Is Ticketmaster a Criminal Conspiracy?

Summary

The video script discusses the controversial practices of Live Nation, a company that dominates the live entertainment industry, after its merger with Ticketmaster. It highlights allegations of anti-competitive behavior, secret rebates, and financial manipulation based on leaked documents and expert analysis. The video argues that these practices not only extract profits but also exert control over the industry, creating a climate of fear and potentially warranting a breakup of the company to foster fair business practices.

Takeaways

• 📢 The Live Nation and Ticketmaster merger in 2010 was controversial and allowed by the Obama administration's antitrust division despite concerns over market power.
• 🤨 There are allegations that Live Nation, as a dominant player in the live entertainment industry, may be operating like a criminal conspiracy based on new documents.
• 📚 Matt Stoller, the author of the transcript, is an antitrust policy analyst who questions the practices of Live Nation and its impact on the entertainment industry.
• 💼 Live Nation has been under investigation by the Biden administration's antitrust division, which is a departure from the Obama administration's stance.
• 📈 Dan Wall, Live Nation's hired antitrust lawyer, publicly defended the company, arguing that high ticket prices are due to supply and demand, not monopolistic practices.
• 🎟️ Live Nation reportedly charges lower commissions compared to other online marketplaces, but still faces criticism for its business practices and high consumer prices.
• 💰 Live Nation's CEO, Michael Rapino, earned a significant amount in 2022, raising questions about the company's claims of not being highly profitable.
• 📃 Congressman Bill Pascrell released documents from a court case that shed light on Live Nation's financial operations and the potential for anti-competitive behavior.
• 🕵️ The documents suggest that Live Nation may have engaged in fraudulent practices, including secret side deals with vendors to inflate costs and siphon profits.
• 🚨 Live Nation's control over the live entertainment industry is seen as a threat to cultural and industry power dynamics, potentially stifling competition and innovation.
• 🛑 The video transcript calls for the breakup of Live Nation and a reevaluation of business practices that rely on hidden fees and kickbacks, advocating for a more transparent and fair industry.

Q & A

What was the controversial deal in 2010 in the live entertainment industry?

In 2010, Live Nation, the leading concert promoter, acquired Ticketmaster, which had a monopoly over ticketing software and was a major player in artist management. This deal was controversial due to concerns about monopolistic practices and market power concentration.

How did the Obama administration's antitrust division handle the Live Nation-Ticketmaster merger?

The Obama administration's antitrust division allowed the Live Nation-Ticketmaster merger to go forward despite concerns about market power. The division seemed to be proud of this decision, which later led to investigations under the Biden administration.

What role did Dan Wall play in defending Live Nation?

Dan Wall, an old antitrust lawyer, was hired by Live Nation to represent them against potential monopolization charges. He publicly defended Live Nation as part of a PR campaign, arguing that high ticket prices were due to supply and demand, not Live Nation's pricing strategies.

What was revealed by the documents released by Congressman Bill Pascrell?

The documents released by Congressman Bill Pascrell, based on Live Nation's own financial data from a 2019 litigation, revealed that Live Nation had secret side deals with vendors to inflate costs. This led to profits being funneled back to Live Nation through secret rebates, which were not disclosed to artists or co-promoters, ultimately resulting in financial ruin for them.

How did Live Nation use its dominance in the industry to affect smaller firms like Juice Entertainment?

Live Nation used its dominance in artist promotion, ticketing software, and other lines of business to coerce performers into not signing with Juice Entertainment for a concert. Live Nation also threatened to withhold its ticketing services from the venue if it allowed Juice to be a partner, demonstrating its market power and ability to thwart competition.

What was the outcome of the New Jersey State Fair concert dispute between Live Nation and Juice Entertainment?

Juice Entertainment, unable to reach a deal with Live Nation, was fired from the concert. Live Nation then took over the production. When the smaller firm sued Live Nation for coercion and monopolistic practices, the case revealed Live Nation's alleged secret financial tactics, including inflating costs and receiving undisclosed rebates.

What did the expert report on Live Nation's operations reveal about their accounting practices?

The expert report revealed that Live Nation had secret side deals with vendors to inflate costs, which would then be funneled back to Live Nation through rebates. This led to a lack of profits for co-promoters and artists, despite the events making money. The report also suggested that Live Nation kept two sets of books, showing losses in public statements while internally recognizing profits.

How does Live Nation's alleged business model impact the broader live event industry?

Live Nation's alleged business model creates a climate of fear in the industry, where cooperation with Live Nation's dishonest practices is rewarded with hidden revenue, while non-cooperation can lead to being worked against or being excluded from events. This model consolidates power and control over the live event industry, stifling competition and fair business practices.

What is the significance of Live Nation's CEO, Michael Rapino's $139 million earnings in 2022?

Michael Rapino's substantial earnings in 2022 contradict the narrative that Live Nation is not a highly profitable business, as argued by Dan Wall. It suggests that the company is indeed generating significant revenue, which is inconsistent with the claims of poor financial performance.

What is the argument for breaking up Live Nation and addressing similar business practices in the economy?

The argument for breaking up Live Nation is to prevent the concentration of power and the negative impact on competition and fair business practices. Addressing similar practices across the economy can help promote a more equitable and transparent business environment, reducing the influence of dominant middlemen firms and encouraging healthier market dynamics.

How does the behavior of Live Nation, as described in the script, compare to other dominant firms in various industries?

The behavior of Live Nation is consistent with the behavior of other dominant middlemen firms in various industries, such as pharmacy benefit managers, Amazon, big banks during the financial crisis, and the advertising technology industry. These firms use fees, kickbacks, and complex business structures to extract profits in ways that are hard to see, creating a climate of fear and inefficiency in their respective markets.