- When firms become dominant,
they can become too big to care.
- [Narrator] That's FTC Chair Lina Kahn
at The Wall Street Journal's CEO Council.
She's answering a question
about the Taylor Swift Ticketmaster Fiasco,
a situation that's renewed calls
to undo its decade-old merger with Live Nation,
which has plagued Washington, D.C.
and the music industry for years.
Tickets to Swift's first tour in five years went on sale
to Verified Fans and then to Capital One card holders.
But in both cases,
a glitchy system kept fans from securing tickets.
- Once they got into the system,
they'd click on tickets that would disappear.
They'd get kicked out, they'd get error messages.
- [Narrator] Which prompted furious fans
to take to the internet.
- What do you mean something went wrong?
I'm not doing this today, Ticketmaster.
- [Narrator] And lawmakers to call for scrutiny.
- There's no other choice.
That's why we are pushing the Justice Department
to look at this.
- [Narrator] Before tickets could open to the public,
Ticketmaster canceled the sale.
So how did Ticketmaster reach the point where lawmakers
and fans are calling for scrutiny?
Fan testimonies, congressional hearings,
as well as court documents tell the story.
(fans cheering)
Now Taylor Swift fans are suing Ticketmaster
over claims that the ticketing giant violated antitrust laws
and some lawmakers are even calling it a monopoly.
To understand why, we have to go back.
The timeline starts here in 2009
when two of the largest companies
in the live event space sought to join together.
- Will the combined company be tempted to divert tickets
to the resale market at inflated prices
because there are now no competitors
to keep this behavior in check?
- Live Nation CEO Michael Rapino,
and then CEO of Ticketmaster Irving Azoff pled their case
in front of the Judiciary Subcommittee on Antitrust.
- It was 2009, so this is right
in the thick of the financial crisis.
Concert promotion's a really, really tough margin business
whereas ticketing, on the other hand,
is a very high-margin business.
- [Narrator] This financial need was one
of the main talking points
at the time for why the two required a merger.
- I have two choices.
I can hope the economy gets better
or I can seek a more proactive approach
to protect our employees, reward our shareholders
and better service artists and fans.
- [Narrator] Of course, the committee
also heard the opposing case.
Antitrust law attorney David A. Balto,
as well as some music promoters,
each testified against the merger.
- From a straightforward horizontal concern,
this merger is anti-competitive.
- The fear was that this would create this behemoth
that would kind
of have a strangle hold on the music business.
- [Narrator] That's because Ticketmaster
was already the dominant ticketing provider
while Live Nation was the largest promoter of live shows.
Blending the two would mean the company would have a hand
and pocketbook in nearly every step
of the live event business.
- When you have that type of integration,
it can create certain types of conflicts of interest.
At the time, there was a concern
that Ticketmaster might use its position
to tie those things together,
and to say, well, in order to have access to this venue,
you actually have to use our ticketing site.
- [Narrator] The Department of Justice
ultimately allowed the merger
after coming to an agreement with the companies
through what is known as a consent decree.
- Under the settlement, it says
that Live Nation is not allowed
to strong arm venues into using Ticketmaster.
- [Narrator] But almost 10 years later, reports broke
that the DOJ was preparing legal action
for that very reason.
- According to this report, it believes it violated
a merger settlement
by trying to coerce concert venues into using Ticketmaster.
- Without Live Nation admitting any wrongdoing,
a new settlement with the Department of Justice was reached.
I think a lot of people viewed it
as sort of a slap on the wrist.
- [Narrator] Then as the Biden administration
took office, lawmakers
like US Representative Bill Pascrell voiced hope
for stricter antitrust laws.
In a letter to the admin, Pascrell,
along with several other Democrats said,
"The evidence of strangled competition is overwhelming"
and called on the admin to revisit the merger.
- We've seen these agencies, the DOJ and the FDC,
really be encouraged to take a more critical eye
toward these big mergers.
- [Narrator] As part of a broader effort,
President Biden signed an executive order last year aimed
at promoting competition in the American economy.
- Let me be very clear,
capitalism without competition isn't capitalism.
It's exploitation.
- But that fall, as live events began revitalizing
from the COVID-19 halt, issues with Ticketmaster's site
continued to mount.
Similar problems to Swift's Eras tour
happened last year with the BTS concert
and Olivia Rodrigo's too.
Then in December this year,
Ticketmaster apologized again,
this time for a Bad Bunny ticket fiasco in Mexico City.
♪ I remember it all too well ♪
- [Narrator] In the current live event market,
it's not uncommon
for a ticketing site to get overwhelmed with high volume
but this reached an entirely new scale with Taylor Swift.
- For the first day of pre-sales,
they sold over two million tickets to her show,
which is the most tickets sold
for any single artist in a single day
in Ticketmaster history.
- [Narrator] Ticketmaster sold tickets to all
but five of her 52 stadium shows.
The ones at the State Farm Stadium
and the AT&T stadium were sold through SeatGeek.
That's because of a business practice known
as exclusive ticketing contracts.
- In that case, Ticketmaster goes
to venues and inks an exclusive deal,
which means anything that comes through this stadium
or arena is gonna be sold through Ticketmaster.
- [Narrator] In an interview with CNBC,
Liberty CEO and Live Nation chairman Greg Maffei
credited the company's stellar services
for its market share.
- Our competitor, who is the promoter for Taylor Swift,
chose to use us because we are, in reality, the largest
and most effective ticket seller in the world.
Even our competitors want to come on our platform.
- [Narrator] To which Taylor Swift's promoter AEG rebutted.
- And they said, no, we actually didn't have a choice.
She's the biggest artist in the world.
She's gonna tour in stadiums, and those stadiums
are locked up in exclusive contracts with Ticketmaster.
- [Narrator] Live Nation has said it didn't engage
in behavior that warranted litigation.
The company added
that the ticketing industry is more competitive than ever.
- It's pointed to some
of the deals that it's lost in venues to competing services
and it says that it continues to innovate
and make its technology better.
- [Narrator] The Justice Department declined to comment.
While calls build for the DOJ to undo the deal,
many industry experts wonder
if reversing the merge would solve the issue.
- Ticketmaster would still be the dominant player
in the ticketing industry.
It would still control some 70 to 80% of the market
and it would still have these exclusive ticketing contracts
with the venues.
- [Narrator] But undoing the merge isn't the only option
at the DOJ's disposal.
- They can also do investigations
into whether current business practices
are unlawful under separate laws.
- [Narrator] The legal actions taken
against Ticketmaster and Live Nation are pending.
In the meantime,
Taylor Swift fans are scavenging resale sites,
still hoping to secure tickets.
(pensive music)