On November 15, AOC tweeted, “Daily reminder that Ticketmaster is a monopoly, it’s merger with Live Nation should never have been approved, and they need to be reigned in. Break them up.”
Alexandria Ocasio-Cortez isn’t the first to raise this warning flag about Ticketmaster. Politicians in Washington, D.C., have been opposed to the Ticketmaster-Live Nation merger since 2009.
In 2010, Live Nation, the world’s biggest concert promoter, and Ticketmaster the leading ticket provider were allowed to merge in 2010 by the United States Justice Department. Ticketmaster and Live Nation were allowed to merge and rebranded themselves as “Live Nation Entertainment”.
Back in the early 2000's vertical integration was all the rage. An essential step in the development of industrial capitalism. Companies could control as many links in the value chain as possible; streamline operations, and gain significant cost savings.
“Live Nation Entertainment” is a vertical and horizontal merger. A vertical merger is a business consolidation that occurs between companies that operate in the same space, and a horizontal merger is between companies in the same industry, but at different stages of the production process.
Updated guidelines on vertical mergers are essential, but they have not been updated since 1984. Guidelines do not accurately reflect current economics or enforcement on vertical mergers. As a consequence of this merger, the two entertainment giants created an oligopoly in the live music business.
Prior to the merger, the U.S. Department of Justice conducted some due diligence including interviews. Bob Skoney, GM of Nashville’s Municipal Auditorium believed, “it could affect future negotiations, as far as it Live Nation is the only [promoter] that has [a certain] act, it could create a little bit of a monopoly,”
Christine Varney was responsible for allowing the mergers of Live Nation Entertainment with Ticketmaster. Varney, a Clinton and Obama Administration alumni, was confirmed April 20, 2009 as Assistant Attorney General for the Antitrust Division.
Later that year, fifty members of the U.S. House of Representatives sent a letter to Democrat Christine Varney , to urge the DOJ to examine the merger “with great skepticism” because the combined company “would enjoy a virtual stranglehold over the live entertainment industry.”
“Building the perfect beast: newly merged Live Nation Entertainment sets about remaking the biz” Ray Waddell (2010)
On January 25, 2010, Christine Varney, concluded that the transaction, as originally proposed, was anticompetitive. Varney’s settlement required,“Ticketmaster to divest more ticketing, (Paciolan), than it will gain through its acquisition of Live Nation.” It was believed that the structural and behavioral consent decrees provided, “tough anti-retaliation provisions,” keeping the merged company in check, and put them under a “court order” effective for ten years.
“It is finally time to come to grips with the new music business’ new superpower. Live Nation Entertainment.” Ray Waddell
In 2012, John Kwoka Phd, and Dr. Diana L. Moss ( President of the American Antitrust Institute) published a paper, “Behavioral merger remedies: Evaluation and implications for antitrust enforcement.” The article stood to support the decisions of Christine Varney. Both companies, Ticketmaster and Live Nation, were already significantly integrated and the merger would eliminate horizontal competitors (or potential competitors). Ticketmaster would maintain a dominant position and the transaction would increase the degree of vertical control. No competitor would be able to not transact with a merged Ticketmaster–Live Nation and this would harm harm to consumers. The paper, supported behavioral remedies that allowed the merger to go forward, subject to ongoing restrictions on the merged firm’s conduct.
In 2016, The New York Times, reported that Ticketmaster-Live Nation ticketed 80 of the top 100 U.S. concert venues.
Without significant market competition, Ticketmaster-Live Nation and other primary ticket providers continue to charge high fees to consumers — an average of 27 percent of the ticket price, according to the Government Accountability Office.
In 2019, Daniel Marcus wrote an article in Forbes, “Ticketmaster Strikes Deal With DOJ, But What Will Change?” where he examined the Department of Justice (DOJ) imposed enforcement action against Live Nation and Ticketmaster (LYN) for violating the terms of their merger.
August 28, 2019, ten years after the initial merger and expiration of the initial order, Senator Amy Klobuchar and Senator Richard Blumenthal (D-CT) urged the Department of Justice (DOJ) to conduct an investigation into the state of competition in the ticketing marketplace. Two more years later, in April of 2021, Democratic congress members requested Lina M. Khan, the acting chair of the Federal Trade Commission, to revisit the merger.
Twelve years after the merger, concert ticket prices are record high. The systems are not working as they should and Live Nation Entertainment has become the dominant global player with operations extending into almost every aspect of the concert world. AOC is chastising the Ticketmaster monopoly, but not her own party. Following suit, Senator Amy Klobuchar is concerned about the company’s operations after a service meltdown selling Taylor Swift tickets.
Will the DOJ ever intervene?
Follow the money
Campaign Contributions by Live Nation Entertainment
From the 2010 election cycle to 2022, Live Nation Entertainment has helped to raise $1,428,036 for Political Parties, Candidates and their PAC’s — disproportionately favoring Democrats.
- Democrats $ 1,331,041
- Republicans $ 96,995
Lobbying by Live Nation Entertainment
H.R.3248: ABC Act of 2021
S.1850 Chaplains Memorial Preservation Act
H.R.1319 American Rescue Plan Act of 2021
S.4258 Competition and Transparency in Digital Advertising Act
H.R.7806 American Sovereignty Restoration Act of 2022
S.4818 A bill to prohibit the use of Federal and local funds to impose or enforce a COVID-19 vaccine mandate in District of Columbia schools, and to repeal the Coronavirus Immunization of School Students and Early Childhood Workers Regulation Amendment Act of 2021 enacted by the District of Columbia Council.
H.R.748116 CARES Act
Should oligopolies be allowed in a free market? It depends, some industries require a lot of capital investment, which they are not always able to finance. An example would be the auto industry, requires large capital investment. But, when these companies fail, the government ends up involved to help bail them out, via economic policy — which taxpayers pay for. Oligopolies prioritize profits for shareholders, and kill the small business.
How would you remedy “price fixing” by oligopolies? price fixing could be remedied through government subsidies directly to the producer or consumer.
Key Players
Barack Obama, President for the United States (Democrat) from 2009 to 2017.
Michael Rapino, CEO of #Livenation made $80,200 in contributions to Barack Obama Presidential campaign between the years of 2007–2012
Christine Varney, served as Chief Counsel to the Clinton/Gore Campaign, General Counsel to the 1992 Presidential Inaugural Committee, and General Counsel to the Democratic National Committee from 1989 to 1992. Sworn in on October 14, 1994, as a Commissioner to the Federal Trade Commission. Previously served as President Clinton’s Cabinet Secretary. In April 20, 2009, confirmed as Assistant Attorney General for the Antitrust Division for the Obama Administration.
Amy Klobuchar, (D-MN) & superdelegate, served as a Ranking Member of the United States Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights.
Dr. Diana L. Moss, President of the American Antitrust Institute
Bibliography
Aswad, J. (2019). Live Nation-Ticketmaster Chief Michael Rapino Talks Dept. of Justice Inquiries. Retrieved 1 January 2020, from https://variety.com/2019/biz/news/live-nation-ticketmaster-michael-rapino-dept-of-justice-inquiries-1203341144/
Marcus, D. (2019). Ticketmaster Strikes Deal With DOJ, But What Will Change?. Retrieved 1 January 2020, from https://www.forbes.com/sites/danielmarcus/2019/12/23/ticketmaster-strikes-deal-with-doj-but-what-will-change/#38b2bf485963
Live Nation’s Competitors, Revenue, Number of Employees, Funding, and Acquisitions. Retrieved 1 January 2020, from https://www.owler.com/company/livenationentertainment
Ticketmaster-Live Nation Merger. (2009). Retrieved 1 January 2020, from
https://www.c-span.org/video/?284273-1/ticketmaster-live-nation-merger
Waddell, Ray. “On the case: DOJ quizzes live venues about Ticketmaster-Live Nation merger.” Billboard, vol. 121, no. 33, 22 Aug. 2009, p. 11. Gale Academic OneFile, link.gale.com/apps/doc/A206341929/AONE?u=aupl&sid=bookmark-AONE&xid=f02c95db.
Waddell, Ray. “Building the perfect beast: newly merged Live Nation Entertainment sets about remaking the biz.” Billboard, vol. 122, no. 5, 6 Feb. 2010, pp. 5+. Gale Academic OneFile, link.gale.com/apps/doc/A219009751/AONE?u=aupl&sid=bookmark-AONE&xid=7483dda1.
Kwoka, John E., and Diana L. Moss. “Behavioral Merger Remedies: Evaluation and Implications for Antitrust Enforcement.” Antitrust Bulletin, vol. 57, no. 4, 2012, pp. 979–1011, https://doi.org/10.1177/0003603X1205700410.
“PREPARED REMARKS OF ASSISTANT ATTORNEY GENERAL CHRISTINE VARNEY AT A DEPARTMENT OF JUSTICE PEN-AND-PAD BRIEFING SUBJECT: PROPOSED TICKETMASTER/LIVE NATION MERGER LOCATION: DEPARTMENT OF JUSTICE, WASHINGTON, D.C. TIME: 2:00 P.M. EST DATE: MONDAY, JANUARY 25, 2010.” Washington Newsmaker Transcript Database, 25 Jan. 2010. Gale Academic OneFile, link.gale.com/apps/doc/A217639720/AONE?u=aupl&sid=bookmark-AONE&xid=bc2fb467.
United States v. Ticketmaster Entm’t, Inc., 75 Fed. Reg. 6,721, 6,724(DOJ Feb. 10, 2010) (competitive impact statement). See also James D. Hurwitz, Ticketmaster–Live Nation: An AAI White Paper (Am. Antitrust Inst., Apr. 28, 2009), available at http://www.antitrustinstitute.org/files/TICKETMASTER %20Revised.4.28.09_043020092221.pdf.
https://www.nytimes.com/2018/04/02/opinion/big-business-washington.html
