Congress Moves to Ban Hidden Fees in Ticket Sales

Introduction

Congress is taking steps to ban hidden fees in ticket sales for live events, a move that has garnered support from Live Nation Entertainment. However, investors hoping that this support would alleviate antitrust concerns for the company may be disappointed.

The TICKET Act Moves Forward

Last week, a House committee passed the TICKET Act unanimously. This legislation requires sellers to display the all-in price of tickets as soon as a consumer performs a search. Additionally, it prohibits third-party resellers from selling tickets they do not already own, a common practice for popular events before passes are officially available.

Efforts in the Senate

The Senate has also taken action on this issue. A bipartisan group of senators introduced the Fans First Act last week, which includes similar provisions to the TICKET Act. It also includes safeguards against bots quickly acquiring passes as soon as they are released.

Industry-Specific Bills

Typically, Congress has limited time for industry-specific bills, particularly given the need to negotiate spending legislation to avoid a government shutdown next year. However, ticketing-related bills may be an exception. Isaac Boltansky, a policy analyst for BTIG, explains that legislation with unanimous support is much more likely to pass through Congress than bills with only a majority of lawmakers’ support.

Live Nation Entertainment’s Performance

Live Nation Entertainment, the parent company of Ticketmaster, has experienced impressive growth. In November, it reported earnings that exceeded analysts’ expectations as consumers continued to prioritize experiential spending following the pandemic.

Live Nation Expresses Support for Ticket Reform Measures

Live Nation, the leading live entertainment company, has announced its backing for federal all-in pricing regulations as well as other measures aimed at protecting fans and artists. The company stated in a recent statement that it will continue to collaborate with policy makers to advocate for stronger reforms and enforcement.

The looming concern for Live Nation is an ongoing investigation by the Department of Justice (DOJ) into potential anticompetitive practices. According to a report from The Wall Street Journal, the DOJ is examining whether the company employs anticompetitive agreements to secure artist bookings. In response, a Live Nation spokeswoman clarified that they do not consider it to be anticompetitive to pay artists more than other companies.

While Live Nation President Joe Berchtold expressed confidence in his company’s business model during an investor conference, the DOJ has yet to comment on the matter.

According to Seaport Research Partners analyst David Joyce, the legislation supporting the ticketing industry could potentially demonstrate to the DOJ’s antitrust division that Live Nation is acting responsibly. However, industry experts like political analyst Benjamin Boltansky believe that the Justice Department will continue to closely scrutinize Live Nation despite any potential improvements in consumer experience that may arise from the new law.

The Justice Department is known to be persistent when it comes to certain issues, as Boltansky remarks. Therefore, Live Nation will likely remain under the department’s watchful eye in the future.