Speaker 1: We have a little bit of time, I want to
get in a music news story. You know, we do
like to cover if we have a little bit of
time in the show. Some weeks, we'll cover some music
industry news going on, especially with the audience we have.
We know a lot of musicians listen to the show,
a lot of industry people, and I happen to see
this pop up. And this relates to a subject that
comes up often on the show, and that is Live
Nation and it's a ticketing arm ticket Master. It's the
same company. If you didn't know Live Nation and Ticketmaster,
they are interchangeable, kind of like Comcasts and Exfinity. You
can say either one and it's the same company.
Speaker 2: But again Healthcare Optum owned by the same people. Yeah,
everybody's good, Like businesses have like a ton of these days,
but it is kind of hard to keep track of
the subsidiaries.
Speaker 1: This is from Music Business Worldwide dot Com And I
didn't realize this until this morning, but this just happened.
A couple days ago. Live Nation and Ticketmaster sued by
the Federal Trade Commission over alleged illegal ticket resale tactics.
Because something that we've talked about on the show whenever
we talk about Live Nation and Ticketmaster is how you know,
because obviously over the years, ticket prices keep going up
and up and up, long before there was any hint
of severe inflation in the economy, just completely separate from
all that, you know, and people feel, people feel gouged,
and it gets so expensive. And one of the things
that goes on is, you know, we've talked on the
show about how these small companies that are effectively ticket
scalpers will buy up as soon as Live Nation puts
a show on sale, they'll buy up a bunch of
tickets and they'll resell them on their own sites at
a higher price, especially once Live Nation Ticketmaster runs out
of the tickets. But a lot of them have been
bought up by scalpers who then resell them. But what
a lot of people don't know is some of these
companies that are doing that are actually owned to buy
ticket Master. So Ticketmaster sells tickets to these own to
their own yeah, to themselves effectively, and use this system
to jack up the prices. Yeah, most people don't realize.
Speaker 2: I know about scalpers, and I've always thought that these
companies are supposed to have safeguards and please stop all
of that. Yeah, so I will say that, not that
I'm totally surprised, but heck wow.
Speaker 1: Yeah, it's a dirty, dirty business.
Speaker 2: And then selling them back to you for triple the cost.
Speaker 1: So yeah, So here's the story. This is again, this
is from Music Business Worldwide dot Com. The Federal Trade
Commission has sued Live Nation and its ticketing arm Ticketmaster,
accusing the company of profiting from scalpers operating on its platform.
In a complaint filed on Thursday, September eighteenth and the
US District Court for the Central District of California, The
FTC accused Ticketmaster of failing to uphold its own ticket
purchase limits, in effect allowing scale, in effect allowing scalpers
to buy up large numbers of tickets and to resell
them on the secondary market at markups. So the secondary market,
that's these you know, it's them Joe's Tickets dot com
or whatever. Yeah, you know.
Speaker 2: It's only three yeah, yeah, they buy all the tickets
and then if you really want to go, Yeah, the
only way to go is to pay those guys.
Speaker 1: And that's why Ticketmaster limits how many tickets you can buy.
It once except except they don't actually do it for themselves. Apparently.
The FTC says Ticketmaster is motivated to do this because
it makes additional fees on the tickets resale. Ticketmaster can
triple dip on fees, collecting fees from one brokers when
they purchase the tickets on the primary market, two brokers
again when Ticketmaster sells their tickets on Ticketmaster's secondary market,
and finally three consumers who purchase tickets from Ticketmaster on
its secondary market. Unquote, says the complaint. Joining the FTC
in the lawsuit are the district attorneys of seven states, Colorado, Florida, Illinois, Nebraska, Tennessee, Utah,
and Virginia. The complaint alleges that Ticketmaster violated the Bots
Act bots. The Bots Act, the twenty sixteen law forbidding
the use of bots to buy tickets in online stores.
Live Nation has in the past supported the Bots Act,
or at least you know, on the public Publicly. The
FTC notes that Live Nation's policy is to allow artists
to sell to set ticket purchase limits themselves, but quote
in private, defendants have tacitly worked with these very same scalpers,
allowing them to unlawfully purchase millions of dollars in tickets
in the primary market so that defendants can extract more
profit for themselves when reselling those tickets on the secondary
market unquote.
Speaker 2: Rotest created what ruins the world.
Speaker 1: The FTC alleges that Ticketmaster has been aware for years
that certain ticket buyers have violated the limit and turned
a blind eye to the practice. The complaint states that
in twenty eighteen, Ticketmaster identified five ticket brokers who controlled
six three hundred forty five ticket Master accounts and possessed
more than two hundred forty six thousands I'm sorry, two
hundred forty six thousand tickets to nearly twenty six hundred
events Jesus FTC complaint against Live Nation. Okay, so oh,
we have to.
Speaker 2: Have the ticket prices up so high.
Speaker 1: So, the complaint states quote. In public, defendants maintain that
their business model is at odds with brokers that routinely
exceed ticket limits. In private, defendants acknowledge that their business
model and bottom line benefit from brokers preventing ordinary Americans
from purchasing tickets to the shows they want to see
at the prices artists set unquote. The FDC also alleges
that ticket Master is engaged in bait and switch tactics
in which the company displays deceptively low ticket prices to
consumers and ends up charging much more at checkout. And
by the way, anyone who's ever bought tickets from Ticketmaster
knows exactly what that's about. You look at the price
of the tickets and you think, Okay, they're going to
cost this. I'm gonna get two tickets. They're gonna cost this,
probably some sort of extra fee involved, so it might
be a little bit more. And then you get to
check out and it turns out it's like, you know,
you thought you were spending two hundred dollars on tickets,
you're actually spending over three hundred dollars on tickets with
all the fees and everything else. And is this fee
and that fee and you know, anyway, so it says
your Live. Nation announced in twenty twenty three that it
was switching to an all in pricing model at its
owned venues in the US, under which the final price,
including fees but excluding sales taxes, is shown at the
very beginning of the ticket percha process. CEO Michael Rapino
has said that the switch to all in pricing has
proven to be a success, and the company has backed
efforts to make all in pricing the law. Despite this,
the FTC alleges that quote, over the last decade, the
first price the consumer has seen on Ticketmaster's platform has
almost never been the price the consumer pays. According to
internal Ticketmaster documents, the average percentage of fees charged on
tickets ranges from twenty four to forty four percent of
the total price. From twenty nineteen through twenty twenty four,
consumers paid over sixteen point four billion in mandatory fees
on ticket purchases from Ticketmaster unquote. That's from the complaint.
The lawsuit is separate from the anti trust action which
I think we talked about on the show before that
the US Department of Justice launched against Ticketmaster and Live
Nation in May of twenty twenty four. That lawsuit alleges
that the company engaged in quote monopolization and other unlawful
conduct that swarts competition in markets across the live entertainment
industry unquote. The DOJ lawsuit is seeking to break up
Live Nation and Ticketmaster, undoing a year's old agreement that
allowed the two to merge despite concerns over the company
potentially employing monopoly power in the live entertainment business. The
DOJ has accused Live Nation of violating the terms of
that agreement. In its lawsuit. The FTC says Live Nation
slash Ticketmaster controls quote roughly eighty percent or more of
major concert venues primary ticketing for concerts, and a growing
share of ticket resales in the secondary market unquote. As
of noon on Thursday, Live Nation shares were down three
point six percent on the New York Stock Exchange, trending
at around one hundred and sixty three dollars per year.
So there you go. So that's the newest. And you know, look,
I'm a I'm a free market capitalist, and and I
think that, you know, I'm not into you know, the
idea of the government coming in and controlling uh pricing
for for concert tickets, certainly, but I'm also not in
favor of you know, these companies being able to blatantly
violate the law and slitch like baying switch, which is
illegal obviously. And look, I mean, even if even if
you're someone who takes the position that if you're if
you're a true free market I mean I say free
market capitalist, but I say that loosely because I do
believe that government has to regulate some things, not to
not to get in political because we don't do that
on this version of the show. But even if you're
someone who who thinks that all this is fine, because
you don't think that, uh, the government should have anything
to say about it, legally or otherwise, and the FTC
shouldn't be getting into this. Even if you think that,
don't you at least want to know as a consumer?
Don't you want to know why ticket prices are so?
I just as a consumer, isn't it good to be
informed about it?
Speaker 2: But in the very least shouldn't I think there there's
law involved in the fact that they shouldn't be able
to violate their own rules, like you're not. The whole
point of having these laws that you can't buy X
number of tickets is to stop scalping, is to stop
people getting ripped off. But if they make the rules
and then they're sending it, selling it to themselves and
then selling it to you, Yeah, this whole triple dip thing,
like that's criminal. In my mind's eye, that's criminal.
Speaker 1: Well, there won't be any criminal, but there might be fines.
But I mean Ticketmaster.
Speaker 2: That that's the other thing and the very least they
should have to be it should at least be held
accountable to their own rules and regulation.
Speaker 1: Yeah, absolutely so, So that's the newest wrinkle with that.
Speaker 2: Remember where else can you get a ticket? It's they
have a monopoly on the market. It's it's very hard
to get tickets to venues outside
Speaker 1: Of them, of course, of course, and it is a monopoly, absolutely,