Live Nation Exec Faces Bipartisan Congressional Grilling Following Taylor Swift Ticketing Fiasco

Photo Credit: Live Nation

Lawmakers today grilled Joe Berchtold, president and CFO of Ticketmaster parent Live Nation, over the much-publicized debacle that unfolded after Swifties were unable to purchase Eras Tour tickets last year.

The Live Nation exec (along with SeatGeek CEO Jack Groetzinger and others) testified before the Senate Judiciary Committee this (Tuesday) morning. The hearing arrived after would-be attendees filed several lawsuits against Live Nation over the aforesaid Taylor Swift Eras Tour ticketing fiasco, which has arguably prompted more congressional outrage and calls for regulation than the Astroworld tragedy.

Moreover, the hearing also took place amid a Justice Department antitrust investigation into the 2010 Live Nation-Ticketmaster merger, following smaller-scale controversies involving “dynamic pricing,” billing practices, and other areas in 2022. Meanwhile, Live Nation is remaining highly active in the lobbying arena.

“I’d now like to turn to the subject of today’s hearings, which focus on competition in the ticketing and live entertainment industry,” Senator Dick Durbin (who chairs the Judiciary Committee) said when kicking off the hours-long hearing. “Live event ticketing garnered a lot of attention toward the end of 2022, most notably in November, when Ticketmaster’s systems failed during the pre-sale for Taylor Swift’s new tour, leaving millions of fans stuck in virtual queues for hours waiting to buy tickets.

“While Ticketmaster and its parent company, Live Nation Entertainment, have offered explanations for these issues – these issues are symptomatic, I think, of a larger problem. The ticketing and live entertainment markets lack competition, and they are dominated by a single entity, Live Nation,” he continued.

Then, after recapping the above-noted Live Nation-Ticketmaster merger, the associated consent decree, and the market effects thereof, the senator allowed his fellow committee members to speak. These lawmakers (including some longtime Live Nation critics) took the opportunity to explain the importance of competition, Live Nation’s perceived negative impact on consumers, and alleged consent-decree violations.

Subsequently, Berchtold dedicated a verbose opening statement (read on for the entirety of the 900-word-long speech) to highlighting the purportedly stiff competition that Ticketmaster faces and blaming the Eras Tour debacle on bots and scalpers. (Groetzinger’s own remarks targeted the alleged “monopolistic influence” of Ticketmaster and called for its split from Live Nation.)

From there, Berchtold defended against questions about Ticketmaster’s role in establishing prices and service fees (“the band sets the ticket price, the service-fee level is set by the venue”), cited Pollstar data to downplay Live Nation’s venue ownership, and denied that his company had abused its market position to score a Barclays Center deal.

Other exchanges involving Berchtold touched upon the extension of the Live Nation-Ticketmaster consent decree, the length of exclusive venue agreements, the information collected by Ticketmaster (Senator Marsha Blackburn demanded written answers to these and related questions), and the BOSS Act.

Perhaps the most interesting remarks of the marathon hearing came from Senator John Kennedy, who proposed face-value transferability or an outright non-transferability on all first-party tickets (Berchtold said he’d back the measure, though other participants weren’t as supportive) and directed firmly worded comments at Ticketmaster/Live Nation.

“I’m not against big per se,” the lawmaker told Berchtold. “I am against dumb, and the way your company handled the ticket sales for Ms. Swift was a debacle. And whoever in your company was in charge of that ought to be fired.”

Here’s a complete transcript of the opening remarks that Live Nation CFO Joe Berchtold delivered before the Senate Judiciary Committee.

“Chair Durbin, Ranking Member Graham, Senators Klobuchar and Lee, and other members of the committee, I’m Joe Berchtold, president and chief financial officer of Live Nation Entertainment. I thank you for the invitation to appear today to address these important issues in the live entertainment industry so we can together work to make things better.

For almost 20 years, Live Nation has operated in the United States and around the world with an artist-first business model that is focused on helping put artists on stage and connecting them with their fans. We believe that the artist-fan connection is the foundation of the live entertainment industry, the source of nearly all commercial value, and the number-one thing that public policy should protect.

Over this period, we have helped the industry grow rapidly. In 2022, live music was a $12 billion industry in the United States – four times what it was in 2005. To fuel this growth, Live Nation has invested billions of dollars funding artists globally – $9 billion in 2022 alone.

Given our level of investment in artists, it is also critical for Live Nation to have the most effective platform possible for selling tickets. Since our 2010 merger with Ticketmaster, we have invested over $1 billion in capital to improve the Ticketmaster system. Much of this was [spent] on technologies to eliminate fraud and to get tickets to fans instead of ticket scalpers using bots, a prime example of which is our Verified Fan service.

Today’s Ticketmaster is best in class in conducting large on-sales, marketing concerts, preventing frauds, and getting tickets into the hands of real fans. I do want to take a moment to address some confusion about what Ticketmaster and other primary ticketing platforms do and don’t do.

Primary ticketing companies including Ticketmaster do not set ticket prices. We do not decide how many tickets go on sale and when, and we do not set service fees. Pricing and distribution strategies are determined by the artists and their teams. Service fees, even if they’re called ticketing fees, are retained mainly by the venues. And their portion of the service fee that Ticketmaster retains has been falling steadily over time.

This leads to the topic of today’s hearing, competition in ticketing markets. We hear people say that the ticketing markets are less competitive today than they were at the time of the Live Nation-Ticketmaster merger. That’s simply not true.

In 2009, the Department of Justice alleged that Ticketmaster’s market share was over 80 percent. It’s a different story today. The most obvious change is the emergence of the enormous secondary ticketing market, in which Ticketmaster has a modest market share and many strong competitors.

But also in primary ticketing, the Ticketmaster of 2010 did not face the level of competition that we face today, with new competitors, highly capitalized, including SeatGeek, AEG’s AXS and Eventbrite, along with established competitors including Tickets.com and Paciolan.

Ticketmaster has lost, not gained, market share since the merger. And as I mentioned, today’s competitive bidding process, with numerous credible alternative ticketing companies, [is] resulting [in] getting less of the economic value in a ticketing contract every year.

There are problems in the ticketing industry, problems we believe can and should be addressed through legislation. Many are the direct result of [the] industrial-scale ticket scalping that goes on today. A $5 billion industry in concerts alone in the United States, fueled by practices that run counter to the interests of artists and their fans.

The recent on-sale experience with Taylor Swift, one of the world’s most popular artists, has highlighted the need to address these issues urgently. We knew bots would attack that on-sale and planned accordingly. We were then hit with three times the amount of bot traffic that we’d ever experienced, and for the first time in 400 Verified Fan on-sales, they came after our Verified Fan password servers as well.

While the bots failed to penetrate our systems or acquire any tickets, the attack required us to slow down and even pause our sales. This is what led to a terrible consumer experience, which we deeply regret. We apologize to the fans, we apologize to Ms. Swift, we need to do better, and we will do better.

Ticketmaster learned valuable lessons from this on-sale. In hindsight, there are several things we could have done better. And let me be clear that Ticketmaster accepts its responsibility as being the first line of defense against bots in our industry. It’s an ever-escalating arms race.

But in this forum, where we’re here to discuss public policy, we also need to recognize how industrial scalpers using bots and cyberattacks to unfairly gain tickets has contributed to this awful experience. There are many things we can and should accomplish together.

We should enlarge the scope of the BOTS Act and increase enforcement. We should enact categorical prohibitions on fraudulent ticket practices including deceptive URLs and offering for sale tickets before they’re on sale in the primary. We should mandate all-in pricing so that fans see the full cost of their tickets from the start.

We share your goal of making [the] live entertainment industry better for artists, teams, and fans alike, and it’s in that spirit that I sit before you today. To work with you to make the fan experience better. I look forward to answering your questions.”