Purdue Pharma (the creator of the opioid epidemic) is probably relieved that, at least temporarily, the entertainment megalith known as Live Nation Worldwide, Inc. has moved ahead of them on the country’s “Most Despised” list. Indeed, if you were to ask any ticketless Taylor Swift fan, Live Nation is worse than Vladimir Putin, global warmers and Lord Voldemort combined.
Want proof?? When was the last time any company ever had a two-week period where they first got roasted equally by both Democrats and Republicans during a U.S. Senate hearing and ended the fortnight as a target of the President’s State of the Union address (Jan 24 to Feb 7, 2023)?
So, what’s all the handwringing about? Even if you have aged-out of the “Swiftie” fan club a decade or two ago, this is still an issue that may have (and already has had) a negative impact on casino profitability.
The bottom line is that ticket prices for concerts and events have been rising … not just a little, but skyrocketing. The truly bad news is that all that extra revenue isn’t necessarily going to the casino showrooms or, in some cases, the entertainers. Live Nation, in the opinion of many, is a bloated middleman skimming our take more than the mob did from the count rooms in the mid-1970s.
For the rock group Pearl Jam, this issue began in 1995 when they declared that they wouldn’t be bullied by Ticketmaster’s demands for higher revenues (this was before TM became part of Live Nation). The performers decided they were going to force prices down on behalf of their fans (and to retain some more of the gate for themselves). Good luck.
By going independent with their tickets, Pearl Jam found themselves locked out of dozens of major venues since those sites had signed separate exclusivity deals with Ticketmaster. Pearl Jam countered with a lawsuit against Ticketmaster the following year. They didn’t win and the group finally had to buckle under pressure. In 1998, they signed again with Ticketmaster for their live concerts.
Fast forward 10 years to 2008 and the issue was again featured on Capitol Hill with the U.S. Senate conducting hearings about a proposed merger of Ticketmaster and Live Nation Entertainment. At that time, Live Nation was both a powerful booking agent representing hundreds of artists, as well as a manager of multiple venues and arenas. In other words, by joining forces they could control all phases of entertainment (and pricing). They had the acts, the venues and (with the merger) the ticket systems. Many thought that couldn’t happen since it would be an anti-competitive and illegal monopoly. But the Senate then sided with Live Nation.
Interestingly, one of the biggest opponents of the merger in ’08 was promoter Jerry Mickelson of Jam Productions. He was unsuccessful in his arguments 14 years ago, but he was back again last month testifying before the same Senate panel.
However, this time he had a much more receptive audience of usually conservative legislators fired up by their ticketless daughters and their sympathetic, concert-going Congressional aides. Almost comically, every Senator had a Taylor Swift lyric to throw at Live Nation representatives during questioning. No one would ever accuse Utah senator Mike Lee as being a Swiftie, but nonetheless he came out accusing LM of being “a nightmare dressed like a daydream” (from Taylor’s “Blank Space” tune).
But it was Mickelson who hit the group with some facts about the negative impact the merger has had on his industry. “Over the years, Jam produced 1,499 shows with these performers,” he stated, “after 2010 (when the merger was allowed), Jam only produced 61 shows with them, and by 2015 the company only produced 1 show.”
Here are just a few of the sobering stats he presented to the committee:
- Live Nation owns, operates, has exclusive booking rights for, or has an equity interest in 320 venues that include 68 outdoor amphitheaters (5,000 to 30,000 capacity), 21 arenas (5,000 to 20,000 capacity), 104 theatres (1,000 to 6,500 capacity), 57 clubs (less than 1,000 capacity), 15 music halls (1,000 to 2,000), 39 festival sites and 15 other venues.
- 87% of the NBA teams have exclusive agreements with Ticketmaster in arenas across North America. Out of 30 basketball teams, Ticketmaster provides the tickets for 26, AXS has 3 & SeatGeek has 1.
- 5% of the NHL teams have exclusive ticketing agreements with Ticketmaster. Out of 32 hockey teams, Ticketmaster provides the tickets for 28, AXS has 2, Pacioloan has 1 & tickets.com has 1.
- 93% of the NFL teams have exclusive ticketing agreements with Ticketmaster. Out of 32 football teams, Ticketmaster provides tickets for 30 & SeatGeek provides tickets for 2.
- In 2012, Live Nation owned, operated, had exclusive booking rights, or had an equity interest in 139 venues. By the end of 2021, that number increased to 320 venues.
- 19 additional Amphitheaters (from 49 to 68)
- 10 additional Arenas (from 11 to 21)
- 61 additional Theatres (from 43 to 104)
- 41 additional Clubs less than 1,000 (from 16 to 57)
- 3 additional Music Halls 1,000 to 2,000 (from 12 to 15)
- 35 additional Festival Sites (from 4 to 39)
- 15 Other Venues (from 0 to 15)
It becomes pretty clear why few can afford to fight the system. Today’s news is focused on the angst of teenaged girls frozen out from Taylor Swift performances, or the fear that “Queen Bey” Beyonce may be next. But from a casino perspective, those fans are not really the prime demographic. But make no mistake, Bruce Springsteen is!
Rolling Stone magazine spoke out last November citing fans outraged that Live Nation and their “dynamic pricing” policy had seats to see “The Boss” selling for $5,000 each. Sadly, even he knew he was outmatched. The magazine quoted him: “For the past 49 years or however long we’ve been playing, we’ve pretty much been out there under market value. I’ve enjoyed that. It’s been great for the fans,” Springsteen said. “This time I told them, ‘Hey, we’re 73 years old. The guys are there. I want to do what everybody else is doing, my peers.’ So that’s what happened. That’s what they did.”
In an earlier editorial on August 2, Rolling Stone cited the soaring prices for Adele’s upcoming residency at Caesars Las Vegas with “seats starting at $670 for nosebleeds and capping out at $40,000 for the front row.” When we checked just this month, the nosebleeds were now well over $1,000, but the front rows had dropped to bargain-basement deals in the $10k to $20k range.
As mentioned, the higher prices don’t always result in performers getting more money. Worse, for those hosting their events (especially casinos), not that much of those revenues trickle down. The high fees make it more expensive to comp qualified guests, since much of the money is going to Live Nation, which seldom returns any of it by gambling on your floor. More importantly, mid-range players are certainly going to have less to spend on your floor after attending these concerts. A player with a $1,000 ADT slot budget is pretty valuable. They are a lot less valuable when that $1k is siphoned off by Live Nation. Losing them off the floor while they sit in the back row for Adele does generate some good will, but the margins of $1,000 in a slot machine is far better than enriching Live Nation, scalpers, and ticket bots.
If you’re thinking that these issues only apply to mega-venues and those hosting a Harry Styles or Bad Bunny-type act, you’d be mistaken. Ted Files, who runs the Scott-Dean Agency, has been a successful booking agent operating out of Nevada since 1977. He books all kinds of acts and venues, but has done a lot of work with mid-range and Native American casinos. He says, “they (Live Nation) make it more difficult for us to buy entertainment for the smaller casinos because they seem to monopolize all the acts.”
He explains: “They start trying to build relationships with the Boz Scaggs of the world and the George Thorogoods, so they throw some red meat at them and then when guys like us tried to come along and do some smaller dates where they traditionally made lesser amounts, it’s a lot more difficult. The only thing that keeps us going is the fact that we’ve been doing it so long, we have great relationships with all the agents.”
Files notes that those relationships often allow his agency to negotiate directly with the acts, and that cuts out a few of the middlemen who slice up (and add to) the pie. “For example, we make a deal for an act at $50 grand. I send them the contract so the act sees it, and I invoice the casino with a 10% commission so they know exactly what they’re getting and how much they’re paying. Everything is above board.” He adds, “Because when you start adding all these secondary fees, I can’t believe how much money is involved. You know, sometimes, they make more than the act themselves.”
Middlemen are a big issue, and some claim Live Nation does little to stop them. One of the most blatant sources of ticket inflation, and a lot of the blame, lies with the scalpers and ticket bots. Mickelson said before the committee, “In a 2019 ‘Billboard’ article, Live Nation acknowledged that the company had facilitated the transfer of concert tickets directly into the hands of scalpers through the years, at times through the request of various artists, without giving fans the chance to buy them through normal channels at face value.”
Some have placed additional blame on ticket re-sellers like StubHub for increasing prices. That’s probably true for sell-out shows like Swift’s or Springsteen’s. But, for smaller draws, they argue they can be saviors. StubHub’s chief business officer Cris Miller told Rolling Stone, “Brokers are valuable to both the industry and ticket buyers as they hedge the risk for event organizers (and casinos) who are promoting low-demand events, and they increase accessibility for fans by offering healthy competition and multiple points of distribution.”
If you’re wondering why others don’t start competing more aggressively with Live Nation; they’ve tried. But it is hard to fight a monopoly. The major competitors are AEG (and their AXS ticket service), SeatGeek, eTix, Paciolan and others. Yet, at their peak, they have never totaled more than a 15%, and generally a lot smaller, share of the business nationwide.
Many feel that if the artists joined together, they could stop Live Nation’s abuses. But maybe that’s not totally in their interest. Working less and making more is hard to resist. Files notes, “in the case of some of the older acts they don’t work as many dates, so they try to get more money for the dates they do play.” It’s hard to blame them.
Closer to home and on a smaller scale, Files urged many casinos to consider alternatives when buying entertainment. He noted, “the Eagles get millions a show. But I just booked a Don Felder date for him, one of the original Eagles (he joined the group in 1974). We paid him a fraction of the amount. For the audience, it’s like watching the Eagles, less all the Eagles. And it was a great show.” In other words, you don’t get the “real deal” Eagles, but you do get an invoice that’s millions lighter. The music is just the same, your gamblers are happy and you save enough to make a downpayment to buy the “Hotel California.”
Maybe the government can do something to improve the situation. Seventy-six- year-old Senator Richard Blumenthal dropped another Swift lyric urging Live Nation to look in the mirror and admit, “I’m the problem, it’s me” He added, “You are the ones ultimately responsible for the astronomically rising prices, the exorbitant hidden fees, the sold-out shows, the bots and scalpers.”
Some interviewed for this story worried that even if the Senators were to break up Live Nation, others would jump in and continue the same practices. There is just too much money to be made. While the average priced seat at the recent Super Bowl in Glendale was only $6,400 (down from last year’s $10k), rest assured that the LVIII version planned for Las Vegas’ Allegiant Stadium will probably set an all-time record, no matter who’s playing.
Alas, Senator Amy Klobuchar (throwing in yet another Swift line) may have predicted the future by citing our history, “Given the events of the past few decades, frustration is something that ticket buyers know ‘all too well.” So do casino operators.