Everybody Hates Ticketmaster

Live Nation’s market power, the DOJ says, creates “a diminished incentive to innovate” that reduces customer service and product quality. That criticism isn’t new. In a 2010 Wired story, Steve Knopper related the David and Goliath story of how Ticketmaster was born. In 1976 two nerds working on a primitive computer at Arizona State University, Peter Gadwa and Albert Leffler, invented a ticket-selling program for ASU’s performing arts center that proved so successful they were able eventually to take down Ticketron, the reigning ticket seller for concert arenas through the 1980s. In addition to building a better mousetrap than Ticketron, Ticketmaster created a new, more extractive business model. Where Ticketron had charged concert venues for its services, Ticketmaster paid concert venues by adding ticket fees that it split with the house. It also paid venues large fees up front in exchange for multiyear exclusive ticketing rights. Thus did entrepreneurs devolve into rentiers. “The underlying technology,” observed Knopper, “barely changed.” It didn’t have to.

When Live Nation and Ticketmaster announced they would merge in 2009, the Obama Justice Department sued to block it, joined by many of the same states (including California and Texas) that have signed onto the new complaint. But the following year the Justice Department signed a consent decree that allowed the merger to go through under certain conditions. Live Nation, unsurprisingly, violated these conditions and was compelled to pay a $3 million fine. In 2020 the consent decree was extended five additional years. After the 2022 dustup over Ticketmaster’s alleged price gouging with Taylor Swift tickets, the DOJ once again investigated possible violations of the consent decree, but in the end the department decided to go back to square one, concluding that “Live Nation and Ticketmaster have committed additional, different and more expansive violations of the antitrust laws.”

I’m no lawyer, but this case looks to me like a slam dunk in court. And in the court of public opinion, where I can claim more expertise, it can’t lose.

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Kim browne

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