Live Nation Entertainment President and CFO Joe Berchtold, SeatGeek CEO Jack Groetzinger, Lawrence bandleader Clyde Lawrence, and more on Tuesday testified before the Senate Committee on the Judiciary as part of a hearing entitled, “That’s the Ticket: Promoting Competition and Protecting Consumers in Live Entertainment.”
The hearing was prompted by the recent Taylor Swift Eras Tour pre-sale ticketing debacle during which Ticketmaster‘s sales platform was overrun by unprecedented demand, leaving countless would-be customers ticketless, prompting the cancellation of a planned public on-sale, and raising the ire of artists, fans, and politicians alike. The session called into question an alleged monopoly over the live entertainment market being exerted by Live Nation Entertainment, which was formed via a 2010 merger between Live Nation, the world’s biggest concert promoter, and Ticketmaster, the world’s leading ticketing provider, and has since become a virtually unavoidable power in the industry despite various efforts to loosen its grasp.
The representatives from Live Nation, SeatGeek, and Lawrence testified for the committee alongside fellow witnesses with varying perspectives on competition in the live music sector including Jerry Mickelson, CEO and President of independent promoter Jam Productions, Sal Nuzzo, SVP of economic policy think tank The James Madison Institute, and Kathleen Bradish, VP for Legal Advocacy at the American Antitrust Institute.
Many of the points made by the hearing’s witnesses hewed closely to the interests of the various entities represented, offering arguments the ticket-buying public has often heard before: The representatives from the anti-trust organizations laid out the reasons why Live Nation Entertainment was bad for competition, and therefore bad for our economy and its component consumers. LNE’s competing promoters and ticketing providers highlighted the ways in which the conglomerate unfairly gobbles up an overwhelming share of the market.
Senators from both sides of the aisle pressed Berchtold on the inequities in the ticketing market, seemingly emboldened by this rare instance of bi-partisan consensus on a legislative issue. Various fixes to various problems were proposed, from a legal mandate on “all-in pricing” to a block on transferring tickets to enacting decentralized, non-proprietary ticket-transfer platforms, though largely in theoretical terms.
Live Nation Entertainment’s Joe Berchtold remained on the defensive throughout the hearing, deflecting allegations of his company’s anti-trust misconduct and monopolistic business practices as the senators and fellow witnesses laid out their respective cases against the corporation—often in the form of Taylor Swift lyrics, however cringeworthy. Berchtold himself admitted to “problems in the ticketing industry – problems that we believe can and should be addressed through legislation,” but refuted claims that any of the company’s actions violated anti-trust laws.
Late in the hearing, Senator Ted Cruz (R-TX) asked the five witnesses not representing Live Nation Entertainment whether they felt that the company was a monopoly. While the representatives from SeatGeek, Jam Productions, The James Madison Institute, and the American Antitrust Institute all responded in the affirmative, Clyde Lawrence—the bandleader of NYC-native soul-pop band Lawrence, whose track “False Alarms” features the lyrics “Live Nation is a monopoly”—was the only witness who hesitated to say for sure under oath.
The measured response underscored his testimony, which provided insightful views on the issues at hand from the perspective of an artist working with Live Nation Entertainment, rather than a company or organization effectively working against it. Clyde took a more practical approach than his fellow witnesses, acknowledging the financial inevitabilities of the industry while putting the company’s outsize influence into practical terms.
The Live Nation Entertainment CEO had written in his prepared testimony, “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.” Lawrence’s testimony painted a much different picture. The young musician, who last year wrote a guest essay for The New York Times entitled, “Taylor Swift’s Live Nation Debacle Is Just the Beginning,” addressed the lack of transparency in the supposedly symbiotic relationship between Live Nation Entertainment and the artists it promotes.
Joined by Lawrence saxophonist Jordan Cohen as his “counsel,” Clyde detailed the negative ripple effect caused by the same entity operating as both promoter and ticketer. “In the live music market,” Lawrence wrote in his submitted testimony, which he read with various deviations before the committee, “our promoter should be a true partner to us. Since both our pay and theirs is theoretically a share of the show’s profits, we should be aligned in our incentives: keep costs low while ensuring the best fan experience. But with Live Nation not only acting as the promoter but also as the owner and/or operator of the venue, it complicates these incentives when looking at line items in a show’s settlement sheet, which ultimately determines how much each party gets paid. Think about line items like ‘rent’ for the venue, or other more opaquely named fees like ‘house nut’ or ‘facility fee.’ In a world where the promoter and the venue are not affiliated with each other, we can trust that the promoter will look 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 the line items are essentially Live Nation negotiating to pay itself.”
“And to be clear,” he continued, “due to Live Nation’s control across the industry, we have practically no say or leverage in discussing these line items, nor are we afforded much transparency surrounding them. If they want to take 10% of every ticket and call it a ‘facility fee,’ they can (and have); if they want to charge us $250 for a stack of ten clean towels they can (and have). But it’s not just the fact that we have no say in the Live Nation’s promoter’s costs that are paid to a Live Nation venue, perhaps the most frustrating part is that practically none of our touring costs (our crew, travel, accommodations, or insurance, to name just a few) are covered. If profit is defined as revenues minus costs, then the number Live Nation presents in the settlement sheet as the show’s ‘profit’ is actually not a profit for us at all, because unlike them, we still have all of our costs to deduct.”
One primary focus of Clyde Lawrence’s testimony was the structure of Live Nation Entertainment’s ticketing fees. “We have absolutely zero say in what these fees are,” Lawrence explained, “and when we try not even to negotiate the fees (which we know would be a road to nowhere), but even just to find out how much they will be, we are told nothing. Put simply, we find out the same way as everyone else: by logging onto Ticketmaster when the show goes on sale, and seeing as much as a 40% fee or more (e.g., $12 on top of our typical $30 ticket). Although many ticketing companies have large fees, in our experience, Ticketmaster’s are typically the highest, with us having seen as much as an 82% fee for a Live Nation show last year. And to be clear, we—the artist—do not get a cent of that fee. All of it goes to Ticketmaster. How is it fair that we’re agreeing to share in the profits of a show with Live Nation, but then they’re able to add fees of which they keep 100%, making it so that we’re not actually sharing the fan’s total payment in the agreed-upon proportions?”
He went on to detail for the committee an example of a Live Nation Entertainment-produced Lawrence concert, highlighting the ways in which LNE’s vertical dominance appears to put the corporation’s profits ahead of artists’ fair compensation. “Deals vary widely, though this one runs along the lines of what my band gets,” he explained. “Let’s imagine we just played a sold-out show at a venue Live Nation owns, whether in Illinois or Texas or Massachusetts. Costs will have eaten into most of the money made that evening: $30,000 for the ‘house nut’ (the fixed fee the venue takes), $10,000 for marketing, $1,000 for Insurance, a small per-person amount for ASCAP/BMI licenses, and of course, the $250 for clean towels.”
“Once these costs, some of which went to Live Nation subsidiaries (though we do not always have transparency into which ones), are taken into account, the remainder is split between Live Nation and the band,” he continued. “The tickets were sold for $30, and our pay ended up shaking out to about $12 of each ticket, or 40 percent of the gross. But in this hypothetical situation the fan didn’t pay $30 for the ticket. The fan paid $42 because Ticketmaster tacked on its aforementioned substantial ticket fee. So of the $42 a fan spent on a ticket, we received $12. And from that $12, we need to pay for touring costs. Roughly 50 percent of our portion is used for touring expenses — a number that aligns with some other artists we know, while many others have trouble just breaking even. So that leaves $6 per ticket for us, an eight-piece band… pretax — and we pay for our own health insurance.”
While Lawrence admitted that many of these issues are not unique to Live Nation Entertainment and its properties, “[Their] horizontal and vertical reach makes it hard to create competition. Competition is beneficial for many reasons, but innovation is one of the most important. … But it doesn’t matter how innovative these other ticketing companies are; if every Live Nation show needs to be ticketed exclusively through Ticketmaster, there’s no chance for them to break through.”
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The members of the Senate Committee on the Judiciary seemed impressed by the Lawrence testimony. “You should be a senator,” Senator Amy Klobuchar (D-MN) told him after one particularly well-worded response. “[This is] the first time we’ve ever held an anti-trust hearing with a band member instead of a lawyer accompanying a witness,” Senator Mike Lee (R-UT) added during his closing remarks.
“I think this was a good hearing, because we had senators from both sides of the aisle making very valid points about competition,” Klobuchar added to close the hearing. “It may have been a coincidence [that] it was the first hearing of the entire Congress… because one, it was bi-partisan, good sign for the Senate. Two, it was about competition in our economy that goes way beyond the ticketing industry.”
“We are very interested in actually doing something and not just throwing popcorn. I think you know we have been respectful throughout this hearing, and I think part of that is our desire to actually move on this issue,” she concluded.
Okay, Senator Klobuchar. We appreciate the sentiment. Now, make it happen.
Read the complete written testimony from each of the session’s six witnesses here. Watch a full video of the committee hearing below via ABC News. Scroll down for photos from the Senate Committee on the Judiciary’s “That’s the Ticket: Promoting Competition and Protecting Consumers in Live Entertainment” hearing via Clyde Lawrence.
Senate Hearing On Ticketing Industry – Full Session Video – 1/24/23
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Lawrence will take the stage in New Orleans, LA as part of the 2023 edition of Daze Between New Orleans, taking place at New Orleans, LA’s Faubourg Brewery on Tuesday, May 2nd and Wednesday, May 3rd. The soul-pop eight-piece led by Clyde Lawrence and his sister, Gracie Lawrence, is part of an eclectic lineup featuring two nights of Goose in addition to Tank and the Bangas, Neal Francis, David Shaw of The Revivalists, George Porter Jr. & Runnin’ Pardners, Eggy, Melt, and more.
Tickets for Daze Between New Orleans are now on sale. For ticketing details (it’s not Ticketmaster, don’t worry), head here.
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