A great example of why monopolies are bad can be seen in the practices of the two companies Ticketmaster and Live Nation. The merger of the two has resulted in them wielding enormous power when it comes to live concerts. As a result, consumers get both price-gouged and lousy service.
Back in 2009, New Jersey congressperson Bill Pascrell, Jr., among others, warned that allowing the merger would be bad but the Obama administration waved it through. In 2018, Pascrell wrote an article saying that all their dire predictions had come true.
When President Obama was deciding in 2009 whether to approve a merger between the world’s largest concert promoter, Live Nation, and the biggest ticket provider, Ticketmaster, a group of bipartisan lawmakers pleaded with his administration to block the deal. This coalition, which included me, understood that the joint company would strangle competition in live entertainment.
Obama’s top antitrust regulator at the time, then-assistant Atty. Gen. Christine A. Varney, reassured critics that “there will be enough air and sunlight in the space for strong competitors to take root, grow, and thrive.” The merger was waved through and became final in 2010.
Eight years later, there are no strong competitors taking root, growing or thriving. The online ticketing market, now a $9-billion business, is still dominated by Live Nation-Ticketmaster. In 2008, the two companies held more than 80% of the market share. Combined, the new company, Live Nation Entertainment, has grown even larger, acquiring other ticket companies, promoters and festivals, including Lollapalooza and Bonnaroo.
Live Nation Entertainment controls “nearly every aspect” of the ticket business, producing record-high ticket prices and onerous fees, according to an investigation published last month by the New York Times. The Department of Justice is now looking into complaints that the company, which also manages hundreds of top artists, tried to coerce venues into using Ticketmaster.
The whole pricing and selling system is so opaque that the rank gouging that is going on is hidden. In the latest episode of his show Last Week Tonight John Oliver exposes what is going on behind the scenes and why it is that concertgoers are paying such huge prices for tickets.