Live Nation Antitrust Lawsuit Won’t Lower Ticket Prices

Michael Buckner/Miscellaneous

Larry Miller is a professor and director of Music Business at NYU Steinhardt. He is the Music Business Association Educator of the Year and the producer and host of the Musonomics podcast. Diversity Responsible comments are welcome – if you are interested, contact [email protected].

When the Obama administration approved the merger of Live Nation and Ticketmaster in 2010, regulators expected the combination of the world’s most profitable concert promoter and the world’s largest ticketing platform would create a more consolidated but efficient market.

That vision has largely come true. There is now more competition in the primary ticket market than before the merger—Ticketmaster has actually lost market share—and that’s before even considering the creation of a massive secondary ticket market that would change the competitive landscape.

That’s why the Justice Department’s announcement in May that it was serving Live Nation under the Sherman Act is so surprising. The lawsuit alleges anticompetitive conduct that harms artists and fans and proposes undoing the previously approved merger.

But breaking up Live Nation Entertainment will do absolutely nothing to lower ticket prices for fans. I say that as a music business educator, analyst, and live music enthusiast. I do not advise Live Nation and I receive nothing of value for expressing my opinion on forums like this guest column.

Fans love to hate Ticketmaster, but their anger is misplaced. Artists and their teams set ticket prices, and venues set fees—not Ticketmaster. The company, to its credit, has quietly absorbed fan anger for decades while implementing a pricing strategy for artists and venues at scale and speed. It receives an estimated 5% to 7% of the ticket price for its services.

If U.S. lawmakers and regulators are really interested in making ticket prices more affordable, they should regulate the secondary market. The secondary market, recently estimated at $22 billion worldwide, drives up prices in the primary market. Artists often underprice tickets because they want to play to their real fans, but the massive resale market has disrupted basic supply and demand. Fans scrambling to get tickets to their favorite artist’s tour must now compete with millions of secondary market bots that gobble up the inventory of tickets for the most popular shows and resell them for multiples of face value. Tickets for Taylor Swift’s “Eras” tour reportedly sold for up to 70 times face value. And unlike Live Nation and competitors like AEG (which produces and promotes Swift’s tours), ticket resellers pay nothing to the artist, venue, or promoter.

Australia recently imposed a 10% cap on ticket resale above face value, and the U.K. government is considering a similar plan. But here in the U.S., more than a dozen states — including New York — have recently passed laws that prohibit similar limits.

The Justice Department says the breakup of Live Nation will open up the market to artists who want to tour. How exactly would that work? More than half of all artists’ income comes from touring. In 2022, more than 10,000 artists toured North America, up 25% from 2016, and that wasn’t just iconic acts like the Rolling Stones and Bruce Springsteen. The number of young artists on Live Nation tours who had their first success in the past decade and sold more than a quarter million tickets doubled between 2013 and 2023.

The challenge for emerging artists isn’t access to the market. Their challenge is to capture, retain, and monetize the attention of fans. It’s in an artist’s best interest to play in larger and larger venues, offering the best experience to fans once the demand for their live performances from paying audiences justifies it. I’ve done research on how the democratization of music production and distribution promised to reach legions of passionate fans at the touch of a stream button. But the virtually infinite selection of music available on most streaming platforms has made it difficult for new artists to break through, especially on a global stage. Economists call this the “tyranny of choice.”

The rise of fans seeking live entertainment in the wake of the pandemic has exposed serious cracks in the live music industry. I’ve seen Live Nation as both an aggressive competitor and a key investor in improving the experience for artists and fans. Independent promoters have long complained about the company’s “flywheel” business model, in which it collects revenue and fees from fans and sponsors and uses its scale and access to capital to lock up venues in long-term, exclusive deals. Live Nation has executed its model well—too well, some say. But the symptoms of fan frustration have little to do with any one company. By focusing on antitrust litigation, Washington may be missing an opportunity to ensure a healthy live entertainment ecosystem.

Getting it right is crucial — for artists who rely on touring to make a living, fans who increasingly value live entertainment, and millions of Americans whose jobs and communities depend on the economic growth of a vibrant live entertainment ecosystem. But one lawsuit or a focus on one industry player won’t solve it.

To fix the live concert business, we need to be honest about the realities of supply and demand, help artists secure a larger percentage of touring revenues, and regulate the secondary market. Policymakers should focus on correctly diagnosing the problem, rather than deciding on a cure before understanding the symptoms.