Recently, 50 members of the U.S. House of Representatives lent their signatures to a letter sent to Assistant Attorney General Christine A. Varney imploring the U.S. Department of Justice to halt the Live Nation/Ticketmaster merger.
“This shows the profound level of concerns over the antitrust effects of the Ticketmaster-Live Nation merger. To get 50 signatures is stunning, almost unprecedented,” said Washington, D.C.-based attorney David Balto.
The letter is the result of the efforts of U.S. Representative Bill Pascrell, Jr., a democrat from New Jersey. In June, Pascrell introduced a bill nicknamed the BOSS Act (Better Oversight of Secondary Sales and Accountability in Concert Ticketing Act). He named it after Bruce Springsteen.
Critics of Ticketmaster have been rallying around Springsteen since February of this year. That’s when his fans, trying to buy tickets to one of his shows, were redirected away from Ticketmaster’s website to the website of their subsidiary, TicketsNow, a ticket reseller.
On TicketsNow, ducats to see “The Boss” were selling for hundreds of dollars more than face value price. The incident sparked outrage among consumers and attracted the attention of both the New Jersey Attorney General’s office and national lawmakers.
Not to be outdone, the U.S. Senate is also getting into the act. In late July Senator Herb Kohl, a democrat from Wisconsin, sent his own letter to Varney.
“I believe this proposed merger presents serious competition concerns which should be reviewed carefully by the Antitrust Division, and that the Justice Department should approve this deal only if it finds that it likely will not substantially reduce competition in the concert ticketing and promotion markets,” wrote the Senator.
In an era of economic distress, terrorism, porous borders and other pressing national concerns congress seems to be tripping over themselves to deride a merger between two companies in the concert industry. That’s not to say anti-trust laws are unimportant, but ultimately this whole debate is about saving a couple of bucks on concert tickets—not exactly a vital necessity.
However, joining the fight against the merger is a great way to get your name in the paper and to be on the same side of an issue with a universally beloved rock star like Bruce Springsteen. Not only that, but Ticketmaster is one of the most vilified companies in America and no elected officials will lose votes haranguing them in public.
To be fair, the lawmakers have touched on the complex issues surrounding the merger. They mentioned “vertically integrated entity,” “reduce horizontal competition,” and other such wonky terms. They raised concerns about the future of independent promoters and other small businesses within the concert industry. Kohl even goes so far as to argue that the Live Nation/Ticketmaster merger will hurt the secondary ticket market.
While these are great talking points, politicians wouldn’t even be discussing this merger if the public didn’t already hate Ticketmaster and their fees.
Thanks to congressional hearings we now know these fees are actually part of the ticket price and imposed by the artist. From the hours of testimony from pundits, critics and proponents concerning the merger it’s been revealed that most of Ticketmaster’s faults actually belong to the artist and/or the promoter.
Besides looking good in the public’s eye for fighting the “evil” Ticketmaster, this issue is also being politicized.
“Under the Bush Administration, the Justice Department’s enforcement of our country’s antitrust laws was almost nonexistent,” Pascrell wrote in his letter.
Not only are politicians using the Live Nation/Ticketmaster merger for publicity but they’re also using it to show how “tough” the Obama administration is on those big bad corporations.
That’s why lawmakers’ vocal opposition to this merger seems quite disingenuous. It’s a safe and easy way for them to score points with consumers on a superfluous yet passionate issue replete with a bona fide villain.
While congress spreads fear and panic over higher ticket prices they never mention what may or may not happen to the stock prices of these companies if the merger is approved or rejected (a merger between two rather underperforming companies).
The stock prices of these companies will affect more consumers to a much greater degree than a few dollars tacked onto a ticket. But being on the side of Wall Street nowadays is not exactly a great way to earn popularity points.
While lawmakers have worried what this merger will do to the secondary ticket market, their concerns are nowhere near the top of their list of grievances. In reality, it should be their main concern.
Loss of the secondary ticket market means the elimination of hundreds of small businesses that make up the resell industry. In other words, it will be to the detriment to the exact entity most of these politicians say they champion. Yet, since resellers aren’t exactly fan favorites it’s not advantageous for lawmakers to defend them.
Fans and politicians deride the cost of concert tickets but artists like U2 and Bruce Springsteen are still selling out venues. It’s not like they are playing to half full stadiums or empty arenas.
It’s odd how congress argues for vertical and horizontal competition in an industry where there is really no competition. There’s only one U2. There’s no “other U2.” There’s no “U2 West” or “U2 Lite.” If you want to see U2 live you’ll have to pay what they charge.
Most people know exactly how much they are willing to spend to see U2 perform in concert. Unfortunately for those fans so does U2, their promoters and Ticketmaster.
Mark Anderson is a writer for AuthorityTickets, a secondary ticket market Web site that offers original commentary and information on the event ticket industry. Mark is a professional sports and entertainment writer who also regularly contributes to the ClickitTicket blog, a place that offers current, original concerts tour, theater and sports articles.
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I can’t figure out what the point of this article is. Mr. Anderson seems to be championing some path which would save the secondary ticket market (presumably so he can continue to write about it). He appears to be making the case that opposition to the merger is all a big political publicity stunt and that the overall effect will do something to stock prices and ticket prices but he’s unclear on what these effects will be and is less clear on whether he thinks they are positive or negative. He’s either saying “Let the merger go through, it will be good for the secondary market” or maybe “Stop the merger but only to save the secondary market as nothing else really matters” — but who knows.
The only thing clear is that inefficiency in pricing is what creates the secondary market. Careful observers know that there’s a tension between artists, ticketers and promoters over pricing that creates this inefficiency. If you’re in the secondary market, I’d argue that this merger is not a good thing — the integration will lead to greater collaboration in pricing and technologies among the primary players that will put the squeeze on the secondary market. If Mr. Anderson is interested in saving his job, he’d better figure out which side of the fence he’s on and start working to shore it up.
I think the point of this article was to go over some of the main points of the Ticketmaster/Live Nation merger and the way in which politicians are handling it. And the secondary ticket market, stock holders and consumers were mentioned because they relate to the possible merger and will be affected by it.
By what you wrote, it seems like you assumed there had to be a secodnary ticket market angle or purpose in the author’s mind and so when you didn’t find it, you said there was no point.
And when you wrote “The only thing clear is that inefficiency in pricing is what creates the secondary market. Careful observers know that there’s a tension between artists, ticketers and promoters over pricing that creates this inefficiency.” you sound as that opinion was actual fact. It is not. That’s not what ‘creates’ the secondary ticket market. Capitalism and supply and demand create it. Supply and demand is one of the main things that drive the ticket prices up.
Sorry, but the article is difficult to interpret as the author makes no clear opening thesis or conclusion. If, as you say, the article wasn’t intended to have a point but was really just a list of various points then my apologies to the author for trying to ferret out a point.
I don’t know what you mean when you say “capitalism and supply and demand create” the secondary market. Certainly the primary market and its pricing must have something to do with it, right? That’s why there’s not a big secondary market in books or televisions — retailers get the pricing right to start with. At any rate, it is a much studied subject and here’s a link to an interesting abstract of a lecture delivered recently at NASSM: http://www.nassm.com/files/conf_abstracts/2009-050.pdf if you’re interested.
You make some extremely valid points but I don’t see the big picture of what you’re trying to get at… perhaps…
“That’s why lawmakers’ vocal opposition to this merger seems quite disingenuous. It’s a safe and easy way for them to score points with consumers on a superfluous yet passionate issue replete with a bona fide villain.”
People from New Jersey are RIDICULOUS… I cannot believe no one paid attention to the fact that Bruce & his manager were caught red handed for holding thousands of tickets back that, I’m 100% positive, some of which would make their way back to the 2ndary ticketing market.
I think the article proves again that it’s only a dirty business when shows sell out. It’s a lot like politics!
I believe that the authors only intent was to say that lawmakers:
1) should be worried about things more important than the ticketing/concert industry
2) the issues with the merger that they are focusing on aren’t even the right ones
I disagree with the opinion that “pricing inefficiency” creates the secondary market. Maybe in some extent, for one time or rare events like concerts, but NOT for sports. Even for concerts, there is the matter of demand fluctuating after some – or all – tickets are bought (e.g., a band becomes more popular, releasing a new hit; a scandal hurts the performers popularity, etc.).
However, for sports, it’s a completely different ball game (no pun intended, well, maybe just a little…) Teams generally have a small sales and marketing staff. It’s beneficial for them to sell season tickets for a lower price and not have to worry about single game sales. So, in that case, the secondary market essentially becomes a “commissioned” sales staff where the sales staff purchases the product up front – a pretty good deal for the team. Second, teams want their arena filled whether they win a championship or are in last place. If a team treats their fans well by not charging too much for tickets during “good times”, they’ll have a better chance of keeping their fans during a last place season.
In this light, you can look at secondary ticket sellers like a bookstore or appliance store. The publishers and manufacturers seldomly sell their product directly to a consumer, instead they sell them to a store (Barnes & Noble, Best Buy) who then sells them to the end user.