FTC vs. Live Nation | Matt Connarton Unleashed

0:00 Speaker 1: We have a little bit of time, I want to

0:01 Speaker 1: get in a music news story. You know, we do

0:04 Speaker 1: like to cover if we have a little bit of

0:06 Speaker 1: time in the show. Some weeks, we'll cover some music

0:09 Speaker 1: industry news going on, especially with the audience we have.

0:12 Speaker 1: We know a lot of musicians listen to the show,

0:13 Speaker 1: a lot of industry people, and I happen to see

0:15 Speaker 1: this pop up. And this relates to a subject that

0:18 Speaker 1: comes up often on the show, and that is Live

0:21 Speaker 1: Nation and it's a ticketing arm ticket Master. It's the

0:24 Speaker 1: same company. If you didn't know Live Nation and Ticketmaster,

0:27 Speaker 1: they are interchangeable, kind of like Comcasts and Exfinity. You

0:30 Speaker 1: can say either one and it's the same company.

0:32 Speaker 2: But again Healthcare Optum owned by the same people. Yeah,

0:35 Speaker 2: everybody's good, Like businesses have like a ton of these days,

0:39 Speaker 2: but it is kind of hard to keep track of

0:40 Speaker 2: the subsidiaries.

0:42 Speaker 1: This is from Music Business Worldwide dot Com And I

0:44 Speaker 1: didn't realize this until this morning, but this just happened.

0:47 Speaker 1: A couple days ago. Live Nation and Ticketmaster sued by

0:51 Speaker 1: the Federal Trade Commission over alleged illegal ticket resale tactics.

0:57 Speaker 1: Because something that we've talked about on the show whenever

0:59 Speaker 1: we talk about Live Nation and Ticketmaster is how you know,

1:03 Speaker 1: because obviously over the years, ticket prices keep going up

1:07 Speaker 1: and up and up, long before there was any hint

1:10 Speaker 1: of severe inflation in the economy, just completely separate from

1:13 Speaker 1: all that, you know, and people feel, people feel gouged,

1:16 Speaker 1: and it gets so expensive. And one of the things

1:18 Speaker 1: that goes on is, you know, we've talked on the

1:22 Speaker 1: show about how these small companies that are effectively ticket

1:26 Speaker 1: scalpers will buy up as soon as Live Nation puts

1:29 Speaker 1: a show on sale, they'll buy up a bunch of

1:30 Speaker 1: tickets and they'll resell them on their own sites at

1:35 Speaker 1: a higher price, especially once Live Nation Ticketmaster runs out

1:39 Speaker 1: of the tickets. But a lot of them have been

1:42 Speaker 1: bought up by scalpers who then resell them. But what

1:44 Speaker 1: a lot of people don't know is some of these

1:46 Speaker 1: companies that are doing that are actually owned to buy

1:49 Speaker 1: ticket Master. So Ticketmaster sells tickets to these own to

1:55 Speaker 1: their own yeah, to themselves effectively, and use this system

1:59 Speaker 1: to jack up the prices. Yeah, most people don't realize.

2:02 Speaker 2: I know about scalpers, and I've always thought that these

2:05 Speaker 2: companies are supposed to have safeguards and please stop all

2:09 Speaker 2: of that. Yeah, so I will say that, not that

2:12 Speaker 2: I'm totally surprised, but heck wow.

2:15 Speaker 1: Yeah, it's a dirty, dirty business.

2:18 Speaker 2: And then selling them back to you for triple the cost.

2:21 Speaker 1: So yeah, So here's the story. This is again, this

2:25 Speaker 1: is from Music Business Worldwide dot Com. The Federal Trade

2:28 Speaker 1: Commission has sued Live Nation and its ticketing arm Ticketmaster,

2:32 Speaker 1: accusing the company of profiting from scalpers operating on its platform.

2:37 Speaker 1: In a complaint filed on Thursday, September eighteenth and the

2:41 Speaker 1: US District Court for the Central District of California, The

2:44 Speaker 1: FTC accused Ticketmaster of failing to uphold its own ticket

2:48 Speaker 1: purchase limits, in effect allowing scale, in effect allowing scalpers

2:55 Speaker 1: to buy up large numbers of tickets and to resell

2:58 Speaker 1: them on the secondary market at markups. So the secondary market,

3:03 Speaker 1: that's these you know, it's them Joe's Tickets dot com

3:09 Speaker 1: or whatever. Yeah, you know.

3:11 Speaker 2: It's only three yeah, yeah, they buy all the tickets

3:15 Speaker 2: and then if you really want to go, Yeah, the

3:18 Speaker 2: only way to go is to pay those guys.

3:19 Speaker 1: And that's why Ticketmaster limits how many tickets you can buy.

3:23 Speaker 1: It once except except they don't actually do it for themselves. Apparently.

3:27 Speaker 1: The FTC says Ticketmaster is motivated to do this because

3:30 Speaker 1: it makes additional fees on the tickets resale. Ticketmaster can

3:35 Speaker 1: triple dip on fees, collecting fees from one brokers when

3:40 Speaker 1: they purchase the tickets on the primary market, two brokers

3:45 Speaker 1: again when Ticketmaster sells their tickets on Ticketmaster's secondary market,

3:50 Speaker 1: and finally three consumers who purchase tickets from Ticketmaster on

3:56 Speaker 1: its secondary market. Unquote, says the complaint. Joining the FTC

4:02 Speaker 1: in the lawsuit are the district attorneys of seven states, Colorado, Florida, Illinois, Nebraska, Tennessee, Utah,

4:10 Speaker 1: and Virginia. The complaint alleges that Ticketmaster violated the Bots

4:16 Speaker 1: Act bots. The Bots Act, the twenty sixteen law forbidding

4:21 Speaker 1: the use of bots to buy tickets in online stores.

4:25 Speaker 1: Live Nation has in the past supported the Bots Act,

4:29 Speaker 1: or at least you know, on the public Publicly. The

4:34 Speaker 1: FTC notes that Live Nation's policy is to allow artists

4:37 Speaker 1: to sell to set ticket purchase limits themselves, but quote

4:42 Speaker 1: in private, defendants have tacitly worked with these very same scalpers,

4:48 Speaker 1: allowing them to unlawfully purchase millions of dollars in tickets

4:52 Speaker 1: in the primary market so that defendants can extract more

4:56 Speaker 1: profit for themselves when reselling those tickets on the secondary

5:00 Speaker 1: market unquote.

5:02 Speaker 2: Rotest created what ruins the world.

5:04 Speaker 1: The FTC alleges that Ticketmaster has been aware for years

5:08 Speaker 1: that certain ticket buyers have violated the limit and turned

5:11 Speaker 1: a blind eye to the practice. The complaint states that

5:15 Speaker 1: in twenty eighteen, Ticketmaster identified five ticket brokers who controlled

5:21 Speaker 1: six three hundred forty five ticket Master accounts and possessed

5:25 Speaker 1: more than two hundred forty six thousands I'm sorry, two

5:28 Speaker 1: hundred forty six thousand tickets to nearly twenty six hundred

5:32 Speaker 1: events Jesus FTC complaint against Live Nation. Okay, so oh,

5:38 Speaker 1: we have to.

5:38 Speaker 2: Have the ticket prices up so high.

5:41 Speaker 1: So, the complaint states quote. In public, defendants maintain that

5:45 Speaker 1: their business model is at odds with brokers that routinely

5:48 Speaker 1: exceed ticket limits. In private, defendants acknowledge that their business

5:53 Speaker 1: model and bottom line benefit from brokers preventing ordinary Americans

5:57 Speaker 1: from purchasing tickets to the shows they want to see

6:00 Speaker 1: at the prices artists set unquote. The FDC also alleges

6:05 Speaker 1: that ticket Master is engaged in bait and switch tactics

6:09 Speaker 1: in which the company displays deceptively low ticket prices to

6:14 Speaker 1: consumers and ends up charging much more at checkout. And

6:18 Speaker 1: by the way, anyone who's ever bought tickets from Ticketmaster

6:20 Speaker 1: knows exactly what that's about. You look at the price

6:23 Speaker 1: of the tickets and you think, Okay, they're going to

6:25 Speaker 1: cost this. I'm gonna get two tickets. They're gonna cost this,

6:27 Speaker 1: probably some sort of extra fee involved, so it might

6:30 Speaker 1: be a little bit more. And then you get to

6:31 Speaker 1: check out and it turns out it's like, you know,

6:34 Speaker 1: you thought you were spending two hundred dollars on tickets,

6:36 Speaker 1: you're actually spending over three hundred dollars on tickets with

6:39 Speaker 1: all the fees and everything else. And is this fee

6:42 Speaker 1: and that fee and you know, anyway, so it says

6:45 Speaker 1: your Live. Nation announced in twenty twenty three that it

6:48 Speaker 1: was switching to an all in pricing model at its

6:51 Speaker 1: owned venues in the US, under which the final price,

6:54 Speaker 1: including fees but excluding sales taxes, is shown at the

6:58 Speaker 1: very beginning of the ticket percha process. CEO Michael Rapino

7:02 Speaker 1: has said that the switch to all in pricing has

7:05 Speaker 1: proven to be a success, and the company has backed

7:07 Speaker 1: efforts to make all in pricing the law. Despite this,

7:13 Speaker 1: the FTC alleges that quote, over the last decade, the

7:16 Speaker 1: first price the consumer has seen on Ticketmaster's platform has

7:20 Speaker 1: almost never been the price the consumer pays. According to

7:23 Speaker 1: internal Ticketmaster documents, the average percentage of fees charged on

7:27 Speaker 1: tickets ranges from twenty four to forty four percent of

7:31 Speaker 1: the total price. From twenty nineteen through twenty twenty four,

7:34 Speaker 1: consumers paid over sixteen point four billion in mandatory fees

7:39 Speaker 1: on ticket purchases from Ticketmaster unquote. That's from the complaint.

7:44 Speaker 1: The lawsuit is separate from the anti trust action which

7:48 Speaker 1: I think we talked about on the show before that

7:51 Speaker 1: the US Department of Justice launched against Ticketmaster and Live

7:54 Speaker 1: Nation in May of twenty twenty four. That lawsuit alleges

7:58 Speaker 1: that the company engaged in quote monopolization and other unlawful

8:02 Speaker 1: conduct that swarts competition in markets across the live entertainment

8:06 Speaker 1: industry unquote. The DOJ lawsuit is seeking to break up

8:10 Speaker 1: Live Nation and Ticketmaster, undoing a year's old agreement that

8:14 Speaker 1: allowed the two to merge despite concerns over the company

8:17 Speaker 1: potentially employing monopoly power in the live entertainment business. The

8:20 Speaker 1: DOJ has accused Live Nation of violating the terms of

8:23 Speaker 1: that agreement. In its lawsuit. The FTC says Live Nation

8:27 Speaker 1: slash Ticketmaster controls quote roughly eighty percent or more of

8:32 Speaker 1: major concert venues primary ticketing for concerts, and a growing

8:37 Speaker 1: share of ticket resales in the secondary market unquote. As

8:41 Speaker 1: of noon on Thursday, Live Nation shares were down three

8:44 Speaker 1: point six percent on the New York Stock Exchange, trending

8:47 Speaker 1: at around one hundred and sixty three dollars per year.

8:50 Speaker 1: So there you go. So that's the newest. And you know, look,

8:56 Speaker 1: I'm a I'm a free market capitalist, and and I

9:00 Speaker 1: think that, you know, I'm not into you know, the

9:04 Speaker 1: idea of the government coming in and controlling uh pricing

9:07 Speaker 1: for for concert tickets, certainly, but I'm also not in

9:11 Speaker 1: favor of you know, these companies being able to blatantly

9:15 Speaker 1: violate the law and slitch like baying switch, which is

9:19 Speaker 1: illegal obviously. And look, I mean, even if even if

9:23 Speaker 1: you're someone who takes the position that if you're if

9:27 Speaker 1: you're a true free market I mean I say free

9:29 Speaker 1: market capitalist, but I say that loosely because I do

9:32 Speaker 1: believe that government has to regulate some things, not to

9:36 Speaker 1: not to get in political because we don't do that

9:38 Speaker 1: on this version of the show. But even if you're

9:39 Speaker 1: someone who who thinks that all this is fine, because

9:43 Speaker 1: you don't think that, uh, the government should have anything

9:46 Speaker 1: to say about it, legally or otherwise, and the FTC

9:48 Speaker 1: shouldn't be getting into this. Even if you think that,

9:50 Speaker 1: don't you at least want to know as a consumer?

9:53 Speaker 1: Don't you want to know why ticket prices are so?

9:57 Speaker 1: I just as a consumer, isn't it good to be

9:58 Speaker 1: informed about it?

10:00 Speaker 2: But in the very least shouldn't I think there there's

10:05 Speaker 2: law involved in the fact that they shouldn't be able

10:08 Speaker 2: to violate their own rules, like you're not. The whole

10:11 Speaker 2: point of having these laws that you can't buy X

10:13 Speaker 2: number of tickets is to stop scalping, is to stop

10:17 Speaker 2: people getting ripped off. But if they make the rules

10:20 Speaker 2: and then they're sending it, selling it to themselves and

10:24 Speaker 2: then selling it to you, Yeah, this whole triple dip thing,

10:27 Speaker 2: like that's criminal. In my mind's eye, that's criminal.

10:31 Speaker 1: Well, there won't be any criminal, but there might be fines.

10:36 Speaker 1: But I mean Ticketmaster.

10:38 Speaker 2: That that's the other thing and the very least they

10:39 Speaker 2: should have to be it should at least be held

10:41 Speaker 2: accountable to their own rules and regulation.

10:43 Speaker 1: Yeah, absolutely so, So that's the newest wrinkle with that.

10:48 Speaker 2: Remember where else can you get a ticket? It's they

10:50 Speaker 2: have a monopoly on the market. It's it's very hard

10:54 Speaker 2: to get tickets to venues outside

10:56 Speaker 1: Of them, of course, of course, and it is a monopoly, absolutely,