Mark J. Perry, an economist and professor emeritus at the University of Michigan, published an Op-Ed in The Hill this week, calling on President Joe Biden to focus on Live Nation Entertainment as part of its efforts to battle monopolistic companies. The author, who is a senior fellow at the American Enterprise Institute, pulled no punches in his analysis of the entertainment giant, which is often accused of anti-competitive behavior.

“The reality is that there are many things broken when it comes to live event ticketing,” Perry writes in his opening paragraph. “And it’s only going to get worse unless Washington lawmakers and regulators step in with a fix.”

The fix, he argues, is for the president to include Live Nation and the live event ticketing industry in its efforts to promote competition in the American economy – announced in July. The argument is fairly simple – in the announcement of the executive order, Biden laments the fact that in more than 75% of U.S. industries, “a smaller number of large companies now control more of the business than they did 20 years ago.” This lack of competition drives up prices for consumers, and stifles innovation. The order already includes actions designed to help consumers in one facet of ticketing – for air travel – requiring “clear upfront disclosure of add-on fees” as well as rules regarding refunds.

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This article is not the first time Perry has argued that anti-trust efforts should be undertaken against the California-based Live Nation “monopoly”. He argued in favor of Congress passing the BOSS Act in February 2020, following the Department of Justice taking action over repeated violations of a 2010 consent decree in late 2019.

In this new peice, Perry points out that Live Nation enjoys an estimated 70% market share in the United States, providing ticket distribution for some 80 percent of stadiums and arenas. It agreed to a the previously mentioned consent decree as a part of the 2010 approval of its Ticketmaster merger – notably undertaken by the previous Democrat-led presidential administration of Barack Obama, which featured Biden as its Vice President – but faced numerous allegations of violating that decree while ruthlessly growing its market share: “Live Nation remains capable of strong-arming venues with the threat of starving them and their fans of popular concerts,” he says.

It’s not a theoretical concern. In a 2019 court filing, Justice Department officials said they had identified numerous instances where Live Nation threatened venues with making access to concerts a condition of a Ticketmaster deal, and other instances where Live Nation “retaliated against venues by withholding live entertainment events because the venue chose not to contract with Ticketmaster.” A settlement included a fine, the appointment of an independent monitor to investigate and report on Live Nation’s behavior, and a five-year extension to the merger consent agreement. Let’s face it; companies that abide by merger consent agreements do not suffer such consequences.

These monopolistic concerns bleed into every aspect of the Live Nation business, Perry argues, including the deployment of proprietary technology designed to deter competition in resale marketplaces that have been re-branded as integral to the reopening of live events in the age of COVID. Holdbacks and “slow ticketing” practices are employed to obscure inventory and create a false sence of scarcity, using the lack of transparency and a public relations push blaming resale competition for its own engineering of inflated prices.

“[Research shows that] it is common for 40 or 50 percent of tickets to be secretly held back for high-demand events, but then slowly dripped onto the market,” he says. “Meanwhile, consumers mistakenly believe the tickets were snatched up by scalpers when in fact the tickets never went on sale in the first place.”

Perry concludes that until a robust federal legislation – such as the proposed BOSS Act – can be passed to help protect consumers beyond the patchwork of state legislation regarding anti-competitive behavior in the space, it would be a boon to consumers for Biden’s administration to crack down on ticketing as it exists today. “With live events back, Washington should not miss this opportunity to fix what is broken in live event ticketing.”

Last Updated on September 23, 2021