Lawmakers grill ticketing industry after Taylor Swift concert fiasco

By Aditi Sangal and Brian Fung, CNN

Updated 4:05 p.m. ET, January 24, 2023
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11:29 a.m. ET, January 24, 2023

A musician describes his experience with Ticketmaster parent company Live Nation

From CNN's Aditi Sangal

Clyde Lawrence (left) and Jordan Cohen, of the band "Lawrence".
Clyde Lawrence (left) and Jordan Cohen, of the band "Lawrence". (From Committee on the Judiciary)

In his opening remarks at a Senate Judiciary Committee hearing, Clyde Lawrence, singer-songwriter and member of the band Lawrence, explained how a fan's ticket money would be shared between a hypothetical concert played at a venue owned and operated by Live Nation, the parent company of Ticketmaster.

"Live Nation and Ticketmaster often acts as three things at the same time — the promoter, the venue and the ticketing company," he said Tuesday.

Lawrence described a hypothetical sold-out show at a Live Nation-owned and Live Nation-operated venue.

"When an artist plays these venues, they are required to use Live Nation as the promoter. Far from simply advertising, the promoter coordinates and pays the upfront costs to put together a concert, such as renting and staffing and the venue and striking a deal with the performer. Since both our pay and theirs is a share of the show's profits, we should be true partners aligned in our incentives — keep costs low while ensuring the best fan experience," he said. "But with Live Nation not only acting as the promoter, but also the owner and operator of the venue, it seriously complicates these incentives."

In negotiating, artists have no leverage over Live Nation, he said.

"At the end of the show, costs will have eaten into most of the money made that evening, and due to Live Nation's control across the industry, we have practically no leveraging in negotiating with them. If they want to take 10% of the revenues in facility fees, they can and have. If they want to charge $30,000 for the 'house nut' (the fixed fee the venue takes), they can and have. And if they want to charge us $250,000 for a stack of 10 clean towels, they can and have," he told lawmakers.

After these costs have been accounted for, Lawrence said the remainder of the show revenue is split between Live Nation and the band. He explained why this is a problem:

"In the world where the promoter and the venue are not affiliated with each other, we can trust that the promoter will work to get the best deal from the venue. However, in this case, the promoter and the venue are part of the same corporate entity. So these line items are essentially Live Nation negotiating to pay itself. Does that seem fair?" he asked.

11:54 a.m. ET, January 24, 2023

Ticketmaster hearing could create political cover for a DOJ antitrust suit

From CNN's Brian Fung

Joe Berchtold (L), president and CFO of Live Nation Entertainment, Inc., and other members of the ticketing and entertainment industry are sworn in before the Senate Judiciary Committee January 24.
Joe Berchtold (L), president and CFO of Live Nation Entertainment, Inc., and other members of the ticketing and entertainment industry are sworn in before the Senate Judiciary Committee January 24. (Win McNamee/Getty Images)

Tuesday's hearing could give the Justice Department significant political support for an eventual antitrust suit against Live Nation, after multiple lawmakers and witnesses backed intervention against the company.

That appetite for action dovetails with the current DOJ's assertive approach to enforcement. The head of the antitrust division, Jonathan Kanter, has pushed to bring more lawsuits to trial, and more lawsuits advocating unconventional legal theories.

On Tuesday, lawmakers repeatedly questioned the US government's past handling of Live Nation, which involved a legally binding consent agreement that allowed the company to merge with Ticketmaster so long as the combined company abided by a number of behavioral conditions.

A 2019 Justice Department review found that Live Nation was not meeting its commitments under the order, but instead of suing, the Department modified the agreement and extended it for another five years, according to Kathleen Bradish, VP for legal advocacy at the American Antitrust Institute.

The latest allegations against Ticketmaster should not lead to a repeat of history, Bradish said.

"DOJ should pursue new enforcement action to obtain effective structural relief," Bradish said, calling for a breakup of Live Nation under either Section 7 of the Clayton Act or Section 2 of the Sherman Act.

Sen. Mike Lee said the way that history has unfolded since the Live Nation merger raises "very serious doubts" about the usefulness of consent agreements imposed by the federal government.

"While DOJ undoubtedly wants to know whether Ticketmaster is violating the consent decree, Congress should be asking whether the consent decree was the right decision in the first place," Lee said.

If the current Justice Department concludes that the consent decree has been violated, "unwinding the merger ought to be on the table," said Sen. Richard Blumenthal.

10:47 a.m. ET, January 24, 2023

Concert venues "fear" Live Nation's power, rival CEO says

From CNN's Brian Fung

Jack Groetzinger, CEO of ticketing platform SeatGeek.
Jack Groetzinger, CEO of ticketing platform SeatGeek. (From Committee on the Judiciary)

SeatGeek, a rival to Ticketmaster and its parent company Live Nation, alleged that many venue owners "fear losing Live Nation concerts if they don't use Ticketmaster" and its services.

Live Nation's tightly integrated operation puts it in a prime position to exercise undue influence, and the company must be broken up, argued Jack Groetzinger, CEO of SeatGeek.

"Live Nation controls the most popular entertainers in the world, routes most of the large tours, operates the ticketing systems and even owns many of the venues," he told lawmakers. "This power over the entire live entertainment industry allows Live Nation to maintain its monopolistic influence over the primary ticketing market."

"As long as Live Nation remains both the dominant concert promoter and ticketer of major venues in the US, the industry will continue to lack competition and struggle," he said.

In his opening testimony, Live Nation CFO Joe Berchtold suggested that venues enjoy significant leeway to run their operations. He testified that Ticketmaster does not set ticket prices, does not determine the number of tickets put up for sale and that "in most cases, venues set service and ticketing fees," not Ticketmaster.

10:47 a.m. ET, January 24, 2023

Live Nation exec apologizes for Taylor Swift concert tickets fiasco

From CNN's Aditi Sangal

Joe Berchtold, Live Nation Entertainment's President and CFO.
Joe Berchtold, Live Nation Entertainment's President and CFO. (From Committee on the Judiciary)

In his opening remarks at a Senate Judiciary Committee hearing, a top Live Nation Entertainment exec apologized for the Taylor Swift concert tickets sale fiasco.

"As we said after the onsale, and I reiterate today: We apologize to the fans. We apologize to Ms. Swift. We need to do better and we will do better," said Joe Berchtold, the president and CFO of Ticketmaster parent company Live Nation Entertainment.

Berchtold blamed the fiasco on a bot attack and said it forced the company to "slow down and even pause our sales," which led to a "terrible consumer experience that we deeply regret."

10:47 a.m. ET, January 24, 2023

Sen. Klobuchar quotes Taylor Swift in her opening remarks

From CNN's Aditi Sangal

(From Committee on the Judiciary)
(From Committee on the Judiciary)

Sen. Amy Klobuchar, a Democrat from Minnesota, emphasized the importance of competition to uphold a capitalist system in her opening remarks at the Senate Judiciary Committee hearing on the event ticketing industry's market practices.

While criticizing the practice of consolidation in the market, she used Taylor Swift's lyrics, saying it's a practice that the country knows "all too well."

"To have a strong capitalist system, you have to have competition. You can't have too much consolidation — something that, unfortunately for this country, as an ode to Taylor Swift, I will say, we know 'all too well.'"

10:18 a.m. ET, January 24, 2023

Top Judiciary Committee senators blast Ticketmaster's dominance

From CNN's Brian Fung

(From Committee on the Judiciary)
(From Committee on the Judiciary)

The Senate Judiciary's leading Democrat and Republican kicked off Tuesday's hearing by targeting Ticketmaster's economic dominance.

"These issues are symptomatic, I think, of a larger problem," said committee chair Sen. Dick Durbin, arguing that live event ticketing has been "dominated by a single entity" that was created from a decade-old merger between Live Nation and Ticketmaster.

Durbin said he believes the legally binding consent agreement allowing Live Nation to complete the deal with conditions has not succeeded in preserving competition.

"That consent decree does not appear to have been effective," Durbin said. "In the decade-plus since the merger, Live Nation has consolidated its dominant position in the live ticketing market."

Sen. Lindsey Graham, the panel's top Republican, agreed that "consolidation of power in the hands of a few can create problems for the many."

"Out of this hearing," he said, "I hope we can make a better experience of the consumer being able to buy tickets to things you want to see without such a debacle" as the Taylor Swift ticketing process.

10:08 a.m. ET, January 24, 2023

NOW: Today's Senate hearing on the ticketing industry has kicked off. Here's who is testifying.

The U.S. Capitol in Washington, D.C., on January 23.
The U.S. Capitol in Washington, D.C., on January 23. (Jim Watson/AFP/Getty Images)

The Senate Judiciary Committee is holding a hearing where event ticketing industry executives will testify. This comes two months after Ticketmaster's mishandling of the sale of Taylor Swift concert tickets in November, which sparked a conversation about possible monopoly in the live entertainment market.

Here are the witnesses who will testify:

Joe Berchtold, the president and CFO of Ticketmaster parent company Live Nation Entertainment

Jack Groetzinger, CEO of ticketing platform SeatGeek

Jerry Mickelson, CEO of Jam Productions, one of the largest producers of live entertainment

Clyde Lawrence, singer-songwriter who has composed music for motion pictures, including the Disney+ holiday comedy movie “Noelle.”

9:55 a.m. ET, January 24, 2023

Taylor Swift called the Ticketmaster fiasco "excruciating"

From CNN's Frank Pallotta

Taylor Swift at the MTV Video Music Awards on August 28, 2022, in Newark, New Jersey. 
Taylor Swift at the MTV Video Music Awards on August 28, 2022, in Newark, New Jersey.  (Evan Agostini/Invision/AP)

Taylor Swift spoke out about how the Ticketmaster situation was “excruciating” for her to watch.

“I’m not going to make excuses for anyone because we asked them, multiple times, if they could handle this kind of demand and we were assured they could,” the singer wrote in an Instagram post last November, shortly after the fiasco unfolded. “It’s truly amazing that 2.4 million people got tickets, but it really pisses me off that a lot of them feel like they went through several bear attacks to get them.”

Swift added that she would try to “figure out how this situation can be improved moving forward.”

Sales for the singer’s new Eras Tour began in November, but overwhelming demand snarled the ticketing site, infuriating countless fans who couldn’t buy tickets. Customers complained on social media about Ticketmaster not loading, saying the platform didn’t allow them to access tickets, even if they had a pre-sale code for verified fans.

Soon after, Ticketmaster announced that the sale to the general public was canceled due to “extraordinarily high demands on ticketing systems and insufficient remaining ticket inventory to meet that demand.”

“To those who didn’t get tickets, all I can say is that my hope is to provide more opportunities for us to get together and sing these songs,” Swift said.

9:46 a.m. ET, January 24, 2023

Catch up on what went wrong with Ticketmaster as Taylor Swift fans tried to get tickets for her Eras tour

From CNN's David Goldman

Taylor Swift’s Eras tour kicks off March 17 and will have 52 concerts in multiple stadiums across the United States over five months. Overwhelming demand snarled the ticketing site in November, infuriating countless fans.

Customers complained on social media about Ticketmaster not loading, saying the platform didn’t allow them to access tickets, even if they had a pre-sale code for verified fans. Ticketmaster ultimately canceled ticket sales to the general public.

Ticketmaster apologized to Swift and her fans who were unable to secure tickets and blamed the debacle on its “Verified Fans” system, a mechanism aimed at eliminating bots that gives presale codes to individuals.

The system couldn’t keep up with the intense demand, Ticketmaster said.

Roughly 3.5 million people signed up for the program to buy Swift tickets, its “largest registration in history.” That unprecedented demand, combined with a “staggering number of bot attacks as well as fans who didn’t have invite codes” drove “unprecedented traffic” to its site, Ticketmaster said, and, essentially, broke it.

But the House Energy and Commerce Committee said the company’s explanation wasn’t sufficient.

“This statement raises questions over your bot management solution and its ability to adequately protect consumers,” the committee wrote in a letter to Live Nation CEO Michael Rapino.

The committee pointed out that the BOTS Act of 2016 allows the Federal Trade Commission to fine Ticketmaster with “steep” penalties if it “knowingly sold tickets that were improperly purchased” by bots.

The committee also said it wants information about the fees Ticketmaster charges customers. It also asked to learn more about dynamic pricing. ticket availability limits, restrictions on transferabiity and the company’s efforts to thwart bots and scammers.

Ticketmaster did not immediately respond to a request for comment.