WASHINGTON, D.C. – Today, U.S. Senator Mazie K. Hirono (D-HI), member of the Senate Judiciary Committee, questioned executives from Live Nation and competing live event companies, as well as antitrust experts and a musician, during a full committee hearing on anti-competitive behavior in the live entertainment industry. The hearing follows Live Nation subsidiary Ticketmaster’s disastrous pre-sale of tickets for the Taylor Swift Eras Tour late last year, which ultimately forced the company to cancel the public sale of tickets.
During her line of questioning, Senator Hirono highlighted the impact of Live Nation’s market power on consumers in Hawaii.
“Back in 2018, thousands of people in Hawaii tried and failed to get Bruno Mars tickets and similar kinds of occurrences happened in Hawaii, said Senator Hirono during the hearing. “I heard Mr. Berchtold say that after the merger [with Ticketmaster], they spent $1 billion to improve the Ticketmaster system. So you had—in 2018, quite a few years after the merger—the similar kind of situation with Bruno Mars and then you have Taylor Swift, so I’m just wondering what kind of improvements to the Ticketmaster system is actually being followed.”
Additionally, Senator Hirono asked Clyde Lawrence, a singer-songwriter who served as a witness on today’s panel, about what he hopes will happen after the hearing. In response, Mr. Lawrence listed a few ideal changes to the industry, including addressing the percentages of revenue that venues keep after events; expanding off-platform ticketing or ticketing choice; capping fees; and increasing transparency on settlement sheets between artists and venues.
A full transcript of Senator Hirono’s exchange is below and a link to download video is available here.
Senator Hirono: Well I think that Mr. Nuzzo and Ms. Bradish just responded that you would not support non-transferability. Very briefly, can you explain why not?
Kathleen Bradish, Vice President For Legal Advocacy, American Antitrust Institute: Well I think it goes to a regulatory solution to something that should be a competition issue. If there were competition, if we solve the competition issue here then costumers will get what they want. So it doesn’t get to the heart of the matter essentially.
Sal Nuzzo, Senior Vice President, The James Madison Institute: Thank you very much, Senator, it’s a good question and ultimately, we would look at it in a couple of ways. One is a property rights issue. As an issue purchasing a ticket, I should have the ability to transfer that ticket at a market rate. Secondly, I would point to a statistic I believe it was from a GAO report that close to if not a majority of the tickets on the resale market are going for under the market value so while I would contend that I’m not going to pay $500 let alone $5000 dollars to go see Taylor Swift, the secondary market allows artists like the band Lawrence who are selling to smaller venues and are growing, the ability to fill those venues especially when those cases come where an individual is unable to use their ticket.
Senator Hirono: Isn’t Ticketmaster also in the secondary market?
Mr. Nuzzo: I believe the largest secondary market is StubHub, but I do believe Ticketmaster is either building or growing a secondary market.
Senator Hirono: So, I’m surprised that Mr. Berchtold says that he would definitely support non-transferability. Nothing is simple. Mr. Lawrence as you sit here can you tell me what you hope will happen after this hearing?
Clyde Lawrence, Singer-Songwriter: Yeah it’s a great question. We have a few specific things that we would just love to see change in the industry however we’re able to get there. To list a few, I think that dealing with this whole inconsistency around ancillary revenues, which is something that we are not talking about as much today, the idea that Live Nation, or frankly most promoters, typically take 20% or more of our gross merchandise sales from the night under the idea that they’re providing the real estate, but we’re providing all the customers. As Mr. Nuzzo was talking about, you say you’re going to see a Harry Styles show, you’re not going to X, Y, Z arena. So how come we don’t get any of their bar sales? That’s one example, I can keep listing more: expansion of off platform ticketing, or ticketing choice, caps on fees, greater transparency on settlement sheets that we receive at the end of the night. That’s a whole other conversation but I could list ten things about the way those are formatted and broken out in a way that feels not totally ideal or fair to artists. I can go on and on.
Senator Hirono: So, there are a number of things that we can do, do these kinds of things for you to be able to probably negotiate better. Ms. Bradish, do we have to change any laws to enable an artist like Mr. Lawrence to do what he wants to be able to do?
Ms. Bradish: Well I think we need to support strong anti-trust enforcement. We have to give the agencies the resources and the legislation, the clarity of legislation, that will enable them to attack practices like this. So yes, we need to support and give resources to the existing anti-trust agencies and the existing laws, and we should consider other laws, like Senator Klobuchar’s law that would clarify and strengthen those anti-trust laws.
Hirono: Also, the BOSS Act, Senator Blumenthal’s bill, which I signed onto which creates greater transparency. You testified, Ms. Bradish, that there should be a presumption for vertical mergers as we do for horizontal mergers. What would that presumption be for vertical mergers?
Ms. Bradish: For vertical mergers we can obviously look at the share in a particular market. We can look at the ability of the monopolist to exercise power in another market, downstream or upstream. There are a number of ways to get at the same problem, but the idea is that you give the DOJ or FTC a foothold in order to be able to bring a case before a court. A foothold to be able to say “this is illegal.”
Senator Hirono: Do we need to amend the Sherman Act to create such a presumption for vertical mergers or do we need to strengthen the Clayton Act, section 7?
Ms. Bradish: I think that the current Clayton Act and Sherman Act don’t have the presumptions for horizontal mergers, those come from the case law. So, we don’t necessarily need to change the fundamental contours of the Clayton Act and the Sherman Act. In fact, I would suggest that the Clayton Act already builds the in.
Senator Hirono: Well, the Live Nation-Ticketmaster merger has already occurred. I’m interested in what we can do to prevent this kind of market share capture in other vertical mergers. I just want to mention that we’ve been talking a lot about the debacle of the Tylor Swift situation. Back in 2018, thousands of people in Hawaii tried and failed to get Bruno Mars tickets and similar kinds of occurrences happened in Hawaii and I heard Mr. Berchtold say that after the merger, they spent $1 billion to improve the Ticketmaster system. So, you had, in 2018, quite a few years after the merger, you had the similar kind of situation with Bruno Mars, and then you have Taylor Swift, so I’m just wondering what kind of improvements to the Ticketmaster system is actually being followed. Thank you very much.