INTIX: Industry Mulls TM/Live Nation Split

TELL THE TRUTH: Live Nation President and CFO Joe Berchtold, from left, Jack Groetzinger, SeatGeek CEO and Jerry Mickelson, president and CEO of Jam Productions, were among those speaking before the Senate Judiciary Committee hearing on Ticketmaster’s handling of the Taylor Swift presale shutdown, among other issues. (Getty Images)

SEATTLE — This week’s International Ticketing Association conference, known as INTIX, featured its typical panel discussions, awards presentations, networking and vendor demonstrations, but it was Tuesday’s high-profile Ticketmaster hearing on Capitol Hill that was top of mind among attendees—  at least on background.

The Senate Judiciary Committee hearing saw politicians from both sides of the political aisle grilling Ticketmaster, the giant of the industry and ticketing provider for a large swath of venues across the country.

Largely brought upon crushing demand tied to a Taylor Swift presale that prevented thousands of fans from attempting to buy tickets with presale codes, which resulted in Ticketmaster and SeatGeek shutting down their systems, the hearing brought renewed scrutiny to TM’s 2010 merger with Live Nation, the world’s largest concert promoter.

While those behind the scenes can sympathize with a botched onsale, and spectators can surmise what went wrong and how the current situation could have been avoided, the takeaway from INTIX is that many within the industry consider a Ticketmaster/Live Nation breakup a real possibility rather than just political grandstanding.

“Ticketmaster would still be a successful, profitable company,” said one executive with an independent concert promoter.  Some operating as indie promoters and venue management firms expressed hope that the vertically integrated corporation could be broken up, which they say would translate to greater choices for facilities and artists. “It would definitely change things,” another insider said.

There was surprise among INTIX brethren regarding how knowledgeable U.S. senators were on the subjects of bots, ticket resale and the relationship between promoter and ticketer, which led to pointed questioning and finger-wagging from politicians. Others pointed to the breakup of AT&T and Bell Systems, which took decades to untangle and still has ramifications today, as proof that real regulation could happen.

Still, many doubt a change in the status quo is imminent. Ticketmaster has long been established as an innovator in the space with robust technology and the singular ability to handle a massive number of transactions of the magnitude required for arena and stadium tours.

“It’s not rational, it’s emotional,” is how one seasoned ticketing executive characterized the response to the Taylor Swift situation.

Considering the complexity of the industry and what the untangling would mean legally, many are skeptical that Congress would delve deeply into the matter. “Today, they went after Google,” the executive said, referring to the Department of Justice suing the search engine giant for its alleged dominance in online advertising. “They’ll move on to that and this will all blow over.”

It’s beyond the power of Congress to reverse the merger, but the DOJ, which is revisiting antitrust allegations against Ticketmaster, could ultimately force the breakup of the two entities.

In 2019, the DOJ announced it was moving to clarify and extend by five and a half years the final judgment and ensuing consent decree in United States v. Ticketmaster Entertainment, Inc., in 2010 that permitted the merger but prohibited the company from retaliating against venues for using competing ticketing services, conditions the DOJ says the company repeatedly violated. Live Nation has denied any wrongdoing and says it does not engage in behaviors that could justify antitrust litigation.

For all the public debate about the ticket-buying experience, few if any are considering superstar artists’ role in determining the price and number of tickets ultimately available — and when and how those tickets go on sale. Asked why no one is considering the talent side of the equation, one ticketing exec replied, “That’s a good question.”

The amount of bot attempts and secondary resale activity on major tours suggests artist management teams don’t know or don’t want to set ticket prices to true demand, which could potentially alienate and shut out fans with less disposable income. Prices set closer to what tickets could go for on the secondary market could reduce resale and bot interest, although artists often don’t want to be seen as price gouging their loyal fans.

Still, a price mismatch leads to third parties benefiting and true fans paying the price for their desire to attend a concert.

Many INTIX attendees see opportunities to offer services and platforms to solve longstanding ticketing problems, such as eliminating bots, improving dynamic pricing and restricting secondary resale, which the judiciary committee suggested as a remedy to some of the issues plaguing ticket-buying fans.

The technology exists to fully tackle these problems, they said, but there may not have been the urgency or outside influence needed to put the resources behind it. With increased public and government scrutiny, that time has come, attendees said.

Apart from INTIX, Daren Libonati, a veteran sports and entertainment executive, has a unique perspective on Ticketmaster’s dominance in the market and other options for venues to consider as ticketing providers. In 2002, Libonati, then executive director of Thomas & Mack Center in Las Vegas, launched UNLV Tickets, a white-label system in partnership with Paciolan, their software provider.

Twenty-one years later, the Mountain West Conference school’s in-house ticketing system is still going strong, selling tickets for UNLV sports, concerts,  National Finals Rodeo and the NBA Summer League, among other events at Thomas & Mack Center and Cox Pavilion on campus, plus Allegiant Stadium, where UNLV’s football team plays its home games.

A few years after the launch, UNLV expanded the operation outside of Vegas, consulting with other schools along with Paciolan to help start their own ticketing systems as well as the NHL Ottawa Senators.

Paciolan, which changed hands from Ticketmaster and Comcast-Spectacor is now owned by Learfield, ultimately grew to become the back-end ticketing provider for about 500 schools.

“We were told by Ticketmaster and everyone else that we will fail because our guests and clients would never leave them for another company,” Libonati said. “I was looking for a solution to create more revenue. It irritated several people in the ticketing space. How can an arena being doing this on their own? At our peak, we went from generating $350,000 annually (through Tickets.com) to more than $3 million annually, because we made the decision to control our own destiny.”

Bottom line, as the entertainment industry evolved over the past 20 years, Libonati said promoters such as Live Nation and AEG figured out they were better off controlling their own ticketing companies to maximize revenue and control the ticket-buying experience.

“They realized the promoters are only going to be successful if they have another resource, and if you’re going to put all this effort into buying shows and not getting the majority of that (ticket) revenue, you better own your own ticketing entity,” he said.

The potential split between Ticketmaster and Live Nation may have promoters thinking twice about that business model. Libonati said Ticketmaster remains the best at what it does in terms of scale and providing the newest technology available to facilitate online transactions, but it’s not always the best solution depending on the venue and market, Libonati said.

“We could not get from Ticketmaster or Tickets.com what we believed our 750,000 tickets (sold) annually were worth, so we created our own system,” he said. “We wanted to own our data and charge less. The more (fees) you would get from a third-party entity, the more you would have to charge your customer in a service fee. You think you’re doing better, but you’re gouging your fans even more.”

EDITOR’S NOTE: VenuesNow staffer Don Muret contributed to this story.