Antitrust target Ticketmaster spends big on lobbying amid woeful 2022 | Music industry

Ticketmaster and its parent company Live Nation had a calamitous 2022 – managing to anger everyone from Taylor Swift and Bad Bunny to Joe Biden and Mexico’s president, Andrés Manuel López Obrador. As calls grow for action to rein in the concert monopoly in the US and abroad, the company seems to have hit on a new strategy: spending big in Washington.

Live Nation’s spending on lobbying jumped from about $250,000 in 2018 to nearly $1.3m in 2021, federal records show, and it may top that peak in 2022 and beyond. It has focused its lobbying campaign on the department of justice, as well as legislation aimed at greater transparency around ticket sales.

The spending is a response to the “serious challenges” Live Nation faces, said Sheila Krumholz, executive director of campaign finance analyst Open Secrets.

“The spending has a lot to do with them playing defense because they have been accused for several years of behavior that has been anticompetitive, they have been accused of being a monopoly company and they have the DoJ investigation, so they are fighting on a number of fronts,” Krumholz said.

The political spending comes amid mounting frustration among concertgoers and sports fans over alleged price gouging, soaring fees and Live Nation’s practice of withholding tickets that are then sold on the secondary market at inflated cost, among other issues.

In the US, the problems escalated after a chaotic November rollout of Taylor Swift Era tour presale tickets left thousands of fans without access to her shows. The controversy ignited bipartisan outrage among lawmakers who have called for Ticketmaster and Live Nation to be split, and led to a lawsuit that accuses Live Nation of fraud and antitrust violations.

In the mess’s wake, news broke of a justice department antitrust investigation that opened earlier this year, and within weeks the company was back in the headlines after at least hundreds of Bad Bunny fans were locked out of a Mexico City concert.

Meanwhile, Live Nation’s “dynamic pricing scheme” dramatically drives up ticket prices for popular events, and its fees, which critics say are excessive, sometimes top the cost of a ticket. Live Nation has worked closely with secondary market brokers and set up its own secondary market, where ticket prices are increased by an average of 50-150%, depending on the type of event, a government report found.

Consumer advocates, a growing number of lawmakers and attorneys general say the problems stem from Live Nation’s stranglehold on live entertainment, which has eliminated meaningful competition and, they claim, harmed artists and consumers. Since merging with Ticketmaster in 2010, Live Nation has controlled most of the US’s ticketing, and is among the largest promoters, venue owners and artist managers. When it doesn’t control one of those elements, it uses its leverage to force companies to work with it, critics say.

“The approval of the Ticketmaster-Live Nation merger led to a marketplace and concert space where there is a complete inability to go up against this company,” said Krista Brown, senior policy analyst at the American Economic Liberties Project, which is helping lead a campaign to reverse the merger.

The justice department investigation started months before the Swift debacle, and Live Nation’s 2021-2022 lobbying records show the company spending $960,000. However, the nation’s vague lobbying laws make it impossible for the public to know how much was spent specifically on lobbying the department.

Regardless, the Department of Justice has drawn criticism for how it has handled Live Nation in recent years. As part of the terms of its 2010 merger with Ticketmaster, Live Nation had to enter into a 10-year consent decree with the justice department. Among other provisions, it prohibited the new company from retaliating against venues for working with other ticketing services or forcing them to accept its terms in exchange for access to Live Nation artists.

The justice department found in late 2019 that Live Nation had repeatedly violated those rules but industry observers say it took little meaningful action. Though the justice department extended the consent decree for five years, the problems persist.

“Ticketmaster and Live Nation have come out on top every single time – even when the consent decree was reviewed and it was established by the DoJ that Live Nation violated it, very little changed,” Brown said. “Their control of the regulatory environment, whether overt or covert, seems quite strong.”

Live Nation’s lobbying records from the current election total $1.7m. The increase came after the introduction of the Boss Act, though vague reporting requirements make it impossible for the public to know how much of that sum was spent specifically on the act.

The Boss Act was named after Bruce Springsteen’s nickname and drawn up following a 2009 controversy in which fans were prevented by Ticketmaster from buying tickets to Springsteen’s tour. If passed, it would increase transparency around ticket sales and impose some new restrictions on secondary market sales.

The Federal Trade Commission (FTC) announced in October that it intended to develop new rules around “junk fees” and charges imposed on “captive” customers across the economy.

The rules aim to address “the black box nature of the fees”, Brown said. That would probably have implications for the entertainment industry and Live Nation, which imposes facility, convenience and processing fees that consumers must pay because Ticketmaster is the only company selling tickets to an event.

Live Nation’s recent financial filings show the number of tickets sold increased from 117m to 135m, or 15%, from Q3 2019 to Q3 2022. The revenue it collected from fees during the same time period jumped by about 65%, from $355m to $588m.

Meanwhile, its revenue jumped by 87% during the same period, fueled by increased ticket fees, higher ticket prices, more lucrative sponsorships and a push into the festival market.

After the company boasted of the spike during a 3 November earnings call with investors, shareholders repeatedly asked about legislation and the justice department investigation. The chief financial officer, Joe Berchtold, and other executives downplayed any potential threat. Berchtold said the discussion centered around “transparency” and did not pose a risk to the company’s revenues or structure.

“The commentary was not about fee levels or any of the other issues that some people have brought up,” he said. “That’s been looked at, and we feel comfortable with what our business model is in that regard.”

Executives said in the earnings call that they were supportive of “all in” pricing that is part of the Boss Act and would require companies to show the full price of a ticket up front, including fees.

Though no lobbying records are available for the period since the FTC made its announcement, Live Nation’s Berchtold assured shareholders there was no need to worry: “We will work with the FTC,” he said in the earnings call.

The company is also politically active at the state level, and spent $90,000 in Florida on legislation aimed at loosening regulations around secondary ticket market sales, Open Secrets found, while executives said they “worked with” the New York attorney general on the state’s implementation of “all in” pricing.

Still, Brown from the American Economic Liberties Project said consumer advocates are optimistic now that the Biden administration and the justice department have in place a much more serious antitrust team than the Trump administration had, which put up “weak guardrails”. The new antitrust team may be willing to take on the structural changes needed to protect consumers and artists, despite Live Nation’s lobbying, Brown added.

“It’s a pretty hopeful time,” she said.