The Taylor Swift saga was a black mark for Ticketmaster’s parent company, Live Nation Entertainment (LYV).
A New York Times report last week said the Justice Department had opened an antitrust investigation into the entertainment giant.
Senators Richard Blumenthal (D-CT), Amy Klobuchar (D-MN) and Edward Markey (D-MA) have called for congressional hearings on the company. “If the investigation finds that Live Nation has continued to abuse its dominant market position despite two prior consent decrees, we urge the department to consider unwinding the Ticketmaster-Live Nation merger and disbanding the company,” a wrote the trio in a letter to the DoJ.
Klobuchar, who is also chair of the Senate antitrust panel, said a hearing would take place this year, although she provided a date. The DoJ investigation, which is believed to predate the botched sale, comes after hundreds of thousands of fans were unable to purchase pre-sale tickets for Taylor Swift’s upcoming ‘Eras’ tour.
Ticketmaster canceled its general ticket sale following the messy event with Taylor Swift even weighing in on the situation – saying it was “excruciating” to see mistakes happening.
“I’m not entirely surprised,” North Carolina Attorney General Josh Stein told Yahoo Finance in an interview.
Stein, who joined Tennessee Attorney General Jonathan Skrmetti in announcing its own respective investigation last week, said its ultimate goal is to ensure that Ticketmaster does not use its monopoly power in a way that harms American consumers.
“The biggest issue is making sure our free market system works the way it’s supposed to, and a key part is free competition,” Stein explained. “Competition is what drives prices down, improves customer experience and improves quality. What clearly happened earlier this week was an outage and the quality of service offered by Ticketmaster.”
Shares of Live Nation hit their lowest level since February 2021 in the immediate wake of Swift’s canceled sale and initial public outrage.
“Slam Dunk Antitrust Case”
“This is a slam dunk antitrust case under existing antitrust law,” Carl Szabo, professor of internet law at George Mason University’s Scalia Law School, told Yahoo Finance.
“Ticketmaster accounts for over 80% of main ticket market sales, so eight out of 10 tickets sold today go through Ticketmaster,” he explained.
“With their simultaneous control of venues and artists, it’s created what’s called a vertical monopoly where they control the whole nut soup infrastructure,” Szabo said.
Other antitrust violations include Ticketmaster’s market power (the Supreme Court defines market power as anything above 75% market share), abuse of market power (i.e. artists are forced to use the Ticketmaster platform) and consumer harm (i.e. lower quality, higher fees), according to Szabo.
“This is a slam dunk case of monopoly. This is a slam dunk case of antitrust violations, and this is being done by one of the most hated companies on the planet,” Szabo said, adding that possible solutions not only include a break between Ticketmaster and Live Nation, but also more transparency on the number of tickets available to the general public versus privileged groups.
Josh Katz, founder and CEO of marketplace Web3 and NFT ticketing company YellowHeart, agreed that Ticketmaster’s operations make it “very, very difficult” to compete.
“It becomes very, very difficult for other people to compete once Ticketmaster and Live Nation work in unison,” Katz said, suggesting venues shouldn’t be allowed to enter into exclusive ticketing deals.
“Nobody should be forced to use Ticketmaster just because the venue is owned by Live Nation and the tour is sponsored by Live Nation, which is also the bank and the promoter,” Katz continued.
Szabo noted that artists are just as much victimized as fans.
“Live Nation and Ticketmaster control dozens of venues. It’s hard for artists to get up and call them for fear of repercussions or being blacklisted and blackballed,” Szabo said.
“That’s part of the problem – it’s hard for artists to break away from the monopoly that is Ticketmaster.”
Alexandra is a senior entertainment and media reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at [email protected]
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