Ticketmaster

Ticketmaster is an international corporation that provides booking and ticketing services for the arts and entertainment industries. Ticketmaster belongs to the parent company Live Nation Entertainment, though it was originally started as a small company in the 1970s in Arizona. The company is headquartered in Los Angeles and, as of 2024, employs more than 6,500 people. The company has been accused of holding a monopoly over ticketing systems in the United States. Lawmakers and critics have suggested that the company should be broken up to help ensure it does not have a monopoly. In May 2024, the US Department of Justice filed a lawsuit against Live Nation, seeking to break up the company.

Background

Ticketmaster was founded in 1976 by two University of Arizona staff members, Albert Leffler and Peter Gadwa, and a business professional named Gordon Gunn III. Leffler became interested in the idea of using computers to sell tickets after seeing a brochure for Ticketron, a computerized ticketing company. Leffler presented the idea of starting the company to Gadwa and Gunn. The three men worked in different ways to help the company. Leffler did more research about the computerized ticketing field. Gadwa wrote a program, which he called Ticketmaster Operating System, to give the company the computer capability it needed to run. Gunn helped secure funding for the company. Within a few months, the trio had developed the company enough to demonstrate a prototype of the system at the International Association of Auditorium Managers (IAAM) trade show. Their demo interested a few venues, which signed up to use the Ticketmaster system.

Overview

Ticketmaster put on its first ticketed concert in 1977 when the Electric Light Orchestra (ELO) performed at the University of New Mexico. The company experienced early and rapid success, and by 1978 it had its first international clients in Oslo, Norway. In 1981, Ticketmaster UK was founded, which was responsible for ticketing performances in London’s famous West End theater district.

Although Gadwa and Leffler remained employees at Ticketmaster, their quest for capital investments had led to a wealthy family from Chicago, the Pritzker family, owning a large portion of the business. The Pritzker family was instrumental in bringing new leadership to the company. In 1982, they hired a new CEO named Fred Rosen. Rosen had the idea of collaborating with rock show promoters, thereby ensuring that Ticketmaster would be used at whatever venues the promoters booked and used. His strategy proved successful, and Ticketmaster continued to dominate the computerized ticketing market in the United States. By partnering with Ticketmaster, the promoters were able to gain control over bookings in their own geographical territories.

Ticketron, Leffler’s inspiration for starting Ticketmaster, had partnered with numerous venues in the United States before Ticketmaster was able to compete. However, Rosen introduced the concept of adding “service charges” to the cost of tickets sold through Ticketmaster. The venues and promoters that worked with Ticketmaster received kickbacks of some of the service fees. Soon, venues were choosing Ticketmaster over Ticketron so that they could enjoy the extra income from the service fees.

In 1990, Ticketmaster acquired its biggest rival, Ticketron, opening up even more opportunity for the company. The acquisition was an example of the company’s growth strategy moving forward; it would acquire companies that posed a threat before they could impact Ticketmaster’s dominance in the field.

In the early 1990s, state senators in California became concerned with Ticketmaster’s dominance in the ticketing field, especially because of the seemingly arbitrary “service fees” the company tacked onto ticket prices. However, some of the leaders of the efforts to investigate Ticketmaster backed off after the company had a senator’s aide held for an eight-hour deposition because the aide had spoken to company employees, and the company claimed some of the employees had broken confidentiality agreements. In 1993, Paul Allen, the cofounder of Microsoft, purchased a large number of shares in the company from the Pritzker family, who had decided to give up control of the large company.

By the early 1990s, Ticketmaster had become part of many of the arts and entertainment tickets purchased in the United States. In 1994, the rock band Pearl Jam wanted to put on a tour for its fans that was affordable. The band asked Ticketmaster to restrict its service fees to $2 per ticket so that the total price would not exceed $20, but Ticketmaster refused. The band attempted to go on tour while avoiding the use of Ticketmaster at the venues it played; however, most of the venues already had agreements with Ticketmaster, so the band canceled the tour entirely. Eddie Vedder, Pearl Jam’s lead singer, contacted US government officials to discuss his concerns that Ticketmaster had formed an unfair monopoly of the ticketing industry. The US Justice Department quickly completed its investigation without finding any wrongdoing on Ticketmaster’s behalf. Vedder later said that the experience nearly ended his career. Pearl Jam’s experience trying to fight Ticketmaster seemed to act as an example for other artists, as most in the industry did not attempt to fight Ticketmaster for decades.

In 2009, Ticketmaster again made national headlines when it proposed merging with Live Nation, an event promoter which had also started its own ticketing branch just before Ticketmaster proposed the merger. Many people critical of Ticketmaster acknowledged that the company’s way of dealing with competition had long been to acquire companies that posed any threat to its dominance. Many critics saw the merger as the same type of action. Numerous artists and activists spoke out against the proposed merger. For example, American rock star Bruce Springsteen stated that he opposed the merger, saying it would create a “near monopoly” in the ticketing industry. At the time of the proposed merger, Ticketmaster controlled roughly 70 percent of the American market for event tickets, but a merger would give the company a much larger share of the ticketing industry.

Despite the public’s misgivings, the US Department of Justice (DOJ) approved the merger, which was finalized in 2010. Predictions about the resulting company—Live Nation Entertainment—controlling the ticketing market were realized soon after the merger’s approval. At the same time, media streaming had reduced the power and influence of record labels in the music industry, and musicians began earning more of their income by touring. This gave Ticketmaster and its parent company, Live Nation Entertainment, even more power and influence.

Another controversy involved Ticketmaster in late 2022, when the public had problems purchasing tickets for the popular American pop artist Taylor Swift's planned music tour in 2023. Customers experienced hours-long wait times for tickets and outages on the Ticketmaster website. Furthermore, tickets began showing up on the secondary market for thousands of dollars when many fans did not have the opportunity to purchase tickets originally. Lawmakers, music fans, and Swift herself criticized Ticketmaster for the fiasco. After a congressional hearing was held in early 2023, senators on both sides of the aisle expressed support for another DOJ investigation.

In May 2024, the DOJ filed an antitrust lawsuit alleging that Live Nation engaged in monopolistic practices and should be broken up. By that time, the company controlled at least 80 percent of the ticketing for major venues, as well as a significant share of the resale market, and directly managed over 400 artists. The Justice Department alleged that the company harmed consumers and the live entertainment industry as a whole by driving up ticket prices and causing smaller venues to be pushed out.

Bibliography

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