The Taylor Swift saga has been a black mark for Ticketmaster’s parent company, Live Nation Entertainment (LYV).
A report from The New York Times 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 reveals that Live Nation has continued to abuse its dominant market position despite two prior consent decrees, we call on the department to consider dissolving the Ticketmaster-Live Nation merger and the company to break up,” the trio said in a letter to the DoJ.
Klobuchar, who also chairs the Senate antitrust panel, said a hearing would take place this year, although she did provide a date. The DoJ’s investigation, which reportedly predates the rigged sale, comes after hundreds of thousands of fans were unable to purchase advance tickets for Taylor Swift’s upcoming “Eras” tour.
Ticketmaster canceled its general ticket sale after the messy event with Taylor Swift even weighing in on the situation – claiming it was “terrible” to see mistakes happen.
“I’m not entirely surprised,” North Carolina Attorney General Josh Stein told Yahoo Finance in an interview.
Stein, who joined Jonathan Skrmetti, Attorney General of Tennessee in announcing its own separate 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 that our free market system works the way it’s supposed to, and an essential element is free competition,” Stein explained. “Competition is what drives prices down, and improves the customer experience and improves quality. What clearly happened earlier this week was a collapse and the quality of service that Ticketmaster provides.”
Shares of Live Nation hit their lowest levels since February 2021 in the immediate aftermath of Swift’s canceled sale and initial public outcry.
‘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 is more than 80% of the primary ticket market sales, so eight out of every 10 tickets sold today go through Ticketmaster,” he explained.
“With their control of venues and artists simultaneously, it’s created what’s called a vertical monopoly where they control the entire infrastructure from soup to nuts,” Szabo said.
Other antitrust violations include Ticketmaster’s market power (the Supreme Court defines market power as anything over 75% market share), abuse of market power (ie, artists being forced to use the Ticketmaster platform), and consumer harm (ie, declining quality, rising fees). in Szabo’s view.
“This is a slam dunk case of monopoly. This a slam dunk case of antitrust law violations, and this is done by one of the most hated companies on the planet,” Szabo said, adding possible solutions include not only ‘ a separation. between Ticketmaster and Live Nation, but also more transparency about the number of tickets available to the general public versus preferred groups.
Josh Katz, founder and CEO of Web3 Marketplace and NFT ticket 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 together,” Katz said, suggesting that venues should not be allowed to enter into exclusive ticketing contracts.
“No one should be forced to use Ticketmaster just because the venue is owned by Live Nation and then the tour is sponsored by Live Nation, which is also the bank and promoter,” Katz continued.
Szabo noted artists are as much victims as the fans.
“Live Nation and Ticketmaster control dozens of venues. It’s hard for artists to stand up and call them out for fear of repercussions or being blacklisted and blackballed,” Szabo said.
“That’s part of the problem — it’s hard for artists to stand out against 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 alexandra.canal@yahoofinance.com
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