper to check Live Nation and Ticketmaster性视界传媒檚 structural power within the industry. Unlike some of the other supposedly corrective, anti-monopolistic actions taken by the Biden Administration, the DOJ lawsuit is not an antitrust abuse.
Washington has a chance to stand up for consumers. It should take it.
