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The Justice Department and eight states sued Google on Tuesday, alleging that its dominance in digital advertising harms competition as well as consumers and advertisers — including the U.S. government.
The government alleges that Google’s plan to assert dominance has been to “neutralize or eliminate” rivals through acquisitions and to force advertisers to use its products by making it difficult to use competitors’ products.
The antitrust suit was filed in federal court in Alexandria, Virginia. Attorney General Merrick Garland said in a press conference Tuesday that Google’s dominance in the ad market means fewer publishers are able to offer their products without charging subscription or other fees, because they can’t rely on competition in the advertising market to keep ad prices low.
As a result of Google’s dominance, he said, “website creators earn less and advertisers pay more.”
The department’s suit accuses Google of unlawfully monopolizing the way ads are served online by excluding competitors. This includes its 2008 acquisition of DoubleClick, a dominant ad server, and subsequent rollout of technology that locks in the split-second bidding process for ads that get served on Web pages.
Google’s ad manager lets large publishers who have significant direct sales manage their advertisements. The ad exchange, meanwhile, is a real-time marketplace to buy and sell online display ads.
The lawsuit demands that Google break off three different businesses from its core business of search, YouTube and other products such as Gmail: the buying and selling of ads and ownership of the exchange where that business is transacted.
Garland said that “for 15 years, Google has pursued a course of anti-competitive conduct” that has halted the rise of rival technologies and manipulated the mechanics of online ad auctions to force advertisers and publishers to use its tools.
In so doing, he added, “Google has engaged in exclusionary conduct” that has “severely weakened,” if not destroyed competition in the ad tech industry.
Alphabet Inc., Google’s parent company, said in a statement that the suit “doubles down on a flawed argument that would slow innovation, raise advertising fees, and make it harder for thousands of small businesses and publishers to grow.”
Dina Srinivasan, a Yale University fellow and adtech expert, said the lawsuit is “huge” because it aligns the entire nation — state and federal governments — in a bipartisan legal offensive against Google.
This is the latest legal action taken against Google by either the Justice Department or local state governments. In October 2020, for instance, the Trump administration and eleven state attorneys general sued Google for violating antitrust laws, alleging anticompetitive practices in the search and search advertising markets.
The lawsuit in essence aligns the Biden administration and new states with the 35 states and District of Colombia that sued Google in December 2020 over the exact same issues.
The states taking part in the suit include California, Virginia, Connecticut, Colorado, New Jersey, New York, Rhode Island and Tennessee.
This is The Legal Beat, a weekly newsletter about music law from Billboard Pro, offering you a one-stop cheat sheet of big new cases, important rulings, and all the fun stuff in between. This week: A judge says Roc Nation CEO Desiree Perez must sit for a deposition in Megan Thee Stallion’s war with her record company, a member of Journey sues his longtime bandmate over allegations of lavish spending, Flo Rida wins an $82 million verdict against a beverage company, and much more.
THE BIG STORY: To Depose Or Not To Depose
When should a top executive be hauled into a deposition to answer questions in a lawsuit? It’s a difficult question. Make it too hard and you could insulate powerful people from the legal process; make it too easy and attorneys could use it as a form of gamesmanship in cases of questionable merit. Imagine if Lucian Grainge could be deposed every time someone sued Universal Music?
Courts typically resolve the problem with something called the apex doctrine, which says that busy “apex” officials only need to testify when they have unique info that can’t be derived from other less burdensome sources. Spotify cited the doctrine last year in an (unsuccessful) effort to block the deposition of CEO Daniel Ek in a copyright lawsuit over Eminem’s music.
That same tricky situation cropped up last week in Megan Thee Stallion’s ongoing legal war with her estranged record label, 1501 Certified Entertainment. Industry bigwig Desiree Perez is the CEO of Jay-Z’s Roc Nation — the prototypical kind of executive who can sometimes avoid depositions. But she’s also Megan’s actual manager, and 1501 Certified said she was “one of the most critical” witnesses in the case.
In seeking to avoid the sit-down, Megan’s legal team argued that 1501 was “harassing” Perez by seeking to depose her. But in a ruling last week, the judge overseeing the case didn’t buy it.
To get the full story, go read Billboard’s entire article here.
Other top stories this week…
TOP RAPPER BATTLES EX-MANAGER – Billboard took a deep-dive this week into an ugly lawsuit pitting Latin trap star Anuel AA against his former manager Frabian Eli – two “lifelong friends” who are now accusing each other of serious legal wrongdoing. The latest flashpoint is an emergency hearing this week over whether Eli can sell a $4.8 million Florida mansion that Anuel claims was purchased with stolen money.
DON’T STOP LITIGATING – The civil war inside the iconic rock band Journey continues. Keyboardist Jonathan Cain filed a lawsuit against bandmate Neal Schon for allegedly spending over $1 million on the band’s shared American Express card, including $400,000 in a single month last year — itself a response to a case filed by Schon last year.
PUBLISHER POO-POOS PARODY Music publisher BMG launched a copyright lawsuit against toymaker MGA Entertainment for promoting a brand of “unicorn poop” toys by releasing a song called “My Poops” — a scatological parody set to the tune of the Black Eyed Peas’ “My Humps.” Is that a legal fair use or just an unlicensed commercial? We’re going to find out.
FLO RIDA WINS BIG OVER ENERGY DRINKS – A jury awarded $82 million in damages to Flo Rida in his legal battle with energy drink maker Celsius, siding with the rapper’s allegations that the company reneged on the terms of an endorsement deal. His lawyers told me: “He was due these shares, he worked for them, and he wasn’t going to just let it go.”
The full Senate Judiciary Committee has opened its hearing on competition within the ticketing industry this morning and a number of witnesses have already set high stakes for the congressional probe, calling for drastic action in the ticketing space.
Moments after Live Nation president Joe Berchtold shared lengthy remarks on the causes of the Taylor Swift ticket crash, SeatGeek CEO Jack Groetzinger, one of Ticketmaster’s main competitors told Congress, “Live Nation controls most popular entertainers, routs most of the tours, tickets most of the concerts and owns many of the venues,” noting “this power allows Live Nation to maintain its monopolistic influence over the primary ticketing market.”
The 2010 consent decree governing the merger of Live Nation and Ticketmaster created “has not worked at all and violated the consent decree since its inception,” Groetzinger said.
“The only effective remedy is a structural one – the disillusion of the common ownership of Ticketmaster and Live Nation,” he testified.
Amy Edwards and Parker Harrison demonstrate against the live entertainment ticket industry outside the U.S. Capitol January 24, 2023 in Washington, DC.
Drew Angerer/GI
Jerry Mickelson, longtime promoter with Jam Concerts in Chicago who spoke out against the merger during Congressional hearing in 2010, called the deal “a vertical integration on steroids” and said its arena promotion business has decreased 90 percent since the merger.
Berchtold argued that the company’s marketshare of the concert market is close to 50 to 60 percent, not 80 percent as many have claimed. He also denied allegations that the company used its market size to punish competitors.
“It is absolutely our policy to not pressure, threaten or retaliate against venues by using content as part of the ticketing discussion.
Sen. Richard Blumenthal (D-Conn.) encouraged critics of the company and people who are fed up with the system that exists right now to “continue your criticism” as the Department of Justice takes a third look at Live Nation following a 2019 inquiry into the company.
“If the Department of Justice establishes violations of the consent decree, unwinding the merger ought to be on the table,” Blumenthal testified. “If the Department of Justice establishes facts that involved monopolistic and predatory abuses, there ought to be structural remedies that include breaking up the company.
Before taking his turn asking questions to witnesses, outspoken Sen. John Kennedy (R-La.) told Berchtold: “I’m not against big, but I am against dumb and the way your company handled Ms. Swift’s tickets was a debacle. Whoever at your company was in charge of that should be fired.”
This is a developing story — check back for updates.
Six months ago, in an email to staff, Spotify CEO Daniel Ek said that the company would “be a bit more prudent” in its hiring over the next few quarters. That came a week after Spotify’s June 8, 2022, investor day presentation on its plans to improve its margins.
The key would be podcasts, executives said, along with a new foray into audiobooks. Within three to five years, podcasts could bring in gross margins of 30-35%, which could later rise to 40-50% — far more than the company can earn from recorded music.
The company’s podcast business hasn’t come cheap, though. Spotify – which on Monday (Jan. 23) announced plays to lay off 6% of its workforce, as well as the voluntary departure of chief content officer Dawn Ostroff – spent hundreds of millions of dollars acquiring podcast start-up and programing. Ostroff spent big to get exclusive rights to The Joe Rogan Experience, as well as projects from Barack and Michelle Obama’s Higher Ground Productions; Kim Kardashian; and Prince Harry, Duke of Sussex, and Meghan Markle.
From a programming perspective, the podcasts worked. Spotify is now the most popular podcast platform in the U.S., as well as many other markets, and the exclusive programming helps attract advertisers. The company also introduced new podcast advertising formats that helped it grow its podcasting business to $200 million annually.
The podcasts didn’t solve Spotify’s financial issues, though. The company has always grown fast by any measure, including audience, subscribers, and revenue. But since it paid out a significant share of its revenue to labels and publishers, Spotify never had the profit margins of former Wall Street darlings like Facebook and Netflix. Podcasts were supposed to solve this, but they cost so much up front that they caused a $103 million drag on gross profit, CFO Paul Vogel said during the June presentation.
Last year was difficult for stocks in general, especially those of many technology companies, but Spotify has suffered more than most. Riding high on lockdown-time gains, its share price peaked at $364.59 on Feb. 19, 2021. By a year later, it had fallen 58% to $152.27, and then on Nov. 4, 2022 bottomed out at $69.29 — 81% below its all-time high closing price. Had it made more progress on improving margins, Spotify’s share price probably would have weathered the storm a bit better.
Now, the market will find out if the adage “to cut is to cure” applies to the music streaming business. The layoffs Spotify announced Monday will involve around 600 employees. Not among them is chief content officer Dawn Ostroff, who chose to depart the company. Alex Norström, currently chief freemium business officer, will be responsible for product and will share co-president title with Gustav Söderström, currently chief research & development officer.
Citi analyst Jason Bazinet believes the layoffs are about “trying to stem the losses in podcasting.” Investors aren’t convinced Spotify has a viable business model, he says. “The revenues have done well but there’s not a lot of cash flow. A lot gets paid back to the labels.”
The market’s response to the news was positive, but muted. Spotify shares closed on Monday at $99.94, up 2.1%, after spiking to $104.00 that morning.
Overall, podcasting doesn’t seem to be working as well, or as quickly, as Spotify had hoped. While Spotify beat expectations for subscribers and monthly active users in the third quarter, its gross margin and operating loss were below earlier guidance.
The podcast business is an obvious place for Spotify to start cutting. The company began paring expenses in October by eliminating some original podcasts and cutting “at least” 37 positions at its Parcast and Gimlet studios.
“I think it’s the right strategy,” says Bazinet. “It’s going to be difficult to shift the balance of power with record labels.”
Now, the goal is to make Spotify more efficient, according to CEO Daniel Ek’s open letter released on Monday. “In hindsight, I was too ambitious in investing ahead of our revenue growth,” Ek wrote – meaning investing in personnel, not companies. The layoffs, as well as an organizational restructuring, will both control costs and quicken decision-making, he explained. Ek isn’t alone in highlighting efficiency lately. Facebook CEO Mark Zuckerberg has taken a hard line on underperforming employees. New Twitter CEO Elon Musk expects whatever workers remain at the company to be “extremely hardcore.”
Spotify’s numbers suggest that the company may have room for improvement. Bazinet points out that in 2016 Spotify’s roughly 2,100 employees generated an average of 1.41 million euros per person while in 2021 its 6,600 employees’ per-head revenue was 1.46 million euros. That implies that Spotify failed to achieve the kind of operating leverage that would create additional value as it added employees.
As for Ostroff, her departure could mark the end of the first chapter of Spotify’s podcast business. Neither Spotify nor investors seem to have much appetite for writing big checks these days. And exclusive content seems to have an inherently limited life span. Obama’s Higher Ground Productions left for Amazon. Brené Brown’s two exclusive podcasts, Unlocking Us and Dare to Lead, have come to an end.
Ostroff certainly made her mark on the company, though. The Joe Rogan Experience has battled through controversies to become the platform’s most popular podcast, heard by a quarter of Spotify users; and 19% of all podcast listeners in the U.S. listen to TJRE, according to a recent Morgan Stanley survey. Kardashian’s true crime podcast got off to a great start in October by beating TJRE and Markle’s Archetypes. Spotify’s foray into spoken-word audio may have been costly, but it was effective.
Now, Spotify enters a new phase of cost conscientiousness. With the layoffs and reorganization, it has given investors a tangible commitment to deliver on the aggressive goals it laid out in June. That heightens expectations, though. If Spotify can’t maintain its growth with a slightly smaller headcount, it will be hard for it to deliver better margins – and the market is unlikely to be forgiving.
Lawyers for Latin trap star Anuel AA are heading to a Miami courthouse Tuesday to ask a judge to block his former manager Frabian Eli from selling a $4.8 million Florida mansion — the latest bizarre twist in a nasty legal battle between the “lifelong friends.”
After years of partnership amid rising stardom, the two have suddenly found themselves in an ugly divorce. Eli (full name Frabian Eli Carrion) sued in September, claiming Anuel breached their contracts by abruptly firing him last summer and owes him millions in unpaid fees. The star rapper (real name Emmanuel Gazmey Santiago) fired back with a countersuit in November, accusing Eli of stealing millions in order to “fund his own extravagant lifestyle.”
In the upcoming showdown Tuesday, the lawsuit’s messiness is on full display.
Anuel is seeking an “emergency injunction” that would bar Eli from selling a 6,000-square-foot home in Doral, Fla., worth an alleged $4.8 million — a property the star calls “one of the many illicit purchases made by Carrion using funds from the company’s bank accounts.” Without the order, they claim Eli will sell the house in an effort to avoid paying back the money he stole.
Eli, meanwhile, says the injunction demand is baseless and the latest example of his former friend choosing to “lash out” rather than pay him his fair share of their success: “Nothing more than an attempt to divert the court, and the public monitoring this case, away from the undisputed facts of the case.”
‘Unilaterally Terminated‘
Anuel and Eli worked together for years, starting well before the Puerto Rican rapper released his 2018 debut, Real Hasta la Muerte, and won the 2019 new artist of the year award at the Billboard Latin Music Awards. Eli then managed Anuel through three subsequent albums that all topped Billboard’s Top Latin Albums chart, and the pair also started and operated their own record label.
But just nine months after Eli gushed about his “childhood friend” to Billboard, on Sept. 4 the manager filed a lawsuit against Anuel in Florida state court, alleging he had been “unilaterally terminated” from their shared company, despite a seven-year contract that hadn’t been set to expire until 2026. The deal allegedly entitled Eli to 10% of Anuel’s gross earnings.
In his complaint, Eli said he had been surprised by the move because he had worked tirelessly to advance the star’s career, including during Anuel’s months-long stint in prison after pleading guilty to a gun possession charge.
“That prison sentence did not stop the manager from continuing to believe in the artist and to work towards the continuation of his career, while working for the artist twenty-four hours a day seven days a week, without receiving any pay,” Eli’s lawyers wrote at the time. “Together, the manager and the artist have enjoyed enormous success in the music industry, which due to the manager’s handling of the artist’s affairs, has parlayed into a number of other successes in life.”
Read Eli’s entire lawsuit here.
‘Maliciously Exploited‘
In November, Anuel told his side of the story – and he went a lot further than simply rebutting Eli’s allegations. In his own counter-suit, the star said Eli had been terminated because he had “maliciously exploited” their friendship to “defraud” him out of millions of dollars.
Among other allegations of wrongdoing, Anuel claimed his manager had secretly taken excess money from music agreements with Sony’s The Orchard and with Kobalt; that he had stolen money set aside for tax payments; and that he had secretly made huge personal purchases with company money, like $191,000 toward a Lamborghini, more than $1 million toward jewelry, and an undisclosed sum for renting private jets for his family.
The lawsuit also claimed Eli had taken “kickbacks” in return accepting bad business deals on Anuel’s behalf. For instance, it claimed that when Eli had arranged the purchase of a Miami condo for Anuel’s parents, he had “conspired” with the realtor to pay “a higher than necessary price” in return for a personal payment from the agent.
“In complete and utter contravention of his contractual and fiduciary duties; all reasonable sense of morality; and his years long friendship with artist, which led artist to place his full trust in Carrion, Carrion … bilked counter-plaintiffs out of millions of dollars for which they are rightfully entitled,” Anuel’s lawyers wrote at the time.
Read Anuel’s entire counter-suit here.
‘Losing Out On Millions‘
With the lawsuit and counter-suit both still in the earliest stages of litigation, Anuel threw another bomb in early December — demanding the emergency court order restraining Eli from selling the $4.8 million house in Doral. He claimed that more than $1 million in payments for the Doral house had come from company bank accounts.
In the filing, Anuel’s lawyers warned that Eli was already in “a precarious financial position” and that the property was the only asset they could find under his name. Without a court order requiring him to retain it until the lawsuit was over, the lawyers said there might be no other way for Anuel to recover the allegedly stolen money.
“Counter-plaintiffs risk being successful on its claims, and nonetheless losing out on millions of dollars because [Eli] was permitted to dispose of the property – the sole asset currently in his name – and no longer possessed sufficient assets to cover the value of harm he deliberately and calculatedly took,” they wrote in the Dec. 2 motion.
Eli’s attorneys fired back two weeks later, arguing there was no grounds for an extraordinary order like an injunction freezing the sale of a home. Anuel’s core allegations against Eli, they said, were “simply ludicrous” and “non-sensical” — meaning that he would eventually owe money to their client, not vice-versa.
“This case is really about an artist … that rose to stardom based in part on the work done by the manager, who has now chosen to lash out against the manager with falsities in response to a lawsuit which had to be filed due to the artist’s own irrational actions,” Eli’s attorneys wrote. “Instead of litigating this case on provable facts, with evidence, Anuel is trying to use a ‘kitchen sink approach’ to muddy the waters and cause as much harm as he can.”
Read the entire emergency motion and response here.
Hipgnosis Songs Capital has closed its deal to buy 100% of Justin Bieber‘s publishing, as well as his artist royalties from his master recordings and neighboring rights, Hipgnosis has confirmed. The deal was priced at just north of $200 million, according to a source familiar with the situation, making this the largest rights sale for any artist of Bieber’s generation. It’s also Hipgnosis’ biggest acquisition to date, covering all 290 titles in Bieber’s catalog released prior to Dec. 31, 2021, including his most recent album Justice (2021).
Billboard originally reported in December that a Bieber deal valued at over $200 million was in the works amid founder and chief executive Merck Mercuriadis‘ efforts to “close about $500 million in deals” between mid-November and mid-December. Although Mercuriadis did not say what the deals were at the time, the Bieber acquisition appears to be part of that disclosure.
Following a hot 2021 for catalog sales, with deals like Bruce Springsteen and Paul Simon making headlines and some of the world’s biggest private equity players including Blackstone, KKR and Apollo Global Management all taking stakes in the market, rising interest rates and changes in currency exchanges cooled the sector in 2022. Still, deals have been getting done. Last year, Justin Timberlake, Leonard Cohen, Nile Rodgers, Kenny Chesney, Neil Young and Nelly Furtado all sold some of their rights to Hipgnosis. Sting, David Bowie‘s estate, Phil Collins and his Genesis bandmates, Future, Frank Zappa and Neil Diamond also sold certain assets to investors in 2022.
Typically, newer catalogs like Bieber’s are considered riskier investments since they don’t have as much history behind them to prove staying power. That means they often sell for lower multiples than those of classic acts. Bieber’s success, however, has been undeniable since his 2009 debut album, My World, and the 2010 follow-up My World 2.0, the latter of which topped the Billboard 200 albums chart and included the hit single “Baby.” In all, Bieber has charted eight No. 1 albums on the Billboard 200 chart, including his most recent full-length studio release, 2021’s Justice.
On the Billboard Hot 100 songs chart, Bieber has collected 26 top 10s, including eight No. 1s. His albums have generated 28 million equivalent album units in the U.S., of which 13.2 million are in traditional album sales, according to Luminate. His collected songs billed primarily to him, per Luminate, have generated 16.6 billion on-demand official streams in the U.S.
“The impact of Justin Bieber on global culture over the last 14 years has truly been remarkable,” said Mercuriadis in a statement. “At only 28 years of age, he is one of a handful of defining artists of the streaming era that has revitalized the entire music industry, taking a loyal and worldwide audience with him on a journey from teen phenomenon to culturally important artist. This acquisition ranks among the biggest deals ever made for an artist under the age of 70, such is the power of this incredible catalog that has almost 82 million monthly listeners and over 30 billion streams on Spotify alone. Scooter Braun has helped him build a magnificent catalogue, and it’s a pleasure to welcome Justin and his incredible songs and recordings to the Hipgnosis family.”
“I want to thank Merck and his entire Hipgnosis team and all of our partners involved for working so hard to make this historic deal happen,” says Scooter Braun, Bieber’s manager for 15 years, founder of SB Projects and CEO of HYBE America. “When Justin made the decision to make a catalog deal we quickly found the best partner to preserve and grow this amazing legacy was Merck and Hipgnosis. For over a decade now Justin Bieber has entertained us and moved us with some of the biggest songs in the world. I’m so proud of him and all those involved over the years in helping amass this incredible body of work. Justin is truly a once in a generation artist and that is reflected and acknowledged by the magnitude of this deal. For 15 years I have been grateful to witness this journey and today I am happy for all those involved. Justin’s greatness is just beginning.”
Justin Bieber was represented by Braun, David Bolno of NKSFB, Aaron Rosenberg and Audrey Benoualid of Myman Greenspan Fox Rosenberg Mobasser Younger & Light LLP, and Michael Rhodes of Cooley.
Hipgnosis Songs Capital was represented by William Leibowitz of William R. Leibowitz Law Group, Seth Traxler and Rory Wellever of Kirkland & Ellis LLP, and Robert Fowler and Lisa Ong of H.W. Fisher.
Spotify’s Dawn Ostroff praised the growth of the audio giant’s podcasting expansion shortly after CEO Daniel Ek revealed a major leadership reorganization on Monday morning that will see Ostroff exit the company.
The reorganization, accompanied by a round of layoffs that will impact roughly 600 employees, involves consolidating Spotify’s business operations under co-president Alex Norström, who most recently oversaw the company’s freemium business. Ostroff, who joined Spotify in 2018 from Condé Nast Entertainment, will transition to an adviser role before formally leaving the company as her divisions now fall under Norström’s purview.
In a note to staff, obtained by The Hollywood Reporter, Ostroff praised Norström and reflected on the growth and impact of Spotify’s podcasting team, writing that the platform’s original and exclusive shows — which includes hits like The Joe Rogan Experience, Call Her Daddy and the original series Caso 63 — account for roughly 20 percent despite representing about 0.05 percent of shows on the platform.
“I’m so proud that we’ve built a home for creators to bring their art to the world in ways no one could have previously imagined. And while I’m very much excited about my next step, working alongside and learning so much from so many of you has been a privilege,” Ostroff wrote. “The memories of the moments, the stress, and the laughter we shared have helped me grow and better appreciate the journey … and for that, I will always be grateful. I wish you every success on the next chapter of the Spotify story.”
Read the full memo below.
Looking back on the past four and a half years, I am incredibly proud of what we’ve built together. It’s our best-in-class music operation where we have strengthened our relationships across the business, earned the respect of the industry, and become great partners. The entire music team is the heart and soul of this company.
Working together, our podcasting team has revolutionized the space. This organization’s trajectory has been astonishing, going from practically zero market share and a handful of podcasts, to the leading platform with more than five million podcasts today and a 30x increase in podcast consumption on the platform. And I’m really proud of what we have built with our original and exclusive shows–despite being just .05% of the number of shows on the platform, they account for ~20% of consumption. This includes a string of hits that had Spotify O&E shows occupy 6 of the top 10, and 24 of the top 100 slots on our global charts in 2022. In addition, we’ve learned so much from creators about the opportunities in video as we’ve seen the numbers surge.
Over the past two years, we’ve modernized the advertising business to make it essential to brands and clients. And we have delivered, doubling our ad revenue to well over a billion euros in the process. The technology and innovation that the global ad and sales team has brought to market ensures that there will be billions more to come. That growth is set to change the marketplace forever, especially under the strong leadership of my dear friend Alex, who has my every confidence.
We’ve championed marginalized voices and worked to drive much-needed change in the audio industry. I’m so proud that we’ve built a home for creators to bring their art to the world in ways no one could have previously imagined. And while I’m very much excited about my next step, working alongside and learning so much from so many of you has been a privilege. The memories of the moments, the stress, and the laughter we shared have helped me grow and better appreciate the journey … and for that, I will always be grateful. I wish you every success on the next chapter of the Spotify story.
Dawn
This story was originally published on THR.com.
Don’t expect Live Nation’s Joe Berchtold to be quoting Taylor Swift’s “Anti-Hero” during the Senate Judiciary Committee hearing on ticketing Tuesday. Unlike the pop star’s “I’m the problem it’s me” chorus-turned-meme, the company’s president and CFO plans to take aim at who he says are the real culprits behind Swift’s disastrous Nov. 15 presale — scalpers.
While the Live Nation-owned Ticketmaster was villianized for weeks following the presale for Swift’s upcoming The Eras tour that both broke single-day sales records and threw fans into a fury over service issues, according to a prepared opening statement reviewed by Billboard, Berchtold plans to lay much of the blame on scalpers who used illegal bots to attack the online sale. The statement, to be delivered Tuesday in Washington, D.C., to the committee led by ranking member Dick Durbin (D-Ilinois), details Ticketmaster’s ongoing “arms race” against scalpers illegally using autonomous software to disrupt and attack high profile ticket sales. Country music legend Garth Brooks is lending his support to Berchtold’s testimony as well, with a letter defending Ticketmaster and attacking ticket scalpers who use illegal methods to buy up tickets.
“We knew bots would attack [Swift’s] onsale, and planned accordingly,” reads Berchtold’s planned statement. “We were then hit with three times the amount of bot traffic than we had ever experienced, and for the first time in 400 Verified Fan onsales they came after our Verified Fan access code servers. While the bots failed to penetrate our systems or acquire any tickets, the attack required us to slow down and even pause our sales. This is what led to a terrible consumer experience that we deeply regret.”
Following the Nov. 15 presale, Ticketmaster eventually canceled its general onsale for the remaining 170,000 tickets to Swift’s tour. In December, the company announced a new strategy to sell the passes over the course of four weeks and recently concluded that effort. At the time, the company said “historically unprecedented demand” caused the failure, but blamed bots then, too — saying, 14 million fans and more than 3 billion bots hit the site. That excuse did little to satisfy the more than 100,000 fans who kicked out of line during the bot attack, and even the singer spoke out blaming the company. With many fans calling for Ticketmaster’s punishment, Berchtold also plans to apologize directly to Swift and her followers.
“As we said after the onsale, and I reiterate today, we apologize to the many disappointed fans as well as to Ms. Swift,” his statement reads.
While Berchtold notes Ticketmaster “accepts its responsibility to be the first line of defense against bots in this ever- escalating arms race,” he intends to shift the hearing’s focus to policy changes that could tamp down on scalpers.
“In this forum where we are here to discuss public policy, we also need to recognize how industrial scalpers breaking the law using bots and cyberattacks to try to unfairly gain tickets contributes to an awful consumer experience,” his statement reads. “We are doing everything we can to fight the people who attack our onsales and steal tickets meant for real fans, but we need help passing real reforms to stop this arms race.”
Brooks, in his statement, supports this notion.
“The crush of bots during an on-sale is a huge reason for program failure NO MATTER WHO THE TICKET SELLING COMPANY is,” writes the country icon in his letter addressed to Congress. “And the one who ALWAYS pays for this atrocity is the customer, the LAST one on whom that burden should fall.”
Brooks notes in his letter that he forced Dallas Cowboys owner Jerry Jones to allow him to use Ticketmaster to sell tickets to his April concert at AT&T Stadium, instead of SeatGeek which held the exclusive contract to ticket the stadium.
“I had grown to love and trust the people at Ticketmaster so much,” he explained in his letter, noting, “this was not because of Ticketmaster, but a choice I made.”
Berchtold will be joined on the witness stand by SeatGeek chief executive Jack Groetzinger and longtime Chicago promoter Jerry Mickelson with JAM Productions, along with recording artist Clyde Lawrence and representatives from the James Madison Institute and American Antitrust Institute.
Ticketmaster officials are expecting a pile on, both from Congress and the other testifying witnesses. SeatGeek has filed a number of complaints against Ticketmaster with the Department of Justice for alleged anti-trust violations, and Mickelson testified before Congress in 2010, condemning the merger between Live Nation and Ticketmaster. While company officials aren’t expecting any standing ovations, Berchtold’s testimony will be an important preview of the company’s framing of the challenges facing the business over the next couple of years and promises to be the most detailed defense of Live Nation by an executive in its 18-year history.
Sen. Amy Klobuchar (D-Minnesota) originally called for this hearing in response to public anger over the technical failures of the Taylor Swift Eras ticket sale. But the witness list and the name of the hearing, “That’s the Ticket: Promoting Competition and Protecting Consumers in Live Entertainment,” released Monday (Jan. 23) suggest that the hearing is more likely to focus on long-simmering dissatisfaction over the 2010 consent decree governing the merger of Ticketmaster and Live Nation. That consent decree has had mixed success creating a level playing field for competition in the ticketing business, and critics consider it a failure because it didn’t prevent Ticketmaster from becoming the dominant ticketing company it is today.
“We hear people say that ticketing markets are less competitive today than they were at the time of the Live Nation-Ticketmaster merger. That is simply not true,” reads Berchtold’s statements, claiming Ticketmaster’s market share has decreased since the DOJ estimated it held 80% of the market in 2009.
At the time, Ticketmaster “did not face the level of competition we face today from new competitors including SeatGeek, AEG’s AXS, and Eventbrite, along with established competitors including Tickets.com and Paciolan,” Berchtold continues. “Today, there is intense competition for every ticketing contract that goes out to bid — far more than there was in 2010. Ticketmaster has lost, not gained, market share, and every year competitive bidding results in ticketing companies getting less of the economic value in a ticketing contract while venues and teams get more. The bottom line is that U.S. ticketing markets have never been more competitive than they are today, and we read about new potential entrants all the time.”
Berchtold plans to present the threat posed by bad actors and malicious software as an issue both the government and the private sector must address together. The strategy shifts part of the criticism for the Taylor Swift ticket debacle onto the Senate — which unanimously voted to pass the BOTS act in 2016, effectively outlawing automated ticket-buying technology. Since its passage, the law has only been enforced twice by the FBI and the Federal Trade Commission, despite pleas from Ticketmaster officials that bot attacks on high profile ticket sales are increasing in frequency and complexity, sources tell Billboard. Berchtold also plans to detail how the company has spent more than $1 billion developing technology to prevent bot attacks on the company’s ticket sales using software like Verified Fan and digital ticketing.
A ‘blame the bots’ strategy is not likely to satisfy the members of the Senate Judiciary committee, which include such conservative and liberal firebrands such as Ted Cruz (R-Texas), Josh Hawley (R-Missouri), John Kennedy (R-Louisiana), Diane Fienstein (D-California), Corey Booker (D-New Jersey) and Richard Blumenthal (D-New Jersey). Anti-Ticketmaster sentiment and criticism of the 2010 merger between Ticketmaster and Live Nation is one of the few issues of bipartisan agreement on Capitol Hill.
Berchtold will end his testimony laying out calls to action he believes Congress can take to combat bad actors in the ticketing industry: First, is empowering private parties like Ticketmaster to bring civil actions against ticket sellers who knowingly sell tickets obtained by bots. Second, Berchtold believes Congress should act to outlaw deceptive sales practices like speculative ticket sales “offering for sale tickets you don’t own or have an existing right to obtain,” or deceptive sites that mislabel themselves as “the official” ticket seller for shows they aren’t contracted to work with.
The Senate Judiciary Committee’s “That’s the Ticket: Promoting Competition and Protecting Consumers in Live Entertainment” begins at 10 a.m. EST on Tuesday. Click here to watch the hearing live.
BMG has promoted JoJamie Hahr to executive vp of recorded music, Nashville.
Hahr will oversee day-to-day operations of BMG Recorded Music in Nashville, including BBR Label Group and its roster and imprints Broken Bow Records, Stoney Creek Records and Wheelhouse Records. She will continue reporting to Jon Loba, president of BMG Nashville.
Hahr was promoted to senior vp of BBR Music Group in 2020, where she oversaw all artist strategy, brand partnerships, strategic marketing and digital/creative efforts for BBR Music Group imprints Broken Bow Records, Stoney Creek Records and Wheelhouse Records. She has been with BBR Music Group for eight years. Prior to joining BBR, Hahr served as national director of field promotion for The Valory Music Co., after being promoted from director of Southeast promotion and marketing. Her two decades of music industry experience have also included stints at Universal Music Group, Nashville radio station WSIX and Orlando radio station WWKA.
“I’ve had the good fortune to work with JoJamie for a significant part of her professional life. Whenever she has been given a new opportunity for growth, she has not only met, but exceeded my high expectations,” said Loba in a statement. “She is one of the very best music executives in the industry and this promotion recognizes her many contributions, while at the same time giving her the opportunity to help further grow BMG Nashville, where I have no doubt, she will once again exceed our expectations.”
“It’s a privilege and a blessing to work with our extraordinary artists and our BMG family every day,” added Hahr. “Jon Loba has always encouraged my passion and my growth and I’m thankful for his belief in me. BMG truly puts artists and their music first, and I’m extremely proud of what we all continue to build together in Nashville and beyond.“
Over the past year, BBR Music Group has seen two red-hot artist breakthroughs. In March, Lainey Wilson won new female artist of the year and song of the year at the 2022 ACM Awards, followed by wins for female vocalist of the year and new artist of the year at the 2022 CMA Awards in November. Meanwhile, Jelly Roll just earned his first No. 1 single on Billboard‘s Country Airplay chart with “Son of a Sinner” after previously earning his first No. 1 single on Billboard‘s Mainstream Rock Airplay chart with “Dead Man Walking.” The singer has also a total of spent 22 weeks atop Billboard‘s Emerging Artists chart. Elsewhere, three-time ACM entertainer of the year winner Jason Aldean earned his 25th No. 1 Country Airplay hit in May.
On Sunday (Jan. 21), longtime and beloved Chicago radio host Lin Brehmer died at 68 after battling prostate cancer.
Brehmer’s WXRT colleague and friend Terri Hemmert shared the news in a statement that read: “We must inform you that we all lost our best friend. Lin Brehmer fought cancer as long as he could. He passed early this morning, peacefully, with his wife (Sara) and son (Wilson) by his side.”
Brehmer announced he would take a leave of absence last July for treatment. He returned to the air in late November.
Adopting the tagline, “Your best friend in the whole world” during his time at WXRT, the sentiment was true for many, including Chicago legends like Wilco, Steve Albini, Billy Corgan, John Cusack and more. It wasn’t Brehmer’s only catchphrase. He often reminded listeners: “Take nothing for granted. It’s great to be alive.”
Brehmer started as a host at the Chicago rock station in 1991 after moving to the city in 1984 to be the music director, a position he held for six years. After a brief gig in Minneapolis, he returned to Chicago and WXRT — this time as the morning host. There he launched his legendary segment Lin’s Bin, through which he would excitedly and thoroughly answer listener questions while musing on life, music and pop culture. In 2020, he moved to middays.
A New York native, Brehmer started his career in Albany before relocating to and falling for the city of Chicago — from the Cubs baseball team to the food, whether it be an Italian beef sandwich or pizza. To honor the late Brehmer, the marquee at Wrigley Field (home of the Cubs) displayed his name.
WXRT celebrated Brehmer’s life with a special block of programming on Monday. Alongside stories from Hemmert and other hosts, plus special memories and send-offs from artists and bands like Corgan, The Record Company and more, the programming played a range of music that was meaningful to his life and career. It also aired Brehmer’s final sign-off for the station.
In it, he recounted being asked if he would change anything about his path. In short, the answer was an affirmative — and colorful — “no way.”
See the social media tributes to Brehmer below.
RIP to Chicago legend Lin Brehmer who sadly just passed away – he was the voice of WXRT – the best music station in Chicago – the kindest man you could ever meet – a lifelong cubs fanatic – and one of coolest warmest guy you could ever meet – He was truly Chicago’s finest –— John Cusack (@johncusack) January 23, 2023
The Cubs mourn the passing of legendary Chicago radio personality and lifelong Cubs fan Lin Brehmer.We send our condolences to his family and friends. pic.twitter.com/2SiHRmacxY— Chicago Cubs (@Cubs) January 22, 2023
Lin, what a beautiful soul. Pure walking magic, an encyclopedia of music, and friend to all. Thank you, you will be so missed. Our condolences to all who knew Lin and the whole city of Chicago. 💙 @93XRT @LinBrehmer https://t.co/TDbKAZXFmf— The Record Company (@therecordcomp) January 22, 2023
Lin Brehmer was the voice of Chicago. His voice was unique and a perfect way to start the day. An ambassador for the city’s music scene and a dear friend, I announced the Uptown music district concept on his show.I’ll miss hearing his voice on XRT. May his memory be a blessing.— Rahm Emanuel (@RahmEmanuel) January 22, 2023