Field Dispatch
FTC vs. Live Nation | Matt Connarton Unleashed
Speaker 1: We have a little bit of time, I want to
Speaker 1: get in a music news story. You know, we do
Speaker 1: like to cover if we have a little bit of
Speaker 1: time in the show. Some weeks, we'll cover some music
Speaker 1: industry news going on, especially with the audience we have.
Speaker 1: We know a lot of musicians listen to the show,
Speaker 1: a lot of industry people, and I happen to see
Speaker 1: this pop up. And this relates to a subject that
Speaker 1: comes up often on the show, and that is Live
Speaker 1: Nation and it's a ticketing arm ticket Master. It's the
Speaker 1: same company. If you didn't know Live Nation and Ticketmaster,
Speaker 1: they are interchangeable, kind of like Comcasts and Exfinity. You
Speaker 1: can say either one and it's the same company.
Speaker 2: But again Healthcare Optum owned by the same people. Yeah,
Speaker 2: everybody's good, Like businesses have like a ton of these days,
Speaker 2: but it is kind of hard to keep track of
Speaker 2: the subsidiaries.
Speaker 1: This is from Music Business Worldwide dot Com And I
Speaker 1: didn't realize this until this morning, but this just happened.
Speaker 1: A couple days ago. Live Nation and Ticketmaster sued by
Speaker 1: the Federal Trade Commission over alleged illegal ticket resale tactics.
Speaker 1: Because something that we've talked about on the show whenever
Speaker 1: we talk about Live Nation and Ticketmaster is how you know,
Speaker 1: because obviously over the years, ticket prices keep going up
Speaker 1: and up and up, long before there was any hint
Speaker 1: of severe inflation in the economy, just completely separate from
Speaker 1: all that, you know, and people feel, people feel gouged,
Speaker 1: and it gets so expensive. And one of the things
Speaker 1: that goes on is, you know, we've talked on the
Speaker 1: show about how these small companies that are effectively ticket
Speaker 1: scalpers will buy up as soon as Live Nation puts
Speaker 1: a show on sale, they'll buy up a bunch of
Speaker 1: tickets and they'll resell them on their own sites at
Speaker 1: a higher price, especially once Live Nation Ticketmaster runs out
Speaker 1: of the tickets. But a lot of them have been
Speaker 1: bought up by scalpers who then resell them. But what
Speaker 1: a lot of people don't know is some of these
Speaker 1: companies that are doing that are actually owned to buy
Speaker 1: ticket Master. So Ticketmaster sells tickets to these own to
Speaker 1: their own yeah, to themselves effectively, and use this system
Speaker 1: to jack up the prices. Yeah, most people don't realize.
Speaker 2: I know about scalpers, and I've always thought that these
Speaker 2: companies are supposed to have safeguards and please stop all
Speaker 2: of that. Yeah, so I will say that, not that
Speaker 2: I'm totally surprised, but heck wow.
Speaker 1: Yeah, it's a dirty, dirty business.
Speaker 2: And then selling them back to you for triple the cost.
Speaker 1: So yeah, So here's the story. This is again, this
Speaker 1: is from Music Business Worldwide dot Com. The Federal Trade
Speaker 1: Commission has sued Live Nation and its ticketing arm Ticketmaster,
Speaker 1: accusing the company of profiting from scalpers operating on its platform.
Speaker 1: In a complaint filed on Thursday, September eighteenth and the
Speaker 1: US District Court for the Central District of California, The
Speaker 1: FTC accused Ticketmaster of failing to uphold its own ticket
Speaker 1: purchase limits, in effect allowing scale, in effect allowing scalpers
Speaker 1: to buy up large numbers of tickets and to resell
Speaker 1: them on the secondary market at markups. So the secondary market,
Speaker 1: that's these you know, it's them Joe's Tickets dot com
Speaker 1: or whatever. Yeah, you know.
Speaker 2: It's only three yeah, yeah, they buy all the tickets
Speaker 2: and then if you really want to go, Yeah, the
Speaker 2: only way to go is to pay those guys.
Speaker 1: And that's why Ticketmaster limits how many tickets you can buy.
Speaker 1: It once except except they don't actually do it for themselves. Apparently.
Speaker 1: The FTC says Ticketmaster is motivated to do this because
Speaker 1: it makes additional fees on the tickets resale. Ticketmaster can
Speaker 1: triple dip on fees, collecting fees from one brokers when
Speaker 1: they purchase the tickets on the primary market, two brokers
Speaker 1: again when Ticketmaster sells their tickets on Ticketmaster's secondary market,
Speaker 1: and finally three consumers who purchase tickets from Ticketmaster on
Speaker 1: its secondary market. Unquote, says the complaint. Joining the FTC
Speaker 1: in the lawsuit are the district attorneys of seven states, Colorado, Florida, Illinois, Nebraska, Tennessee, Utah,
Speaker 1: and Virginia. The complaint alleges that Ticketmaster violated the Bots
Speaker 1: Act bots. The Bots Act, the twenty sixteen law forbidding
Speaker 1: the use of bots to buy tickets in online stores.
Speaker 1: Live Nation has in the past supported the Bots Act,
Speaker 1: or at least you know, on the public Publicly. The
Speaker 1: FTC notes that Live Nation's policy is to allow artists
Speaker 1: to sell to set ticket purchase limits themselves, but quote
Speaker 1: in private, defendants have tacitly worked with these very same scalpers,
Speaker 1: allowing them to unlawfully purchase millions of dollars in tickets
Speaker 1: in the primary market so that defendants can extract more
Speaker 1: profit for themselves when reselling those tickets on the secondary
Speaker 1: market unquote.
Speaker 2: Rotest created what ruins the world.
Speaker 1: The FTC alleges that Ticketmaster has been aware for years
Speaker 1: that certain ticket buyers have violated the limit and turned
Speaker 1: a blind eye to the practice. The complaint states that
Speaker 1: in twenty eighteen, Ticketmaster identified five ticket brokers who controlled
Speaker 1: six three hundred forty five ticket Master accounts and possessed
Speaker 1: more than two hundred forty six thousands I'm sorry, two
Speaker 1: hundred forty six thousand tickets to nearly twenty six hundred
Speaker 1: events Jesus FTC complaint against Live Nation. Okay, so oh,
Speaker 1: we have to.
Speaker 2: Have the ticket prices up so high.
Speaker 1: So, the complaint states quote. In public, defendants maintain that
Speaker 1: their business model is at odds with brokers that routinely
Speaker 1: exceed ticket limits. In private, defendants acknowledge that their business
Speaker 1: model and bottom line benefit from brokers preventing ordinary Americans
Speaker 1: from purchasing tickets to the shows they want to see
Speaker 1: at the prices artists set unquote. The FDC also alleges
Speaker 1: that ticket Master is engaged in bait and switch tactics
Speaker 1: in which the company displays deceptively low ticket prices to
Speaker 1: consumers and ends up charging much more at checkout. And
Speaker 1: by the way, anyone who's ever bought tickets from Ticketmaster
Speaker 1: knows exactly what that's about. You look at the price
Speaker 1: of the tickets and you think, Okay, they're going to
Speaker 1: cost this. I'm gonna get two tickets. They're gonna cost this,
Speaker 1: probably some sort of extra fee involved, so it might
Speaker 1: be a little bit more. And then you get to
Speaker 1: check out and it turns out it's like, you know,
Speaker 1: you thought you were spending two hundred dollars on tickets,
Speaker 1: you're actually spending over three hundred dollars on tickets with
Speaker 1: all the fees and everything else. And is this fee
Speaker 1: and that fee and you know, anyway, so it says
Speaker 1: your Live. Nation announced in twenty twenty three that it
Speaker 1: was switching to an all in pricing model at its
Speaker 1: owned venues in the US, under which the final price,
Speaker 1: including fees but excluding sales taxes, is shown at the
Speaker 1: very beginning of the ticket percha process. CEO Michael Rapino
Speaker 1: has said that the switch to all in pricing has
Speaker 1: proven to be a success, and the company has backed
Speaker 1: efforts to make all in pricing the law. Despite this,
Speaker 1: the FTC alleges that quote, over the last decade, the
Speaker 1: first price the consumer has seen on Ticketmaster's platform has
Speaker 1: almost never been the price the consumer pays. According to
Speaker 1: internal Ticketmaster documents, the average percentage of fees charged on
Speaker 1: tickets ranges from twenty four to forty four percent of
Speaker 1: the total price. From twenty nineteen through twenty twenty four,
Speaker 1: consumers paid over sixteen point four billion in mandatory fees
Speaker 1: on ticket purchases from Ticketmaster unquote. That's from the complaint.
Speaker 1: The lawsuit is separate from the anti trust action which
Speaker 1: I think we talked about on the show before that
Speaker 1: the US Department of Justice launched against Ticketmaster and Live
Speaker 1: Nation in May of twenty twenty four. That lawsuit alleges
Speaker 1: that the company engaged in quote monopolization and other unlawful
Speaker 1: conduct that swarts competition in markets across the live entertainment
Speaker 1: industry unquote. The DOJ lawsuit is seeking to break up
Speaker 1: Live Nation and Ticketmaster, undoing a year's old agreement that
Speaker 1: allowed the two to merge despite concerns over the company
Speaker 1: potentially employing monopoly power in the live entertainment business. The
Speaker 1: DOJ has accused Live Nation of violating the terms of
Speaker 1: that agreement. In its lawsuit. The FTC says Live Nation
Speaker 1: slash Ticketmaster controls quote roughly eighty percent or more of
Speaker 1: major concert venues primary ticketing for concerts, and a growing
Speaker 1: share of ticket resales in the secondary market unquote. As
Speaker 1: of noon on Thursday, Live Nation shares were down three
Speaker 1: point six percent on the New York Stock Exchange, trending
Speaker 1: at around one hundred and sixty three dollars per year.
Speaker 1: So there you go. So that's the newest. And you know, look,
Speaker 1: I'm a I'm a free market capitalist, and and I
Speaker 1: think that, you know, I'm not into you know, the
Speaker 1: idea of the government coming in and controlling uh pricing
Speaker 1: for for concert tickets, certainly, but I'm also not in
Speaker 1: favor of you know, these companies being able to blatantly
Speaker 1: violate the law and slitch like baying switch, which is
Speaker 1: illegal obviously. And look, I mean, even if even if
Speaker 1: you're someone who takes the position that if you're if
Speaker 1: you're a true free market I mean I say free
Speaker 1: market capitalist, but I say that loosely because I do
Speaker 1: believe that government has to regulate some things, not to
Speaker 1: not to get in political because we don't do that
Speaker 1: on this version of the show. But even if you're
Speaker 1: someone who who thinks that all this is fine, because
Speaker 1: you don't think that, uh, the government should have anything
Speaker 1: to say about it, legally or otherwise, and the FTC
Speaker 1: shouldn't be getting into this. Even if you think that,
Speaker 1: don't you at least want to know as a consumer?
Speaker 1: Don't you want to know why ticket prices are so?
Speaker 1: I just as a consumer, isn't it good to be
Speaker 1: informed about it?
Speaker 2: But in the very least shouldn't I think there there's
Speaker 2: law involved in the fact that they shouldn't be able
Speaker 2: to violate their own rules, like you're not. The whole
Speaker 2: point of having these laws that you can't buy X
Speaker 2: number of tickets is to stop scalping, is to stop
Speaker 2: people getting ripped off. But if they make the rules
Speaker 2: and then they're sending it, selling it to themselves and
Speaker 2: then selling it to you, Yeah, this whole triple dip thing,
Speaker 2: like that's criminal. In my mind's eye, that's criminal.
Speaker 1: Well, there won't be any criminal, but there might be fines.
Speaker 1: But I mean Ticketmaster.
Speaker 2: That that's the other thing and the very least they
Speaker 2: should have to be it should at least be held
Speaker 2: accountable to their own rules and regulation.
Speaker 1: Yeah, absolutely so, So that's the newest wrinkle with that.
Speaker 2: Remember where else can you get a ticket? It's they
Speaker 2: have a monopoly on the market. It's it's very hard
Speaker 2: to get tickets to venues outside
Speaker 1: Of them, of course, of course, and it is a monopoly, absolutely,
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