ticket sales
The Coachella Valley Music and Arts Festival’s first of two weekends has now sold out of general admission tickets, according to promoter Goldenvoice. Once known for selling out on the same day that the lineup was released, this year, the festival took exactly 27 days, four hours and 38 minutes to sell approximately 125,000 tickets […]
Olivia Rodrigo is proving that artists don’t need expensive technology or a sprawling staff to make sure their lowest-priced tickets end up in the hands of fans — and not scalpers.
Ticket brokers were crawling around Rodrigo’s website on Wednesday (Sept. 13), assessing their odds of scoring tickets for the superstar’s freshly announced Guts World Tour, which kicks off in February at Acrisure Arena in Palm Springs, Calif. An early spring tour headlined by Rodrigo is a pretty good bet for ticket resellers based on the singer’s continued chart success: “Vampire,” the first single from her new album, Guts, is currently enjoying its 10th week on the Hot 100, while the set’s second single, “Bad Idea Right?”, debuted in the top 10 last month. Meanwhile, the album itself earned more than 126 million on-demand streams in its first four days of release. More importantly, her 2022 Sour trek was an underplay first run tour — Rodrigo had kept her ticket prices reasonable, averaging about $75 a ticket — that saw demand far exceed supply and drove prices into the stratosphere.
For Guts, Rodrigo is taking a simple, innovative step to protect what she is calling “Silver Star tickets,” a two-seat package she’s selling for $40 a pop to individuals her team can verify as fans.
Needless to say, scalpers will want to get in on that. A $20 ticket to a high-demand concert can generate a big markup and quick profits, especially compared to tickets priced between $50 to $200 — the price range for the Live Nation-booked tour. Tickets in the $50 to $200 range, meanwhile, will leave some room for markup on resale sites but make profitability less certain, especially on top-tier tickets.
To pull this off, like a game of cat and mouse, Rodrigo’s team must keep the Silver Star tickets out of scalper’s hands for the program to be a success. Few details about how this will work have been made public, but Rodrigo’s registration site hints that the singer’s team will directly select fans to participate. The real innovation, however, is a requirement that fans pick up their $20 tickets at will call on the night of the show; only then will they learn where their seats are located.
That’s not too different from how box offices used to use will call-only pick up to fight scalping, but where that strategy would typically aim to protect the most expensive tickets this time it’s being used on the cheapest. The limited number of tickets involved here will also help keep from overwhelming staff, whereas previously such a strategies became an unmanageable burden. Meanwhile, not knowing the section or row of a ticket makes it very difficult to sell it on secondary sales websites like StubHub, which requires scalpers to list tickets in the general vicinity of where they are located.
The plan isn’t fool-proof — when it comes to resellers, nothing is — but it places enough hurdles in front of scalpers that most will hopefully be deterred from taking advantage of a program that’s meant to get discount tickets into the hands of fans who otherwise wouldn’t be able to afford to see Rodrigo in concert. And if the strategy is successful, it’s easy to see it being duplicated by other artists, whose biggest frustration with ticketing tends not to be that their best seats are landing on the secondary market, but that seats affordable to their younger and less economically advantaged fans are ending up there too.
Of all Jimmy Buffett‘s accomplishments, from classic hits such as “Margaritaville” and “Changes In Latitudes, Changes In Attitudes” to building a billion-dollar travel-and-lifestyle empire, one of the biggest was an unprecedented, decades-long amphitheater deal in which he received a whopping 105% of the gross ticket receipts. This anti-mathematical trick stunned the concert business.
“Early in our careers, we would all whisper about Buffett’s rumored deal. Could he possibly be getting not just the lion’s share of the show profits, but all of the box-office gross? Or in some cases more than the box-office gross? What?” asks Fielding Logan, a Q Prime manager who represents country star Eric Church. “Like a mythical white whale, we’ve been chasing that deal ever since.”
How did Buffett, who died Friday at 76, pull off this legendary deal, which several concert-industry sources confirm was in place through his very last amphitheater tours?
In the late 1990s, when SFX Entertainment bought out promoters around the country, the new concert-business giant offered touring stars huge payments to anchor its summer-amphitheater lineup — and avoid losing them to rival companies. Back then, artists were asking — and receiving — 90% of the net ticket sales after expenses, leaving 10% to the promoter.
Buffett took this trend to a new level on his annual summer runs, which drew more than 3.9 million fans and grossed $215.4 million over 196 shows in the 2000s, according to Billboard Boxscore. “Here’s the thing about Jimmy: 90-10 wasn’t good enough for him. He started demanding 105%! All of the gate plus 5% of the gross,” Barry Fey, the late Denver promoter who competed with SFX at the end of his career, wrote in his 2011 book Backstage Past.
Promoters agreed, knowing they could take a cut of ancillary revenues, like parking, food and ticket service charges and — especially with Buffett’s hard-partying Parrotheads — alcohol. “It worked out for me and the other promoters because of beer sales,” Fey wrote.
In 2000, Clear Channel Communications bought SFX, then spun off the concert-promotion business into a new company known as Live Nation — which maintained his deal, sources say. So, for example, in 2005, when Buffett’s show at Arrowhead Pond (now the Honda Center) in Anaheim, Calif., made $1.13 million at the box office, according to Billboard Boxscore, Buffett would have taken home roughly $1.136 million.
Buffett, who toured through spring 2023, set a financial precedent that younger stars, such as country singer Kenny Chesney, were able to replicate, according to sources. “Jimmy was a key artist in establishing and solidifying the amphitheater model,” says Brock Holt, a longtime Nashville promoter who is now a touring consultant, “and opened the doors for a higher financial return for artists.”
“He was the only one who had the leverage to do it. He toured perennially and did the same amount of business each time. The Parrotheads came out. It was a yearly ritual,” says Randy Phillips, former CEO of promoter AEG Live, and now a consultant for Silver Lake, an investment group whose portfolio includes Madison Square Garden Sports and Endeavor. “He was the anchor to Live Nation’s schedule so it was really critical. He used that to negotiate.”
Buffett’s longtime touring reps, including Live Nation, attorney Joel Katz and agent Howard Rose, did not respond to requests for comment.
As 2023 heads into summer, multiple signs point to a healthy and growing live music business for the rest of the year. In recent weeks, executives from the publicly traded concert promotion and ticketing companies have signaled that surging consumer demand won’t slow down, and there will be enough tours to satiate music fans’ appetite for live events.
Demand has been strong “and is showing no signs of letting up,” said Live Nation CEO Michael Rapino during the company’s May 4 earnings call. Live Nation expects to sell more than 600 million tickets in 2023, up from 550 million in 2022. To date, the concert promoter has sold more than 100 million tickets to Live Nation events, a 20% increase from the prior-year period, and expects to host a record number of fans in 2023.
Vivid Seats, the publicly traded secondary ticketing marketplace, shares Live Nation’s sentiment. “Consumers continued to crave live experiences in the first quarter,” said CEO Stan Chia during a May 9 earnings call, “and we believe this trend will continue for many years.” Vivid Seats does business primarily in the U.S. while German promoter and ticketing provider CTS Eventim focuses on Europe. “Both in Germany and internationally, we are pursuing organic growth and anticipate that our business performance will continue on its successful course,” said CTS Eventim CEO Klaus-Peter Schulenberg in the quarterly results released May 24 that reiterated the positive outlook in its 2022 annual report of “moderately higher earnings” for the live entertainment segment 2023.
The concert business is meeting — and perhaps surpassing — some lofty expectations. In 2022, as the concert business exited the pandemic, the widespread belief was that pent-up demand for in-person experiences would drive the concert business beyond pre-pandemic levels. That turned out to be true. Concert promoter Live Nation posted record revenue of $6.2 billion in the third quarter that was 67% above the same period in 2019. What’s more, the volume of fans returning to concert venues was augmented by an unmatched willingness to absorb higher prices. Frenzied demand — and sky-high prices on the secondary market — for tours by Taylor Swift, Beyonce and Bruce Springsteen have showed A-list artists have yet to find their ceiling on prices.
Concert promoters have posted strong quarterly earnings that fit their narratives. Live Nation’s first-quarter revenue was up 71% to $3.1 billion. CTS Eventim’s online ticket sales increased 58% to 18 million as consolidated revenue improved 163% to 366.2 million euros ($393 million). At Vivid Seats, which also does business in major sports such as baseball and basketball, first quarter revenue grew 23.2% to $161 million and adjusted earnings before interest, taxes, depreciation and amortization doubled to $42.4 million.
Investors absorb past earnings history while figuring out what to expect in the future, and according to JP Morgan analyst David Karnovky they often ask two questions about Live Nation: First, is there enough supply to meet growing, healthy demand? Yes, Live Nation president and CFO Joe Berchtold said at JP Morgan’s Global Technology, Media and Communications conference on Tuesday. That’s because global streaming platforms such as Spotify and social media apps like Instagram and TikTok allow artists to build global followings in ways that weren’t previously possible, he explained. K-pop and other up-and-coming genres of music “that maybe once were regional are now going global,” he said, and artists that used to sell out mid-sized venues are now selling out stadiums. “So, you’re seeing that supply continue to build.”
The second thing investors want to know is how demand will respond during a softer economy. Live Nation closely follows the indicators — such as on-sales show closings — Berchtold said, “but we’re not seeing anything that gives us pause.” Separately, Berchtold noted that Live Nation’s research indicates getting back to concerts are one of fans’ top priorities after the pandemic and will be “one of the last things they’re going to cut back on.”
Vivid Seats CFO Lawrence Fey also addressed the possibility of an economic downturn — a scenario becoming increasingly likely in the U.S. should Congress fail to find a compromise to raise the debt ceiling by early June. “[T]here’s a lot of chatter and concern out there” that demand will weaken “in the not-too-distant future,” said Fey, “but it continues to be the case that we’re seeing very robust demand across our event categories [and] across price points.” Beyond the consistently strong demand, Vivid Seats has “been pleasantly surprised by the supply calendar,” particularly a concert schedule that includes recently announced tours by Drake and Aerosmith, he added, “and [that] gives us optimism.”
SeatGeek executives were scrambling to recover from an unforced error earlier this month when two discount codes leaked on social media granting users $500 discounts on the secondary ticketing marketplace. After about a half-hour of frenzied buying, the ticket resale site was forced to cancel thousands of sales and cover costs incurred by untold numbers of brokers.
The source of those troublesome codes? SeatGeek created the codes for a business conference for Major League Baseball box office managers and ticketing staff, sources tell Billboard — three months after SeatGeek signed a reported $100 million, five-year deal to take over from rival StubHub as the league’s official ticket reseller.
The $500 discount codes — “MLB1” and “MLB2” — were originally given out as prizes for a team building exercise during the event on May 3 at Globe Life Stadium in Arlington, Texas, home to the Texas Rangers. Known to most in the sports ticketing industry as the Baseball Ticketing and Marketing Meetings, the summit is a typically low key affair where baseball ticketing staff come together to network, share ideas and meet with league vendors. SeatGeek representatives were present at the meeting to discuss their new agreement with the league, according to multiple sources. The two discount codes did not include any expiration date or limit on how many times they could be used.
Nine days after the summit, the codes leaked onto the internet and quickly spread across social media. The first instance of the code sharing on Twitter on May 12 at 11:29 p.m. EST appears to have come from an account linked to a sports gambler named Drew Morgan, writing, “I just got 2 tickets to 2 different Steelers games 100% free on SeatGeek. Sounds too good to be true but there was zero catch at all.”
Holy shit I just got 2 tickets to 2 different Steelers games 100% free on Seat Geek. Sounds too good to be true but there was zero catch at all 🤯Use codes MLB1 or MLB2 for a $500 discount on the tickets. I have no incentive at all to promote this. My friend told me about… pic.twitter.com/8G6ELGHPkn— Drew Morgan (@DMProps) May 13, 2023
Three minutes later, an account calling itself “Lord Restock” with 168,000 followers posted the codes, kicking off a frenzy of fans using the codes to buy tickets to sporting events, SZA concerts and more.
Around midnight, SeatGeek staff noticed the frenzied use of the $500 discount code and took the SeatGeek site offline to investigate what was happening. The site remained offline for several hours before the issue with the codes was identified and the codes were deactivated.
A SeatGeek spokesperson declined to comment on specifics about the code leaks, but told Billboard in a statement, “Last week, some fans made purchases on our site using an ineligible promo code that was wrongfully distributed without authorization. Tickets acquired via these purchases are not valid and we are working to resolve each situation accordingly.”
Officials with Major League Baseball did not respond to Billboard’s inquiries about the SeatGeek ticket codes and how they leaked online.
In the days following, SeatGeek staff began contacting ticket sellers on the site, laying out plans to cancel any transactions that used the leaked discount codes, refund any money that was spent in transactions using the codes and claw back any tickets possible before they reached fans.
“At this stage, we have been able to contain the impact to SeatGeek, but that came at the cost of an operational burden that you have all helped us to shoulder,” company co-founder Russ D’Souza wrote in an email to ticket broker Randall Smith, CEO of America’s Top Tix, and obtained by Billboard.
SeatGeek operates as both a primary ticketing site for a number of sports teams, as well as a massive secondary ticketing site where tens of thousands of brokers list tickets for resale for concerts, sporting events and festivals. The company implemented a triage system to respond to the code leak, where sales made for teams that use the SeatGeek ticketing system could easily be canceled and reversed. Sales for tickets that haven’t been delivered yet will also be canceled.
Tickets originally issued by rival companies like Ticketmaster, however, were more difficult to claw back. While Ticketmaster technology does allow resellers to digitally transfer tickets from seller to buyer – a process SeatGeek can automate to occur immediately after a sale on its site is made – it can’t transfer the ticket back to the seller if an error is discovered. Because of this, SeatGeek is now covering any losses incurred by brokers who now must reselling tickets issued by Ticketmaster and other services.
As a result, dozens and maybe hundreds of fans who received Ticketmaster-issued tickets using the SeatGeek discount code are now in possession of tickets that can’t be canceled. Since the code was discovered and taken down, many of these fans have taken to Twitter asking other fans if they think the tickets are still valid.
Brokers on the site are also angry, saying SeatGeek took too long to respond to the crisis and should have to pay the same 100% fine it charges its own sellers when customer service mistakes are made.
“If a broker makes an error and cancels an order, they are penalized. If the exchange that dings you makes an error, they unilaterally effectuate a mutual cancelation without consent of the broker,” one reseller wrote on a forum for brokers. “It is a totally one-sided relationship, and I really hope customers, brokers, or both bring a well-deserved class action against SG.”
SeatGeek is the second largest ticket resale site in the United States and last year raised $238 million in Series E funding. A recently abandoned effort to take the company public valued it at $1.35 billion.
Tickets for Taylor Swift’s Eras Tour are being protected by some of the most advanced ticketing technology ever created, but it’s done little to stop some Swifties from falling victim to fraud.
With what’s likely to be the year’s most in-demand tour has come a wave of online scams that mix high-tech identity theft with low-tech social engineering to target frustrated fans unable to buy tickets during the initial sale in November. Now ticket prices are going for up to 10-times face value on secondary sites and many fans are desperately looking for more affordable options. That’s also leaving them vulnerable to too-good-to-be-true swindlers selling fake tickets. In many cases, the fans don’t even realize they were ripped off until they get to the show.
Nationwide, consumer fraud was up 30% in 2022 over 2021, according to the Federal Trade Commission, costing consumers $8.8 billion. Fake ticket scams fall under what the FTC labels as “imposter scams,” second in total cost only to investor scams according to the FTC, which notes that individuals aged 30-39 are the most likely to be defrauded in 2023 with social media sites listed as the most common place where fraud occurs. The targeting of Taylor Swift fans and offering cheap tickets the seller doesn’t have (and then disappearing on the buyer after they send over the money) is in part due to enormous publicity around the tour and the huge demand for tickets and low supply.
“Con artists will seize any opportunity to rip people off and as soon as the tours for Taylor Swift or artists Beyoncé or The Cure were even announced, scammers trying to figure out ways to capitalize on people’s desperation to get tickets,” says Teresa Murray, a consumer watchdog with the Denver-based Public Interest Research Group. Murray says her group saw an uptick in forged barcodes, fake websites and spoofs on legitimate sights like StubHub and Ticketmaster popping up hoping to profit off the frenzy around the Eras tour.
Fans who have fallen victim to Taylor Swift ticket fraud often say they are lured into the scam through a post on Facebook, listed on regional group pages from seemingly legitimate accounts offering to sell tickets for an upcoming Swift show below the current asking price on secondary ticket markets.
“When you have people who are desperate [to buy tickets] and vulnerable to fraud, they tend to suspend their common sense and make decisions they wouldn’t normally make,” says Murray, adding that this type of fraud is perpetrated by both “people living in their mom’s basement” and sophisticated criminal groups operating in an organized manner.
What victims do not realize is that instead of talking to person living in their city, they are often talking to a hacker who has recently taken over someone’s Facebook account to appear like a real person with ties in the community. After some back and forth, the scammer convinces the victim to send them money though a cash app like Venmo or Zelle in exchange for tickets that either never arrive or are obvious fakes.
This increase in fraud is happening against a backdrop of transformative technology at Ticketmaster, deployed at a large scale for the Eras tour with the potential to drastically reduce and even eliminate most instances of ticket fraud. Whereas it used to be fraudsters could buy a print-at-home ticket and then sell multiple copies of that, Ticketmaster is now employing its Safetix technology for Swift’s tour and others to issue digital tickets that live exclusively within the Ticketmaster app and are impossible to duplicate in this way. Safetix creates an entire digital ecosystem around the life of the ticket, from its original purchase, through resale and up until the ticket is redeemed on the night of the show. The scam Swift fans describe operates completely outside of that ecosystem, without any protections for consumers.
For scammers, demanding payment upfront is a low-tech way to defeat an otherwise sophisticated security system. The only way to curb this type of fraud, Murray says, is to educate fans on how digital tickets work. Much of Ticketmaster’s consumer education efforts have focused on Swift fans who successfully bought tickets and need to know how to load tickets into their accounts, transfer them to friends and redeem the tickets on show night. While this effort to educate fans is important, it does little to inform fans who were unable to buy during the public sale so that they are better equipped to avoid being sold fake tickets when they attempt to buy secondary tickets
Murray recommends only purchasing resale tickets from official sellers with a clearly visible fan guarantee listed on their site, to only use credit cards (not debit cards) and to match up the seats being sold with a seat map of the venue to verify the seats and rows actually exist.
“Often times the con artists don’t bother to check if the seating section, row and seat numbers they claim to hold tickets for actually exist on a seat map,” Murray says. “A little research on your own might help you determine if the tickets being offered actually exist.”
Sens. Amy Klobuchar and Richard Blumenthal’s new legislation aims to take on Ticketmaster by clamping down on the use of long-term contracts to lock up the exclusive ticketing rights of U.S. venues and festivals. But it could backfire in a way that would negatively affect venues and fans.
Titled the Unlocking Ticketing Markets Act, the legislation — introduced on the same day as a second bill from Sens. Maria Cantwell (D-Wash.) and Ted Cruz (R-Texas) that would ban hidden ticket fees — is a clear attempt to break Ticketmaster’s grip on the ticketing industry, although it never actually mentions the Live Nation-owned company by name. (A press release announcing the Unlocking Ticket Markets Act says today’s concert marketplace is dominated “by one company” with a “70-80 percent market share” thanks in part to the long-term contracts its clients sign for its services.) But while Klobuchar and Blumental believe shortening ticketing contracts will promote competition, the proposal doesn’t seem to consider the benefits these contracts offer the venue clients.
Ever since Ticketmaster dethroned Ticketron as the top ticket seller in the 1980s, the company has built its dominance by offering large upfront cash payments in exchange for exclusive deals. This practice has become commonplace from ticketing companies in live entertainment, and venues and sports teams have come to rely on these advances — which can equal hundreds of thousands of dollars for smaller venues and millions of dollars for arenas and stadiums, increasing in value based on the length of the term — that are paid off over the term of the deal through fees added to the face value of each ticket.
This is a bargaining tool the ticketing companies use to acquire more venue customers, but within that, it’s at the venues’ discretion what kind of deal to take, passing the cost of that loan onto their customers as ticketing fees. If venues haven’t repaid the advance at the end of the contract term, they typically have two options: cut a check to the ticketing company to cover the difference or re-up their deal and borrow more money.
Klobuchar and Blumenthal’s bill would essentially shorten the length of the exclusive ticketing contracts by ordering the Federal Trade Commission to “prevent the use of excessively long multi-year exclusive contracts,” according to a press release announcing the proposed legislation. (The text of the Unlocking Ticketing Markets Act is not public, so it’s not clear how “excessively long” is defined, though average ticketing contracts are about five to six years.) If the FTC opted to limit ticketing to half of the average terms, Ticketmaster’s competitors would have twice as many opportunities to bid for those contracts the company holds.
Shorter contracts would either mean less money for venues, or greater risk that they would fail to repay the advances — in which case venues would either need to repay the remaining balance or negotiate that debt into a contract renewal. For example, a temporary four-month downturn in business is going to have a greater impact on a two-year, $2 million loan than it would on a four-year, $4 million loan. To protect themselves, ticketing companies would likely increase the fees added to tickets to recoup faster, thereby reducing the heightened risk of default — likely meaning higher costs to consumers.
A bill focused on contract length also fails to address long-standing complaints that venues often work with Ticketmaster because of a perception that it means parent company Live Nation will bring more events to their building. This sort of business practice is prohibited under the consent decree that has governed Live Nation and Ticketmaster’s operations since merging in 2010, but that hasn’t stopped accusations of anticompetitive behavior. While Live Nation has long denied this charge, during a January Senate Judiciary hearing probing Ticketmaster’s botched sale for Taylor Swift’s Eras Tour, Sens. Klobuchar and Blumenthal indicated they believed that Ticketmaster’s relationship with Live Nation was the main reason Ticketmaster held a such a large market share of the ticketing business. Term lengths of the company’s contracts, however, were rarely mentioned.
In response to the introduction of the Unlocking Ticketing Markets Act, a Ticketmaster spokesperson told Billboard, “The ticketing industry is more competitive than ever. Ticketmaster wins business because it offers the best product available for venues, and the length of contracts is generally decided by venues and the guaranteed payments they want to help support their expenses. We do not expect any of the proposed changes to have a material impact on our business as we historically add clients in competitive marketplaces.”
Changing the terms of those loans, as Klobuchar and Blumenthal seek to do by limiting exclusive ticketing deals, could either cause venues to earn less money on the ticketing deals or increase the fees they charge consumers to repay those loans — making ticket prices even more expensive in a climate where most Americans already feel they’re paying too much.
Two new bills introduced to the Senate Wednesday aim to clean up the ticketing industry and address long-standing criticisms about Ticketmaster’s dominance over the primary ticketing market.
The TICKET ACT, introduced by Sens. Maria Cantwell (D-Wash.) and Ted Cruz (R-Texas) — chair and ranking member of Chair of the Senate Committee on Commerce, Science and Transportation, respectively — would ban hidden ticket fees, requiring vendors to display the total price of a ticket up front. These fees can sometimes increase the purchase price by as much as 60% or higher. For example, some tickets in the upper seating section for Luke Combs‘ current stadium tour being sold by Ticketmaster are marked up more than 100% when fees and taxes are added to the face value.
The bill would also attempt to reign in speculative ticket sales, a heavily criticized sales technique used by ticket scalpers to maximize profits. Speculative ticket selling is the practice of selling a ticket one does not own, often at the height of the market, and then waiting until the price drops to procure and deliver the ticket to the consumer. The TICKET ACT would require scalpers to display in a “clear and conspicuous manner” that the ticket seller does not actually possess the ticket at the time the ticket is listed for sale.
Recent ticketing legislation proposals by both Live Nation and the National Independent Talent Organization have called for a ban of speculative ticketing – with several prominent music industry executives comparing the practice to fraud.
The other bill, the Unlocking Ticketing Markets Act, was presented by longtime Ticketmaster critics Sens. Amy Klobuchar (D-Minn.) and Richard Blumenthal (D-Conn.), seeking to limit the use and scope of exclusive multi-year ticketing contracts in live entertainment. The legislation is aimed at Ticketmaster, which “by some estimates has locked up 70 to 80 percent market share and has used its dominance to pressure venues to agree to ticketing contracts that last up to ten years, insulating it from competition,” explains a press release from Klobuchar’s office announcing the legislation.
It follows a January Senate Judiciary Committee hearing probing the cause of the Ticketmaster Taylor Swift crash. During the hearing, Ticketmaster was regular criticized by the committee for the company’s dominate market share of the U.S. ticketing industry, with several senators accusing the company of acting like a monopoly.
The Unlocking Ticketing Markets Act would empower “the Federal Trade Commission to prevent the use of excessively long multi-year exclusive contracts that lock out competitors, decrease incentives to innovate new services, and increase costs for fans.”
The text of the Unlocking Ticketing Markets Acts has not yet been released to the public and it’s unclear how the bill would define excessively long contracts. In a press release announcing the legislation, Klobuchar’s office noted that some exclusive ticketing contracts last as long as ten years, but the average contract term in sports and live entertainment is typically five to seven years, according to multiple sources, including the often-cited Ticketmaster vs. Tickets.com lawsuit from 2003.
Sens. Richard Blumenthal (D-CT) and Sheldon Whitehouse (D-RI) responded to President Joe Biden’s calls for fairness and transparency in ticketing fees by introducing the Junk Fee Prevention Act on Wednesday (March 22). While the proposed legislation goes beyond live music, it would transform how concert tickets are sold and attempts to reduce fees that inflate tickets’ face values.
“Concealed surprise fees — nickel and diming Americans to distraction — must be stopped,” Blumenthal said in a statement.
“Consumers are charged hidden fees when purchasing everything from flights to concert tickets,” added Whitehouse. “Our Junk Fee Prevention Act would provide consumers with the transparency they deserve when making a purchase.”
Biden urged Congress to pass legislation addressing “junk fees” during his Feb. 7 State of the Union address, pledging to cap fees on concert tickets and make companies disclose all-in prices upfront. “Americans are tired of being played for suckers,” he said. “Pass the Junk Fee Prevention Act so companies stop ripping us off.”
Blumenthal and Whitehouse’s proposed legislation would at least improve transparency. Ticketing companies would be required to “clearly and conspicuously” display the total price of a ticket with all fees included “in each advertisement and when a price is first shown to a consumer.”
While the legislation targets concert ticket fees and some re-sale tactics, it’s more than a reaction to Taylor Swift’s botched Eras Tour presale that prompted a Senate hearing on Ticketmaster’s business practices. The Junk Fee Prevention Act seeks to prevent companies from applying or advertising “any mandatory fees that are excessive or deceptive” for any good or service. It also targets fees for airline tickets and short-term housing such as hotels and vacation rentals, and would require airlines to seat parents next to their young children.
Transparency is a key theme of the Junk Fee Prevention Act. It includes a requirement to disclose the total number of tickets being offered for a concert, theater event, sporting event or other events “at a place of public amusement of any kind.” Both lawmakers and consumers have long complained that many concert tickets are held back for fan clubs, commercial partners like credit card companies and VIP packages.
Many of the changes sought in the Junk Fee Prevention Act are also found in the FAIR Ticketing Reforms, a set of “common sense” measures introduced on March 8 by a group of leading music companies including Live Nation, Universal Music Group and Red Light Management. FAIR Ticketing Reforms also calls for an end to speculative selling on secondary markets and mandatory all-in pricing. Unlike the Junk Fee Prevention Act, FAIR Ticketing Reforms also calls for stricter measures against automated bots and policing and fining resale sites that serve as a safe haven for scalpers.
Any person who violates the Junk Fee Prevention Act would be subject to the penalties of the Federal Trade Commission Act. A state attorney general can also bring a civil action if a violation affects residents of that state. In determining whether a fee is excessive, the bill asks the Federal Trade Commission or court to consider whether the fee is “reasonable and proportional” to the cost of a ticket and the reason for the fee. The FTC or court can also consider “any other factors determined appropriate.”
A mandatory fee is defined as any fee required to purchase a ticket, is not “reasonably avoidable,” is not expected to be included by a “reasonable consumer” or “any other fee or surcharge determined appropriate” by the FTC. Within 180 days of the bill’s enactment, the FTC would commence a rule making proceeding to consider whether and how the Federal Communications Commission should require disclosure of mandatory fees or prohibit companies from charging mandatory fees.
After weeks of strategizing how to salvage Ticketmaster’s reputation in the wake of last November’s Taylor Swift presale debacle and Live Nation president/CFO Joe Berchtold’s January grilling by the Senate Judiciary Committee, the ticketing giant’s parent company has settled on an approach that will ramp up lobbying to hit back at scalpers while educating consumers about ticketing fees.
Despite breaking two company records with the Nov. 15 The Eras Tour presale — the most tickets ever sold in a single day (2.4 million) and, according to the company, keeping 95% of those tickets off secondary sites like StubHub and SeatGeek — Ticketmaster found itself cast as the villain and Live Nation as a monopoly after a cyberattack disrupted over 100,000 transactions.
The outcry has led to a mixture of disbelief and self-reflection at Live Nation’s global headquarters in Beverly Hills, Calif. “The company enables music fans to connect with the world’s greatest artists through concerts and events that often become the cornerstone moments of people’s lives,” says a Live Nation executive who was not authorized to speak on the record. “Why the fuck do people hate us so much?”
Although the controversy over the Swift presale had to do with ticket availability rather than price — the prime complaint of Ticketmaster’s July 2022 Verified Fan sale of tickets to Bruce Springsteen’s 2023 tour — the executive says that Live Nation has determined that redeeming itself with consumers “starts with the fees,” which can add over 30% to the final price of a concert ticket.
“We’ve got to now go out and do a much better job so policymakers and consumers understand how the business operates,” Live Nation president/CEO Michael Rapino said during the company’s most recent investor call. “We’ve historically not had a big incentive to shout out loud that venues are charging high service fees or artist costs are expensive. But I think now [that] education is paramount.”
Ticketmaster’s main source of revenue comes from the fees it charges to process ticket transactions. A ticket’s face value goes to the artist, while the ticketing giant shares the fees it collects with the venues that contract for its services.
Ticketmaster typically keeps $2 to $5 per ticket for processing costs and a small portion of the fees it collects to recoup any loans, advances or bonuses it may have paid the venue to win its ticketing contract. Contracts for large venues can be worth millions of dollars. The balance of the fees collected goes to the venue, which uses the money to cover the cost of the show.
Traditionally, promoters book venues for artists, pay rent to use the space and hire its staff. What’s left over as profit is divvied up with the act, which typically receives 80% to 85% of that amount.
But as competition to book top-shelf headline talent has increased over the last decade, venues have reduced the rent they charge and promoters have agreed to take a smaller percentage of base ticket sales — sometimes as little as 5%.
As Rapino said on the investor call: “The artist takes most of that ticket fee base. So the way that the venue, the promoter or the ticketing company [earns its] revenue fees is through that extra fee.”
The increasing costs of concert production, which are borne by the promoter, have also wid- ened the gap between a ticket’s face value and the final amount charged after fees, which can induce sticker shock when two $100 tickets can end up costing $265. While it has been very profitable for Ticketmaster to cover more of a concert’s costs through these fees, it has helped turn ticket buyers against the company.
Ticketmaster executives are hoping a simple fix can solve the problem — showing the total cost of a ticket, face value plus fees, at the be- ginning of the checkout process. That method is already used in New York, where it is mandated by state law.
“We all want to know what is the true cost to see the show when we start shopping,” Rapino said on the call. “We wish that would be mandated tomorrow across the board [because] that would relieve a lot of the stress [and] the consumer’s perception that there’s this magical extra fee added on” that isn’t part of the overall show cost.
Ticketmaster and other ticketing companies have long debated whether to abandon what’s known as a “drip pricing” model but haven’t pulled the trigger because studies show that fans are more likely to make a purchase if the fees that are tacked onto the face value of a ticket don’t appear until checkout. Secondary-market ticketing companies have also adopted the practice, advertising tickets at prices below those sold on the primary market, then hitting consumers with a 35% to 45% markup at checkout.
In a move more closely tied to the Swift situation, Ticketmaster has also decided to target scalpers through legislation and proposed legislation called the FAIR Ticketing Act that would outlaw drip pricing and grant artists the ability to ban scalper websites from reselling their tour tickets. Support for the initiative includes all four major talent agencies, Universal Music Group and a number of management companies.
Pro-ticket scalping groups have proposed their own counter-legislation, effectively banning Ticketmaster from using its proprietary technology to stop scalpers. Neither bill has a congressional sponsor in either chamber of Congress, however, and unless that happens, neither has any chance of passing.
Ticketmaster does appear to have some serious muscle in its corner when it comes to the scalp- ing issue. In a February interview with Billboard, Gregg Perloff, founder and CEO of independent promoter Another Planet Entertainment, which produces San Francisco’s Outside Lands festival, said: “My question for [Congress] is, ‘Why are you picking on Ticketmaster and Live Nation when you should be outlawing brokers?’ They are the ones who screw up everything. Does every promoter take a few tickets? Does every venue have a few tickets? … Sure. But it’s the scalpers that make it so no one can get a decent seat except the rich. The Senate didn’t do the research they should have done before they started pontificating and acting like they knew what they were talking about.”
In addition, Perloff suggested that touring artists were partially responsible because they “really want to go on sale for the whole tour at once because they can advertise the whole tour at once and make a bigger splash.” Regarding Swift’s tour, he said, “There’s no system in the world — and this is where I have to defend Ticketmaster — that could have handled the onslaught.”
Also in February, at the Pollstar Live conference in Los Angeles, music mogul Irving Azoff and Madison Square Garden Entertainment chairman James Dolan took on pro-scalping journalist-podcaster Eric Fuller when he argued that scalping made tickets cheaper, citing discredited media reports of bargain bin-priced tickets available for Springsteen’s North American tour dates.
“It’s about a half-hour conversation, but you’re dead wrong,” Azoff told Fuller, who also operates a consulting business in ticketing.
“You got to take your hat off to this paid lobbying group that’s working for the scalpers,” Dolan chimed in. “These guys are pretty good. Maybe we should hire them.” In response, Fuller says Dolan’s comments are “grossly inaccurate.”