In early 2023, prompted by Live Nation Entertainment’s potential abuse of power in the live music industry, the Department of Justice initiated an antitrust investigation into its businesses. On January 24th, 2023, the U.S. Senate Committee on the Judiciary held a hearing titled “That’s the Ticket: Promoting Competition and Protecting Consumers in Live Entertainment”, which addressed the lack of competition in the primary and secondary event ticketing markets and Live Nation Entertainment’s near monopoly of the multibillion-dollar live music industry.
Since their merger in 2010, events promoter and venue operator Live Nation and ticket sales giant Ticketmaster have dominated the entertainment industry, as they now control an estimated 70% of the ticketing and live event venues market. Live Nation and Ticketmaster merged in 2010 under the condition of a consent decree, which resulted in Ticketmaster becoming a wholly-owned subsidiary of Live Nation. This consent decree, which resulted from the 2010 Final Judgement, would forbid Live Nation from retaliating against venues that refused to use Ticketmaster as their ticketer for ten years following the merger until 2020 to ensure healthy market competition. However, the Department of Justice led its first investigation into Live Nation in 2019 and alleged their violation of the consent decree. Thus, they began an enforcement action of an antitrust decree, which resulted in a settlement between Live Nation Entertainment and the U.S. government. The Department of Justice’s Antitrust Division successfully extended the Final Judgement consent decree by five and a half years to 2025. It clarified certain prohibited conducts, which will “help deter additional violations and allow for easier detection and enforcement if future violations occur”. Nearly four years later, the Department of Justice started investigating the giant again due to exorbitantly high ticket prices.
In November 2023, the Senate Permanent Subcommittee on Investigations (“PSI”) issued a subpoena to Live Nation Entertainment seeking documentation regarding Live Nation and Ticketmaster’s business practices, ticket prices, and fees for tickets to live events. While the PSI had already contacted Live Nation Entertainment seeking such documents in March 2023, the giant failed to comply with PSI’s requests voluntarily and refused to produce critical documents for the Subcommittee’s inquiry. In its letter to Live Nation CEO Michael Rapino, Subcommittee chair Senator Richard Blumenthal also sought additional documentation, including “records related to Live Nation/Ticketmaster’s failure to combat artificially inflated demand fueled by bots in multiple, high-profile incidents, which resulted in consumers being charged exorbitant ticket prices”. The subpoena seeks to better understand Ticketmaster’s unfair practices and misuse of monopoly power by requesting “annual financial data related to fees, the company’s recommendations for ticket pricing, business strategies regarding ticket pricing, secondary ticketing, and bots, communications relating to high-profile incidents in 2022, and customer research and surveys regarding ticket pricing and fees”.
The recent world tours of Taylor Swift and Beyonce highlighted the ongoing issue of exorbitantly high ticket prices resulting from Live Nation’s decade-long merger with Ticketmaster. With hour-long wait lines, websites crashing, and tickets that are impossible to get, Live Nation Entertainment’s monopoly becomes more challenging to ignore as consumers call for the breakup of the giant.
There are three main identifiable reasons for the surge in ticket prices. First, “average ticket prices have more than tripled since the mid-90s, even before they hit the resale market, in part due to increasingly elaborate productions for major arena tours”. The second reason is that additional fees for concert tickets can be as high as 78% of the ticket price itself, thus driving up the customer price even further. Venues, promoters, artists, and Ticketmaster will then split up these fees. Finally, Ticketmaster retains as much as 90% of tickets for the secondary market, thus making it increasingly difficult to find tickets. The secondary market includes artists’ fan clubs, credit card companies, promoters, radio stations, and resellers who buy tickets in bulk and resell them through bots at high markups ranging from an average of 50% to 7,000%.
While confident performers have attempted to cut out Ticketmaster from the process to make their tickets more accessible and affordable to fans, Live Nation Entertainment dominates the industry to such an extent that it becomes almost impossible to operate without them.
What lies ahead for Live Nation Entertainment is unclear. While the live ticketing industry could benefit from new entrants, Live Nation Entertainment controls such a high percentage of the industry that competitors have little to no leverage against the giant. As we are nearing the end of their renewed consent decree, the Department of Justice will have to find a solution to preserve performers’ and consumers’ interests from such monopolistic power.
