Matt Connarton Unleashed: Live Nation and Ticketmaster F*ckery

Episode Transcript

Speaker 1 (00:00):
Events and ticket prices and you know, we actually we
kind of mentioned that we didn't get into this part
of it when we were talking to Charles about WWE
and uh, you know how expensive it is with all
the streaming services and everything, but also ticket price is
very expensive. And of course when you buy tickets to
go to a WW event, you're going to be buying
them through you know, Live Nation slash Ticketmaster. There is

(00:22):
some news now we've talked a lot about over the
past couple of years on the show about tickets and
ticket prices and and how you know, the monopoly that
Live Nation has on ticket prices and how expensive it
is getting has become uh to go see live shows.
Digital Music News has a story up. Major law firms

(00:43):
seek class certification in Live Nation Ticketmaster suit. Uh say,
the companies used their decade plus monopoly to raise prices,
and of course that is nothing new. Everybody in the
industry knows that that goes on. It's very very difficult
to compete with Live Nation slash Ticketmaster. You know, it's

(01:04):
the same company. The two names are interchangeable, and when
whenever anyone has tried, they haven't gotten very far. I
still remember Jesus goes back a long time now. But
remember when Pearl Jam tried it, yep, and they started
working with I don't even remember the name of the
company they were working with, but they started working with
a different company I cannot remember.

Speaker 2 (01:22):
I can't remember either, but you know, and they.

Speaker 1 (01:24):
Went and they testified before Congress. A couple of the
members testified before Congress about the matter. But the issue
that they ran into was not only they tried to
use a different ticketing service. Not only though does part
of why Live Nation is able to maintain their stranglehold
on all of this is because they don't just control

(01:48):
the ticketing process, but they also control a lot of
a lot of these buildings. So if you say, and
by the way, this was pre merger, but if you
are you know, even a band as popular as Pearl
Jam at that time, you know this was back in
the nineties when this happened. If you decide, you know,
you're gonna flip the bird ticketmaster and say we're gonna

(02:08):
do this without you, you've still got the problem of
they not only control the ticketing process, they control the buildings.
They have exclusive relationships with these promoters, or even if
they don't have exclusive relationships on paper. You know, if
you're a promoter, you do not want to do something
that's going to anger this organization, in this case Ticketmaster,

(02:31):
that you depend on, that you have to work with,
by suddenly you're putting on shows working with this other company.
So Pearl Jam ended up. They had to finally give up,
They had to give up on the whole thing because
and just go back to working with Ticketmaster because they
were running into a problem. Not only was it you know,

(02:53):
they're using this this small sort of upstart company to
sell their tickets. But there's venue, there's all these venues
they suddenly can't play yep, because Ticketmaster controls the venues.
So it's very difficult to break this monopoly and to
break through. So here's what's happening now. This is the latest.
This story just went up yesterday on Digitalmusicnews dot com,

(03:16):
which is a great site by the way, if you're
interested in this subject or anything involving the music industry.
Major law firms are once again pushing for class certification
in a high stakes lawsuit centering on the alleged anti
competitive business practices of Live Nation and its Ticketmaster's subsidiary.
Let's see it says here attorneys with Quinn, Emanuel Urkhart

(03:39):
and Sullivan. That's a mouthful as well as Keller Postman
just recently asked the court for class certification in the complaint,
which technically dates back to twenty twenty two. And I
think we've talked about this case specifically on the show.
So back in the twenty twenty two action, the plaintiffs
maintained that Live Nation and ticket Mapas had since updated

(04:02):
their arbitration agreement in ways that renders it unenforceable. Okay.
Next part of this fast forward passed multiple twists and
turns to October twenty twenty four, when the Ninth Circuit
then upheld a District Court ruling rejecting Ticketmaster's attempt to
compel arbitration via quote an arbitrator employed by a newly

(04:23):
created entity, new era ADR using novel and unusual expedited
mass arbitration procedures unquote, letting the October ruling summary take
the wheel. In the interests of brevity, The relevant quote
panel held that the delegation clause of the arbitration agreement
and the arbitration agreement as a whole were unconscionable and

(04:44):
unenforceable under California law unquote. For this will all make
sense eventually, we just got to get to it. Okay.
So for a company Live Nation in this case that's
face and is facing a number of suits from ticked
off consumers, the development was of course significant. The promoter
moved forward with a Supreme Court petition as well, with
Live Nation slash Ticketmaster lacking quote the shield of an

(05:07):
enforceable arbitration agreement unquote. The Columbia Law Journal of the
Arts summed up, quote, it seems the plaintiffs are free
to bring their antitrust case unquote.

Speaker 3 (05:15):
So just to clarify for people too, a class certification
is a legal step that comes before the actual class
action lawsuit. It's when you go to court and you
prove to the court that you've got numerous people, that
there's commonality between it all, that there's adequate representation, that
you meet all of the essential parts to go forward

(05:38):
with a class astion lawsuit.

Speaker 2 (05:40):
So this is a critical for a.

Speaker 1 (05:41):
Step, right right, let's see. Okay, the next part of
this enter the initially mentioned attempt to secure class certification
with a related hearing schedule to take place on the
morning of December fourth, so closer to the present. The
filing largely recaps the alleged consumer harm resulting from the

(06:05):
practices of Live Nation and Ticketmaster. Okay, this gets to
the heart of the matter. Admittedly, as recent years have
delivered more than a few qualms with and suits against
the defendants, not to mention an ongoing doj antitrust action
looking to split Ticketmaster from Live Nation, the underlying arguments
don't exactly break new ground. The legal text reads, in

(06:28):
part quote to backstop their exclusive dealing, defendants have leveraged
their dominance in concert promotion to coerce venues. This is
what I was referring to earlier. This is a problem
Pearl Jam ran into to coerce venues into exclusive ticketing
deals with Ticketmaster. Major venues rely on concert promoters to

(06:51):
rent their space and sell tickets. Defendants exploit this dependence
by tying Ticketmaster services to Live Nation promoted concerts. Unquote.
I mean, look, let's call it what it is. They own.
They own the concert industry. They own, they own.

Speaker 2 (07:10):
It, and that's the problem.

Speaker 3 (07:11):
Yeah, and then that translates into these enormous ticket prices.
I mentioned it earlier. The artist young Blood. He there's
an interview out there with him talking about how ridiculous
prices are and how he was really freaked out when
he found out that people who were getting up front
were paying three hundred dollars a ticket to see him,

(07:33):
and he thought that was really grotesque, and a lot
of artists do. But they're stuck between a rock and
a hard place. You want to go to, you want
to do a concert, you gotta have a venue. And
if the venues got the exclusivity contract with Ticketmaster to
do all the ticket sales, you can't do anything.

Speaker 1 (07:50):
And even if there is no agreement, even if there
is no exclusivity agreement, they're still going to lean on you, right,
you know what I mean?

Speaker 3 (07:57):
And if that's where the venue's going anyway, like, that's
where they're doing. And it probably is simplicity they have.
It's easier to put a concert up and sell the
tickets through them than it is for the individual venues
to do it themselves, which requires more employees or what
have you.

Speaker 2 (08:13):
So, yeah, they've used.

Speaker 3 (08:14):
To be venues told sold their own tickets years ago, Yeah,
years and years ago. But now that's completely pretty much
unheard of. You you got to go to a ticket
math where else.

Speaker 2 (08:26):
Do you go to get a ticket?

Speaker 1 (08:27):
I mean for small for you know, if you're a
small promoter like so for example, we were just talking
about vices Fest. You know, you go to you go
to the Vice's fest website and you can buy tickets,
but you know through you know, because you do have
services like event right and so forth. But but if
you're you're.

Speaker 2 (08:43):
A venue that doesn't put a requirement on them.

Speaker 1 (08:46):
How the ticket right, it's the Strand and Dover. It's
not a you know, it's not an arena. But if
you're in an arena or even even a lot of theaters,
you know, this is this is what you're dealing with.
It says here. Ultimately, this will leed misconduct caused class members,
those who bought tickets in or after twenty ten and
therefore coughed up quote associated primary ticketing fees for an

(09:09):
event at a major concert venue unquote, to pay more
than they would have in a competitive market. Per the document,
Live Nation and Ticketmaster quote used their decade plus monopoly
to raise prices, stifle competition, and output into grade service
quality by squashing rivals and innovation impacts that each class

(09:29):
member felt. Unquote, The filing says.

Speaker 3 (09:32):
Can we say grow tesque greed again? It's the theme
of the day. Oh yeah, oh yeah, grow test greed.
That's what it like. They're not happy making money. They
got to really take every dime out of the person's
pocket that they can get. Well, it's it's sad, and
it also disenfranchises so many people from being able to
see artists. Because you get spent three hundred dollars on

(09:53):
the ticket, it's going to cost you two hudred dollars
for groceries for the week.

Speaker 1 (09:57):
So yeah, you.

Speaker 3 (09:58):
Don't really have three hundred discs laying around for the
average joe, the average working man is getting the shaft
on being able to go to concerts unless they play
for nosebleeder seed. It's you know, you get your fifty
bucks set up in the mesona behind a pole.

Speaker 2 (10:14):
You can't see anything, but you can hear it.

Speaker 3 (10:16):
Right, Yeah, it's not about quality for the customer anymore,
is it.

Speaker 1 (10:23):
It also says here it'll be worth noting. I'm sorry,
it'll be worth tracking the push for class certification moving forward.
Right now, Discovery is ongoing, and the plaintiff's council reiterated
plans to prove their arguments with, among other things, testimony
from Live Nation, Ticketmaster competitors, and market participants to boot.
So that is from Digitalmusic News dot com. So that's

(10:45):
where that stands. But there's another element here. This is
from hypebot dot com, another site that has a lot
of industry related news on it that's very interesting. So
and this just went up. This just went up a
last couple of days. Could state attorneys general use RICO

(11:06):
to stop ticket scalpers and bots? Now the reason so
part of what and the other article didn't get into
this part of it, but part of what is so
in city and we've talked about this on the show.
Part of what is so insidious about the ticketing business
is how is the secondary market and how so? And
there's multi levels to this, but part of how that

(11:28):
works is scalpers buy up these tickets and then resell
them on their own sites ridiculous prices, right right, So
so now you can't get so now the show has
sold out through Ticketmaster, but now you can get it
at a much higher price on one of these secondary sites.
But here's the Kicker. Some of these secondary sites are

(11:50):
literally they're actually owned by Live Nation.

Speaker 2 (11:53):
Stop it really.

Speaker 1 (11:54):
Yeah, we've talked about that on the show before. Oh yeah, yeah,
that's how How is that legal? That's how much they've
rigged the game. Legal, you know, until the Justice Department
says they can't do it anymore. No, it's it's all.
It's all legal, at least for now. So this story
is also interesting because it talks about scalpers and bots.

(12:17):
So again this is from Hypebot. The Federal Trade Commission
has filed the lawsuit in federal court in Maryland against
Key Investment Group, a ticket reseller operating under names like
epic Seats, total tickets dot Com, and totally Ticks. The
FTC alleges that between November one, twenty twenty two, and

(12:40):
December thirtieth, twenty twenty three, the company used thousands of
fictitious or purchased Ticketmaster accounts, along with spoofed IP addresses,
proxy networks, virtual credit cards, and simbach setups to evade
purchasing limits on high demand events including and we definitely

(13:03):
talked about this, including Taylor Swift's Eras tour. Oh yeah,
remember all the contro now yep, yep. All together, the
defendants purchased three hundred seventy nine thousand, seven hundred and
seventy six tickets at a cost of nearly fifty seven million,
reselling many for approximately sixty four million. Notably, two hundred

(13:28):
seventy three tickets for one Swift concert were acquired via
forty nine different accounts, far exceeding the sixth ticket per
event limit. And by the way, just some quick math.
I'm not good at math, but that's that's what a
seven million dollar profit.

Speaker 2 (13:44):
Us ruin music for everybody else.

Speaker 1 (13:48):
Yep. The FTC alleges violations of both the Better Online
Ticket Sales Act or BOTS, which prohibits circumventing online ticket controls,
and the broader FTC Act, prohibiting unfair or deceptive business practices.
Key Investment Group's defenses are likely to be that the

(14:08):
company employs human buyers, not bots, and therefore the FDC
is misapplying the BOTS Act, and that the lawsuit risks
dismantling the secondary ticket market and ending competition, benefiting only
major corporate players. Now so I'm guessing then, So what
that means is so Key Investments Group defense will be Well,

(14:32):
you know these fictitious accounts, these are actual human beings
operating the fictitious accounts, therefore is not covered by the
Bots Act. That'll be their defense. Let's see the loophole. Yeah,
a loophole exactly. The case is part of an expanded
federal court federal effort rather spurred by an executive order

(14:52):
from March twenty twenty five, issued after President Trump met
with kid Rock to promote transparency and fairness and ticket
resale markets and to curb predatory resale tactics. Well, that's
something I support, blind dog, that's right. The FTC's action
reflects growing regulatory scrutiny of ticketing practices that disadvantages ordinary

(15:13):
consumers at both the federal and state levels. Recall that
the authors of the Obama era Bots Act were recently
complaining that the FTC had rarely enforced that law. It
seems unlikely that the FTC's enforcement action against Key Investment
Group would have occurred without the broader policy momentum catalyzed

(15:33):
by President Trump's executive order targeting ticket scalping and abusive
resale practices. That order directed federal agencies, including the FTCNDJ,
to prioritize investigations and enforcement actions addressing deceptive or anti
competitive conduct in the live events and ticketing industries. The
executive like what you said about a blind dog or

(15:54):
a broken clock. The executive order was followed by public
consultation processes jointly initiated by the DOJ and FTC to
gather information on how ticket resellers were impacting consumer access
and market fairness. These actions created a clear regulatory mandate
to pursue high profile investigations like the one brought against
Key Investment Group. I don't know if we have time

(16:18):
to get through all of this just a little bit more.
We don't have to think to go through the whole thing.
But so the elements of a recocase, So how does
this become a recocase racketeering? If the FTC case sounds
like racketeering, that's because it is. To make a reco case,
Federal or state prosecutors must show one enterprise a structured

(16:41):
association formal or informal, two pattern of racketeering activity. At
least two participate I'm sorry, at least two predicate crimes
within ten years. Three predicate acts crimes like wire fraud,
mail fraud, computer fraud, access device fraud, or identify theft,
and for continuity conduct that is ongoing or opposes a

(17:05):
threat of continuing harm. The FDC's complaint practically hands this
up on a silver platter, multiple interlocking LLCs. You've got
Key Investment Group, Total Tickets, dot Com totally takes front
Rows Tickets, Wlke Investments plus individual managers provide the enterprise.
The use of fake accounts, bots and deceptive transactions can

(17:27):
likely be recast as wire fraud and computer fraud. The
classic reco predicates and the continuity is obvious. The complaint
says the conduct has persisted from twenty sixteen through today,
So I'm going to kind of skip down here because

(17:51):
we're running out of time. The FDC's complaint seeks civil
penalties and injunctions, but a state recoaction could carry treble damages,
asset for four orfeitures, and potentially criminal exposure. That shift
in remedies would change the incentives dramatically for defendants who
have so far treated civil finds as a cost of
doing business, and beyond punishment, it would send a signal

(18:13):
ticket Bodying isn't just unfair, it's racketeering. So there's more
to the article. We don't have time to get through
the rest of it, but I encourage you to check
out hypebot dot com. Very interesting. And that is, by
the way, how a lot of businesses get around things.
Like you know, if something is is uh illegal but
not necessarily a crime, but just there are potential fines involved. Yeah,

(18:40):
you can say, okay, well that's the cost of doing
business if I have to pay this fine, but the
fine is well, that's the thing, but like a tax
to them exactly. If the fine is say, okay, I
got to pay this two hundred thousand dollars fine, but
I made this but I made seven million on the transaction.

Speaker 2 (18:58):
Who cares I've paid it?

Speaker 1 (19:00):
Goss of doing business exactly, coss of doing business.

Speaker 2 (19:03):
That's so terrible.

Speaker 3 (19:04):
So on that note, it's the all these subsidiaries, it's
all the different versions of themselves.

Speaker 1 (19:09):
Yes, yeah, exactly exactly.

Speaker 2 (19:11):
And healthcare does the same thing.

Speaker 1 (19:13):
Yeah, there you go, there you go.