OPINION:
In just a few weeks, the federal government will deliver President Trump a plan to clean up America’s broken ticketing industry. The deadline is fast approaching, and the lobbying frenzy is already in full swing.
No surprise, Ticketmaster, the industry monopoly with deep Washington ties, is working overtime to shape the process. Its latest gambit is to push a federal cap on ticket resale prices, claiming it will protect fans from scalpers.
Spoiler alert: It won’t.
Ticketmaster doesn’t care about scalpers. In fact, it profits from the very bots it claims to fight. One recent company e-mail, revealed in an August Federal Trade Commission lawsuit, showed an employee telling a scalper that if he had already broken the law by succeeding in exploiting loopholes in the system, his ticket purchases were fine and did not need to be returned. That tells us everything we need to know about Ticketmaster’s intentions.
Real ticket reform would ensure better policing of Ticketmaster to ensure it follows anti-scalping laws. It would not give the company a government-backed way to bankrupt its competition. Unfortunately, that’s exactly what the resale price cap Ticketmaster has proposed would do.
Although Ticketmaster, with its vertical integration across venue ownership, artist management and primary ticketing, could absorb any loss, most other ticket platforms couldn’t survive under a government-imposed resale price control regime. Once they are gone, Ticketmaster would conveniently find itself with all the business its competitors lost, and fans would be left stuck paying whatever fees the Ticketmaster monopoly decides.
In other words, Ticketmaster is trying to sell the Trump administration a bag of goods and is willing to suffer some short-term pain for major long-term monopolistic gains.
This shouldn’t surprise anyone familiar with Ticketmaster’s history. The company has been accused repeatedly of using deceptive tactics to try to squeeze the little guy.
Back in the 1990s, Pearl Jam tried to defy Ticketmaster’s stranglehold on live music. The band wanted service charges capped at $1.80 so fans could afford tickets. Ticketmaster said no. When Pearl Jam tried to book venues outside the company’s system, the band alleged, Ticketmaster retaliated by threatening promoters, leaning on arenas and locking the band out of the very stages they needed.
The Department of Justice opened an antitrust investigation, but heavy lobbying pressure, including efforts from Ticketmaster’s powerful allies, derailed the case, allowing Ticketmaster’s monopoly to grow stronger.
The pattern repeated again and again. Ticketmaster has absorbed rivals, allegedly bought off promoters with up-front cash and kickbacks and cut exclusive contracts with venues to foreclose competition.
Today, Ticketmaster and its parent company, Live Nation, control more than 80% of major concert venues’ primary ticketing while handling venue management, concert promotion and artist representation. It is a vertically integrated empire dictating prices and terms across the live entertainment industry.
Encouragingly, though, unlike in the 1990s, the government is standing up to Ticketmaster. The Justice Department filed a monopolization antitrust lawsuit last year, finally recognizing that its decades of anticompetitive behavior cannot be ignored. Meanwhile, Mr. Trump has promised to rein in abusive ticket prices. Unlike Pearl Jam, which stood almost alone, fans, artists and fair competition have a powerful ally in the federal government today.
Yet the danger remains that Ticketmaster’s latest scheme, federal resale price caps, will be mistaken for reform because it sounds innocuous on paper.
Thankfully, the Trump administration knows better. Many of those serving in the highest levels of the departments of jurisdiction over this matter are familiar with Ticketmaster’s long history of crony capitalism.
The Trump administration has already shown it is serious about confronting monopolistic abuses by allowing the Justice Department’s case against Ticketmaster to move forward. Now, to follow through, it must ensure it doesn’t hand the company even more leverage under the guise of reform.
This issue will all come to a head in just a few short weeks. Time will tell how it all shakes out, but I’m willing to bet that the ultimate winners will be the consumers, not the big, bad monopoly in the room.
• Michael Busler is a professor of finance at Stockton University.
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