Live Nation and Ticketmaster F*ckery | Matt Connarton Unleashed

0:00 Speaker 1: Events and ticket prices and you know, we actually we

0:02 Speaker 1: kind of mentioned that we didn't get into this part

0:04 Speaker 1: of it when we were talking to Charles about WWE

0:07 Speaker 1: and uh, you know how expensive it is with all

0:10 Speaker 1: the streaming services and everything, but also ticket price is

0:12 Speaker 1: very expensive. And of course when you buy tickets to

0:16 Speaker 1: go to a WW event, you're going to be buying

0:19 Speaker 1: them through you know, Live Nation slash Ticketmaster. There is

0:22 Speaker 1: some news now we've talked a lot about over the

0:25 Speaker 1: past couple of years on the show about tickets and

0:29 Speaker 1: ticket prices and and how you know, the monopoly that

0:33 Speaker 1: Live Nation has on ticket prices and how expensive it

0:36 Speaker 1: is getting has become uh to go see live shows.

0:40 Speaker 1: Digital Music News has a story up. Major law firms

0:43 Speaker 1: seek class certification in Live Nation Ticketmaster suit. Uh say,

0:48 Speaker 1: the companies used their decade plus monopoly to raise prices,

0:53 Speaker 1: and of course that is nothing new. Everybody in the

0:57 Speaker 1: industry knows that that goes on. It's very very difficult

1:00 Speaker 1: to compete with Live Nation slash Ticketmaster. You know, it's

1:04 Speaker 1: the same company. The two names are interchangeable, and when

1:07 Speaker 1: whenever anyone has tried, they haven't gotten very far. I

1:10 Speaker 1: still remember Jesus goes back a long time now. But

1:13 Speaker 1: remember when Pearl Jam tried it, yep, and they started

1:16 Speaker 1: working with I don't even remember the name of the

1:18 Speaker 1: company they were working with, but they started working with

1:19 Speaker 1: a different company I cannot remember.

1:22 Speaker 2: I can't remember either, but you know, and they.

1:24 Speaker 1: Went and they testified before Congress. A couple of the

1:26 Speaker 1: members testified before Congress about the matter. But the issue

1:31 Speaker 1: that they ran into was not only they tried to

1:35 Speaker 1: use a different ticketing service. Not only though does part

1:40 Speaker 1: of why Live Nation is able to maintain their stranglehold

1:44 Speaker 1: on all of this is because they don't just control

1:48 Speaker 1: the ticketing process, but they also control a lot of

1:52 Speaker 1: a lot of these buildings. So if you say, and

1:56 Speaker 1: by the way, this was pre merger, but if you

1:58 Speaker 1: are you know, even a band as popular as Pearl

2:01 Speaker 1: Jam at that time, you know this was back in

2:03 Speaker 1: the nineties when this happened. If you decide, you know,

2:06 Speaker 1: you're gonna flip the bird ticketmaster and say we're gonna

2:08 Speaker 1: do this without you, you've still got the problem of

2:11 Speaker 1: they not only control the ticketing process, they control the buildings.

2:15 Speaker 1: They have exclusive relationships with these promoters, or even if

2:19 Speaker 1: they don't have exclusive relationships on paper. You know, if

2:23 Speaker 1: you're a promoter, you do not want to do something

2:27 Speaker 1: that's going to anger this organization, in this case Ticketmaster,

2:31 Speaker 1: that you depend on, that you have to work with,

2:34 Speaker 1: by suddenly you're putting on shows working with this other company.

2:39 Speaker 1: So Pearl Jam ended up. They had to finally give up,

2:43 Speaker 1: They had to give up on the whole thing because

2:45 Speaker 1: and just go back to working with Ticketmaster because they

2:48 Speaker 1: were running into a problem. Not only was it you know,

2:53 Speaker 1: they're using this this small sort of upstart company to

2:57 Speaker 1: sell their tickets. But there's venue, there's all these venues

3:00 Speaker 1: they suddenly can't play yep, because Ticketmaster controls the venues.

3:05 Speaker 1: So it's very difficult to break this monopoly and to

3:09 Speaker 1: break through. So here's what's happening now. This is the latest.

3:13 Speaker 1: This story just went up yesterday on Digitalmusicnews dot com,

3:16 Speaker 1: which is a great site by the way, if you're

3:17 Speaker 1: interested in this subject or anything involving the music industry.

3:22 Speaker 1: Major law firms are once again pushing for class certification

3:25 Speaker 1: in a high stakes lawsuit centering on the alleged anti

3:28 Speaker 1: competitive business practices of Live Nation and its Ticketmaster's subsidiary.

3:34 Speaker 1: Let's see it says here attorneys with Quinn, Emanuel Urkhart

3:39 Speaker 1: and Sullivan. That's a mouthful as well as Keller Postman

3:45 Speaker 1: just recently asked the court for class certification in the complaint,

3:49 Speaker 1: which technically dates back to twenty twenty two. And I

3:52 Speaker 1: think we've talked about this case specifically on the show.

3:55 Speaker 1: So back in the twenty twenty two action, the plaintiffs

3:57 Speaker 1: maintained that Live Nation and ticket Mapas had since updated

4:02 Speaker 1: their arbitration agreement in ways that renders it unenforceable. Okay.

4:08 Speaker 1: Next part of this fast forward passed multiple twists and

4:11 Speaker 1: turns to October twenty twenty four, when the Ninth Circuit

4:15 Speaker 1: then upheld a District Court ruling rejecting Ticketmaster's attempt to

4:19 Speaker 1: compel arbitration via quote an arbitrator employed by a newly

4:23 Speaker 1: created entity, new era ADR using novel and unusual expedited

4:28 Speaker 1: mass arbitration procedures unquote, letting the October ruling summary take

4:32 Speaker 1: the wheel. In the interests of brevity, The relevant quote

4:37 Speaker 1: panel held that the delegation clause of the arbitration agreement

4:41 Speaker 1: and the arbitration agreement as a whole were unconscionable and

4:44 Speaker 1: unenforceable under California law unquote. For this will all make

4:49 Speaker 1: sense eventually, we just got to get to it. Okay.

4:52 Speaker 1: So for a company Live Nation in this case that's

4:54 Speaker 1: face and is facing a number of suits from ticked

4:57 Speaker 1: off consumers, the development was of course significant. The promoter

5:00 Speaker 1: moved forward with a Supreme Court petition as well, with

5:04 Speaker 1: Live Nation slash Ticketmaster lacking quote the shield of an

5:07 Speaker 1: enforceable arbitration agreement unquote. The Columbia Law Journal of the

5:10 Speaker 1: Arts summed up, quote, it seems the plaintiffs are free

5:12 Speaker 1: to bring their antitrust case unquote.

5:15 Speaker 3: So just to clarify for people too, a class certification

5:19 Speaker 3: is a legal step that comes before the actual class

5:24 Speaker 3: action lawsuit. It's when you go to court and you

5:27 Speaker 3: prove to the court that you've got numerous people, that

5:31 Speaker 3: there's commonality between it all, that there's adequate representation, that

5:35 Speaker 3: you meet all of the essential parts to go forward

5:38 Speaker 3: with a class astion lawsuit.

5:40 Speaker 2: So this is a critical for a.

5:41 Speaker 1: Step, right right, let's see. Okay, the next part of

5:49 Speaker 1: this enter the initially mentioned attempt to secure class certification

5:53 Speaker 1: with a related hearing schedule to take place on the

5:55 Speaker 1: morning of December fourth, so closer to the present. The

5:59 Speaker 1: filing largely recaps the alleged consumer harm resulting from the

6:05 Speaker 1: practices of Live Nation and Ticketmaster. Okay, this gets to

6:08 Speaker 1: the heart of the matter. Admittedly, as recent years have

6:12 Speaker 1: delivered more than a few qualms with and suits against

6:16 Speaker 1: the defendants, not to mention an ongoing doj antitrust action

6:20 Speaker 1: looking to split Ticketmaster from Live Nation, the underlying arguments

6:24 Speaker 1: don't exactly break new ground. The legal text reads, in

6:28 Speaker 1: part quote to backstop their exclusive dealing, defendants have leveraged

6:33 Speaker 1: their dominance in concert promotion to coerce venues. This is

6:38 Speaker 1: what I was referring to earlier. This is a problem

6:41 Speaker 1: Pearl Jam ran into to coerce venues into exclusive ticketing

6:45 Speaker 1: deals with Ticketmaster. Major venues rely on concert promoters to

6:51 Speaker 1: rent their space and sell tickets. Defendants exploit this dependence

6:56 Speaker 1: by tying Ticketmaster services to Live Nation promoted concerts. Unquote.

7:03 Speaker 1: I mean, look, let's call it what it is. They own.

7:06 Speaker 1: They own the concert industry. They own, they own.

7:10 Speaker 2: It, and that's the problem.

7:11 Speaker 3: Yeah, and then that translates into these enormous ticket prices.

7:17 Speaker 3: I mentioned it earlier. The artist young Blood. He there's

7:20 Speaker 3: an interview out there with him talking about how ridiculous

7:24 Speaker 3: prices are and how he was really freaked out when

7:27 Speaker 3: he found out that people who were getting up front

7:29 Speaker 3: were paying three hundred dollars a ticket to see him,

7:33 Speaker 3: and he thought that was really grotesque, and a lot

7:36 Speaker 3: of artists do. But they're stuck between a rock and

7:38 Speaker 3: a hard place. You want to go to, you want

7:41 Speaker 3: to do a concert, you gotta have a venue. And

7:43 Speaker 3: if the venues got the exclusivity contract with Ticketmaster to

7:47 Speaker 3: do all the ticket sales, you can't do anything.

7:50 Speaker 1: And even if there is no agreement, even if there

7:52 Speaker 1: is no exclusivity agreement, they're still going to lean on you, right,

7:56 Speaker 1: you know what I mean?

7:57 Speaker 3: And if that's where the venue's going anyway, like, that's

7:59 Speaker 3: where they're doing. And it probably is simplicity they have.

8:02 Speaker 3: It's easier to put a concert up and sell the

8:05 Speaker 3: tickets through them than it is for the individual venues

8:08 Speaker 3: to do it themselves, which requires more employees or what

8:11 Speaker 3: have you.

8:13 Speaker 2: So, yeah, they've used.

8:14 Speaker 3: To be venues told sold their own tickets years ago, Yeah,

8:19 Speaker 3: years and years ago. But now that's completely pretty much

8:22 Speaker 3: unheard of. You you got to go to a ticket

8:24 Speaker 3: math where else.

8:26 Speaker 2: Do you go to get a ticket?

8:27 Speaker 1: I mean for small for you know, if you're a

8:29 Speaker 1: small promoter like so for example, we were just talking

8:32 Speaker 1: about vices Fest. You know, you go to you go

8:34 Speaker 1: to the Vice's fest website and you can buy tickets,

8:37 Speaker 1: but you know through you know, because you do have

8:39 Speaker 1: services like event right and so forth. But but if

8:42 Speaker 1: you're you're.

8:43 Speaker 2: A venue that doesn't put a requirement on them.

8:46 Speaker 1: How the ticket right, it's the Strand and Dover. It's

8:49 Speaker 1: not a you know, it's not an arena. But if

8:51 Speaker 1: you're in an arena or even even a lot of theaters,

8:55 Speaker 1: you know, this is this is what you're dealing with.

8:58 Speaker 1: It says here. Ultimately, this will leed misconduct caused class members,

9:02 Speaker 1: those who bought tickets in or after twenty ten and

9:05 Speaker 1: therefore coughed up quote associated primary ticketing fees for an

9:09 Speaker 1: event at a major concert venue unquote, to pay more

9:12 Speaker 1: than they would have in a competitive market. Per the document,

9:16 Speaker 1: Live Nation and Ticketmaster quote used their decade plus monopoly

9:20 Speaker 1: to raise prices, stifle competition, and output into grade service

9:24 Speaker 1: quality by squashing rivals and innovation impacts that each class

9:29 Speaker 1: member felt. Unquote, The filing says.

9:32 Speaker 3: Can we say grow tesque greed again? It's the theme

9:35 Speaker 3: of the day. Oh yeah, oh yeah, grow test greed.

9:38 Speaker 3: That's what it like. They're not happy making money. They

9:40 Speaker 3: got to really take every dime out of the person's

9:43 Speaker 3: pocket that they can get. Well, it's it's sad, and

9:47 Speaker 3: it also disenfranchises so many people from being able to

9:50 Speaker 3: see artists. Because you get spent three hundred dollars on

9:53 Speaker 3: the ticket, it's going to cost you two hudred dollars

9:55 Speaker 3: for groceries for the week.

9:57 Speaker 1: So yeah, you.

9:58 Speaker 3: Don't really have three hundred discs laying around for the

10:01 Speaker 3: average joe, the average working man is getting the shaft

10:06 Speaker 3: on being able to go to concerts unless they play

10:08 Speaker 3: for nosebleeder seed. It's you know, you get your fifty

10:11 Speaker 3: bucks set up in the mesona behind a pole.

10:14 Speaker 2: You can't see anything, but you can hear it.

10:16 Speaker 3: Right, Yeah, it's not about quality for the customer anymore,

10:22 Speaker 3: is it.

10:23 Speaker 1: It also says here it'll be worth noting. I'm sorry,

10:25 Speaker 1: it'll be worth tracking the push for class certification moving forward.

10:28 Speaker 1: Right now, Discovery is ongoing, and the plaintiff's council reiterated

10:31 Speaker 1: plans to prove their arguments with, among other things, testimony

10:35 Speaker 1: from Live Nation, Ticketmaster competitors, and market participants to boot.

10:40 Speaker 1: So that is from Digitalmusic News dot com. So that's

10:45 Speaker 1: where that stands. But there's another element here. This is

10:48 Speaker 1: from hypebot dot com, another site that has a lot

10:52 Speaker 1: of industry related news on it that's very interesting. So

10:56 Speaker 1: and this just went up. This just went up a

11:00 Speaker 1: last couple of days. Could state attorneys general use RICO

11:06 Speaker 1: to stop ticket scalpers and bots? Now the reason so

11:10 Speaker 1: part of what and the other article didn't get into

11:12 Speaker 1: this part of it, but part of what is so

11:14 Speaker 1: in city and we've talked about this on the show.

11:15 Speaker 1: Part of what is so insidious about the ticketing business

11:18 Speaker 1: is how is the secondary market and how so? And

11:24 Speaker 1: there's multi levels to this, but part of how that

11:28 Speaker 1: works is scalpers buy up these tickets and then resell

11:33 Speaker 1: them on their own sites ridiculous prices, right right, So

11:38 Speaker 1: so now you can't get so now the show has

11:40 Speaker 1: sold out through Ticketmaster, but now you can get it

11:44 Speaker 1: at a much higher price on one of these secondary sites.

11:47 Speaker 1: But here's the Kicker. Some of these secondary sites are

11:50 Speaker 1: literally they're actually owned by Live Nation.

11:53 Speaker 2: Stop it really.

11:54 Speaker 1: Yeah, we've talked about that on the show before. Oh yeah, yeah,

11:58 Speaker 1: that's how How is that legal? That's how much they've

12:01 Speaker 1: rigged the game. Legal, you know, until the Justice Department

12:05 Speaker 1: says they can't do it anymore. No, it's it's all.

12:09 Speaker 1: It's all legal, at least for now. So this story

12:14 Speaker 1: is also interesting because it talks about scalpers and bots.

12:17 Speaker 1: So again this is from Hypebot. The Federal Trade Commission

12:20 Speaker 1: has filed the lawsuit in federal court in Maryland against

12:26 Speaker 1: Key Investment Group, a ticket reseller operating under names like

12:32 Speaker 1: epic Seats, total tickets dot Com, and totally Ticks. The

12:36 Speaker 1: FTC alleges that between November one, twenty twenty two, and

12:40 Speaker 1: December thirtieth, twenty twenty three, the company used thousands of

12:45 Speaker 1: fictitious or purchased Ticketmaster accounts, along with spoofed IP addresses,

12:52 Speaker 1: proxy networks, virtual credit cards, and simbach setups to evade

12:58 Speaker 1: purchasing limits on high demand events including and we definitely

13:03 Speaker 1: talked about this, including Taylor Swift's Eras tour. Oh yeah,

13:08 Speaker 1: remember all the contro now yep, yep. All together, the

13:13 Speaker 1: defendants purchased three hundred seventy nine thousand, seven hundred and

13:18 Speaker 1: seventy six tickets at a cost of nearly fifty seven million,

13:23 Speaker 1: reselling many for approximately sixty four million. Notably, two hundred

13:28 Speaker 1: seventy three tickets for one Swift concert were acquired via

13:32 Speaker 1: forty nine different accounts, far exceeding the sixth ticket per

13:37 Speaker 1: event limit. And by the way, just some quick math.

13:40 Speaker 1: I'm not good at math, but that's that's what a

13:43 Speaker 1: seven million dollar profit.

13:44 Speaker 2: Us ruin music for everybody else.

13:48 Speaker 1: Yep. The FTC alleges violations of both the Better Online

13:54 Speaker 1: Ticket Sales Act or BOTS, which prohibits circumventing online ticket controls,

14:00 Speaker 1: and the broader FTC Act, prohibiting unfair or deceptive business practices.

14:06 Speaker 1: Key Investment Group's defenses are likely to be that the

14:08 Speaker 1: company employs human buyers, not bots, and therefore the FDC

14:13 Speaker 1: is misapplying the BOTS Act, and that the lawsuit risks

14:16 Speaker 1: dismantling the secondary ticket market and ending competition, benefiting only

14:21 Speaker 1: major corporate players. Now so I'm guessing then, So what

14:27 Speaker 1: that means is so Key Investments Group defense will be Well,

14:32 Speaker 1: you know these fictitious accounts, these are actual human beings

14:36 Speaker 1: operating the fictitious accounts, therefore is not covered by the

14:39 Speaker 1: Bots Act. That'll be their defense. Let's see the loophole. Yeah,

14:45 Speaker 1: a loophole exactly. The case is part of an expanded

14:48 Speaker 1: federal court federal effort rather spurred by an executive order

14:52 Speaker 1: from March twenty twenty five, issued after President Trump met

14:56 Speaker 1: with kid Rock to promote transparency and fairness and ticket

14:59 Speaker 1: resale markets and to curb predatory resale tactics. Well, that's

15:03 Speaker 1: something I support, blind dog, that's right. The FTC's action

15:07 Speaker 1: reflects growing regulatory scrutiny of ticketing practices that disadvantages ordinary

15:13 Speaker 1: consumers at both the federal and state levels. Recall that

15:17 Speaker 1: the authors of the Obama era Bots Act were recently

15:21 Speaker 1: complaining that the FTC had rarely enforced that law. It

15:25 Speaker 1: seems unlikely that the FTC's enforcement action against Key Investment

15:29 Speaker 1: Group would have occurred without the broader policy momentum catalyzed

15:33 Speaker 1: by President Trump's executive order targeting ticket scalping and abusive

15:37 Speaker 1: resale practices. That order directed federal agencies, including the FTCNDJ,

15:42 Speaker 1: to prioritize investigations and enforcement actions addressing deceptive or anti

15:47 Speaker 1: competitive conduct in the live events and ticketing industries. The

15:51 Speaker 1: executive like what you said about a blind dog or

15:54 Speaker 1: a broken clock. The executive order was followed by public

15:57 Speaker 1: consultation processes jointly initiated by the DOJ and FTC to

16:02 Speaker 1: gather information on how ticket resellers were impacting consumer access

16:05 Speaker 1: and market fairness. These actions created a clear regulatory mandate

16:10 Speaker 1: to pursue high profile investigations like the one brought against

16:13 Speaker 1: Key Investment Group. I don't know if we have time

16:18 Speaker 1: to get through all of this just a little bit more.

16:20 Speaker 1: We don't have to think to go through the whole thing.

16:22 Speaker 1: But so the elements of a recocase, So how does

16:24 Speaker 1: this become a recocase racketeering? If the FTC case sounds

16:30 Speaker 1: like racketeering, that's because it is. To make a reco case,

16:36 Speaker 1: Federal or state prosecutors must show one enterprise a structured

16:41 Speaker 1: association formal or informal, two pattern of racketeering activity. At

16:47 Speaker 1: least two participate I'm sorry, at least two predicate crimes

16:51 Speaker 1: within ten years. Three predicate acts crimes like wire fraud,

16:56 Speaker 1: mail fraud, computer fraud, access device fraud, or identify theft,

17:00 Speaker 1: and for continuity conduct that is ongoing or opposes a

17:05 Speaker 1: threat of continuing harm. The FDC's complaint practically hands this

17:10 Speaker 1: up on a silver platter, multiple interlocking LLCs. You've got

17:15 Speaker 1: Key Investment Group, Total Tickets, dot Com totally takes front

17:18 Speaker 1: Rows Tickets, Wlke Investments plus individual managers provide the enterprise.

17:24 Speaker 1: The use of fake accounts, bots and deceptive transactions can

17:27 Speaker 1: likely be recast as wire fraud and computer fraud. The

17:33 Speaker 1: classic reco predicates and the continuity is obvious. The complaint

17:38 Speaker 1: says the conduct has persisted from twenty sixteen through today,

17:44 Speaker 1: So I'm going to kind of skip down here because

17:51 Speaker 1: we're running out of time. The FDC's complaint seeks civil

17:55 Speaker 1: penalties and injunctions, but a state recoaction could carry treble damages,

17:59 Speaker 1: asset for four orfeitures, and potentially criminal exposure. That shift

18:03 Speaker 1: in remedies would change the incentives dramatically for defendants who

18:06 Speaker 1: have so far treated civil finds as a cost of

18:09 Speaker 1: doing business, and beyond punishment, it would send a signal

18:13 Speaker 1: ticket Bodying isn't just unfair, it's racketeering. So there's more

18:18 Speaker 1: to the article. We don't have time to get through

18:19 Speaker 1: the rest of it, but I encourage you to check

18:21 Speaker 1: out hypebot dot com. Very interesting. And that is, by

18:24 Speaker 1: the way, how a lot of businesses get around things.

18:26 Speaker 1: Like you know, if something is is uh illegal but

18:32 Speaker 1: not necessarily a crime, but just there are potential fines involved. Yeah,

18:40 Speaker 1: you can say, okay, well that's the cost of doing

18:42 Speaker 1: business if I have to pay this fine, but the

18:45 Speaker 1: fine is well, that's the thing, but like a tax

18:49 Speaker 1: to them exactly. If the fine is say, okay, I

18:52 Speaker 1: got to pay this two hundred thousand dollars fine, but

18:55 Speaker 1: I made this but I made seven million on the transaction.

18:58 Speaker 2: Who cares I've paid it?

19:00 Speaker 1: Goss of doing business exactly, coss of doing business.

19:03 Speaker 2: That's so terrible.

19:04 Speaker 3: So on that note, it's the all these subsidiaries, it's

19:07 Speaker 3: all the different versions of themselves.

19:09 Speaker 1: Yes, yeah, exactly exactly.

19:11 Speaker 2: And healthcare does the same thing.

19:13 Speaker 1: Yeah, there you go, there you go.