The Live Event Ticketing Industry Is Playing Monopoly
January 25, 2010 marked the day when Live Nation, the largest producer of live concerts in the world, and Ticketmaster Entertainment, the world’s leading live entertainment ticketing and marketing company, completed their Department of Justice-brokered merger. At the time, officials touted the fact that the merger would encourage competition and drive ticket prices down. However, since then, Ticketmaster’s prices more than tripled over the past two decades. Today, various estimates show that Ticketmaster controls ticketing at 70-80% of major concert venues in the United States. The reality was that in 2010, two giant entertainment companies joined together to create a behemoth, dubbed Live Nation Entertainment. Rather than encourage competition, Live Nation stifled it, and its sway on the market allowed new subsidiary Ticketmaster to continuously increase ticket prices.
A monopolist is a firm with significant and durable market power, but merely possessing monopoly power is not in itself an antitrust violation. Moreover, possession of monopoly power is not unlawful unless it is accompanied by an element of anticompetitive effect (say, for example, pressuring venues to sign contracts with a specific ticketing company). Whether a firm is in fact a monopoly requires further investigation, such as whether a firm has the power to control prices or exclude competition. If a firm can profitably raise prices substantively above the competitive power, then that’s a strong indicator that a firm is a monopolist.
Additionally, when evaluating monopoly behavior, courts will look at the firm’s market share. Typically, a firm that has less than 50% of the sales of a particular product or service within a geographic area will not be considered a monopolist, though some courts require higher thresholds. Per the FTC, a firm’s leading position must be sustainable over time; a firm will likely not have lasting market power if new or competitive firms can discipline the conduct of the leading firm.
Today, not only does Ticketmaster control ticketing at far more than 50% of major U.S. concert venues, but Ticketmaster also serves as the primary ticketing provider for more than 80% of NHL, NFL, and NBA stadiums across the country. With such a large share of the market, Ticketmaster can raise prices with ease as there are few other firms to compete with. Live Nation has refuted reports that the company has pressured venues in cities ranging from Atlanta to Las Vegas into using Ticketmaster to sell tickets at the risk of losing its business, but that pressure may be more implicit than explicit. While other primary and secondary ticketing companies such as AEG, StubHub, and SeatGeek exist, they can only attempt to compete in a market that is dominated by one firm. Ticketmaster/Live Nation’s sheer domination makes it harder for venues to opt to sell tickets through other ticketing companies, creating an uneven playing field that acts as a barrier for entry for new companies and deters existing companies from competing.
In 2019, Justice Department officials found that Live Nation repeatedly violated the antitrust agreement as part of its 2010 merger. Competitors complained that Live Nation pressured music venues to sign contracts with Ticketmaster, behavior that violated the terms of the consent decree that accompanied the terms of the merger. In response to findings that Live Nation repeatedly violated the 2010 agreement prohibiting the company from retaliating against concert venues for using another ticketing company, threatening concert venues, or undertaking other specified actions against concert for years, the DOJ modified the agreement to make it clear that such conduct was prohibited. The decree was modified and extended through 2025. The DOJ’s response may very well have been nothing more than a slap on Ticketmaster’s wrist.
Although the COVID pandemic put a damper on live events, live event ticket prices are skyrocketing. The resale ticketing market is mirroring price increases as the average resale price per ticket increased by about 28% for sporting events and around 45% for concert tickets since the start of the pandemic. The new normal will be paying much more for live event tickets than in the past to see the home team play or your favorite music artist perform.
Given that Ticketmaster is such a dominant firm in the market, it is likely to reap the rewards for inflated ticket prices and high demand. This was part of the problem when it came to selling tickets for Taylor Swift’s first tour since 2018. To keep the “Eras” Tour fiasco relatively short, Ticketmaster was ill-prepared for Taylor Swift’s popularity. The day that presale tickets opened for the tour, 2 million tickets were sold, the most ever sold for one artist in one day. The high traffic overwhelmed Ticketmaster’s website, which crashed. Resale sites listed tickets at thousands of dollars. Not only did this lead to very angry consumers and policymakers, who respectively filed class action lawsuits and questioned whether the Live Nation/Ticketmaster merger should be broken up, but the debacle shined a bright spotlight on the frustrating industry and market power that Ticketmaster has enjoyed for decades.
Following the website outages, poor customer service, long wait times, and the resale of tickets for thousands of dollars on resale sites, Democratic senators called for the DOJ to break up the merger if any misconduct was found in an ongoing investigation into Live Nation Entertainment. On January 24, 2023, one day shy of the merger’s thirteenth birthday, lawmakers on both sides held a Senate Judiciary Hearing into Live Nation and the lack of competition in the ticketing industry. During the hearing, lawmakers questioned Live Nation president and CFO Joe Berchtold about whether the merger allowed the company to unfairly grow its market share. Berchtold acknowledged that the industry has issues, but blamed Ticketmaster’s issues on bots and the proliferation of scalping.
Others who testified at the hearing included Jerry Mickelson, president and chief executive of Jam Productions who stated that some venues’ biggest fear is that “if they leave Ticketmaster, they will lose content,” supporting implicit pressure that Live Nation/Ticketmaster places on venues, effectively stifling competition. Senator Ted Cruz asked every witness whether Ticketmaster is a monopoly, to which almost everyone affirmed as true. Berchtold, on the other hand, denied that his company was a monopoly.
The DOJ’s ongoing investigation should help shed even more light on the matter at hand. The senate hearing helped lawmakers to come together to investigate Live Nation/Ticketmaster’s ongoing behavior. A little over a week after the Senate Judiciary Hearing, President Biden called for limits to be placed on the fees that can be charged for live entertainment tickets. At the end of the day, however, the Live Nation and Ticketmaster merger constitutes a textbook monopolist. How anyone thought that the merger of the two companies would result in lower prices and higher competition is baffling. Whether the merger should break up should not be a question that lawmakers should be asking; the merger should have never happened in the first place.
Ticketmaster could have taken steps to help facilitate competition. It could have forfeited 20% of its market power to competitors and new market entrants and still have been an industry leader. The 2010 merger of the two companies was a disservice to consumers who suffer the most from the monopolistic behavior. While the DOJ gave the merger a stern warning in 2019, it may need to do a lot more to right the wrongs. The senate hearing capitalized on consumer’s growing frustrations with Ticketmaster and the ticketing industry more generally, but it may take an antitrust lawsuit to really address the problem.
Ticketmaster can blame bots and technology, but it owes a duty to consumers to be transparent and truthful about the status of its sales. The fact that there currently is an ongoing investigation into the merger’s behavior is telling, clearly some actions have violated terms of the decree. The merger should be held accountable for repeated violations. The Live Nation/Ticketmaster merger has been a leader for well over a decade, yet another sign that the monopolistic behavior has gone unchecked.
The Taylor Swift ticket debacle was not unprecedented, but it did bring much needed light to an ongoing situation. Now, it’s up to lawmakers, the DOJ, and Live Nation to work together and independently to make much needed changes that will positively benefit future eventgoers. Consumers and lawmakers should brace themselves, though: Beyoncé is going on tour this year, and tickets will be sold through Ticketmaster in February 2023.
Ciannah Gin is a second-year law student at Cornell Law School. She obtained her degree in English at the University of Southern California. Prior to starting law school, Ciannah wrote and produced affiliate marketing content for Forbes and Business Insider.
Suggested Citation: Ciannah Gin, The Live Event Ticketing Industry Is Playing Monopoly, Cornell J.L. & Pub. Pol’y, The Issue Spotter, (February 13, 2023), http://jlpp.org/blogzine/the-live-event-ticketing-industry-is-playing-monopoly/.