How a Ticketmaster bill apparently went off the rails

There is a growing contention from Washington D.C. all the way to California that event ticket seller Ticketmaster and its parent company Live Nation are an illegal monopoly that lawmakers should rein in, and sooner than later. There are multiple attempts to do just that in the California Legislature, but while this seems like an issue perfectly teed up for supermajority Democrats, pending legislation has instead devolved into finger pointing and recriminations that leave those potential reforms in limbo.

Complex measures like those involved here are classic examples of the messiness of legislative sausage making, the kind that rarely see daylight because the critical figures involved usually can’t or won’t speak publicly.

That’s certainly the case here. But Capitol Weekly has been able to pierce the veil a little in this instance because our questions about these measures seem to have triggered a cascade of events that has held up a bitterly contested bill in the Assembly Committee on Privacy and Consumer Protection.

The main bill in question is SB 785, by Sen. Anna Caballero (D-Merced). It was ostensibly introduced to prevent what happened last year when Ticketmaster had to cancel general sales of Taylor Swift tickets due to extraordinary demand.

The bill was set for a hearing in the privacy committee on June 18, but it’s now been delayed until July 2 after a document was circulated outlining potential amendments that some parties contend would have greatly benefited Ticketmaster.

Under the microscope
As U.S. Sen. Elizabeth Warren (D-Massachusetts) wrote in a recent piece of commentary for Rolling Stone magazine, “Ticketmaster and its parent company, Live Nation, are having a moment — a bad moment.”

In May, the U.S. Department of Justice along with the attorneys general of 29 states and Washington, D.C. filed a 128-page complaint in the Southern District of New York accusing the entertainment behemoth of “ongoing unlawful monopolization of markets across the concert industry.”

In announcing the civil action, U.S. Attorney General Merrick B. Garland made it clear that he and the other plaintiffs, which include California Attorney General Rob Bonta, seek to dismantle the monolith that was formed when the Obama administration approved Live Nation’s merger with Ticketmaster in 2010.

“We allege that Live Nation relies on unlawful, anticompetitive conduct to exercise its monopolistic control over the live events industry in the United States at the cost of fans, artists, smaller promoters, and venue operators,” Garland said in a May 23 press release. “The result is that fans pay more in fees, artists have fewer opportunities to play concerts, smaller promoters get squeezed out, and venues have fewer real choices for ticketing services. It is time to break up Live Nation-Ticketmaster.”

Ticketmaster has seemingly found an unlikely ally in the Assembly Privacy committee, which has already twice this year pushed amendments onto bills to seemingly benefit the ticketing giant.

The antitrust complaint paints a damning picture of the companies’ dominance over the ticketing of live events: “Live Nation directly manages more than 400 musical artists and, in total, controls around 60% of concert promotions at major concert venues across the country. Live Nation also owns or controls more than 265 concert venues in North America, including more than 60 of the top 100 amphitheaters in the United States. For comparison, its closest rival owns no more than a handful of top amphitheaters. And, of course, through Ticketmaster, Live Nation controls roughly 80% or more of major concert venues’ primary ticketing for concerts and a growing share of ticket resales in the secondary market.”

Yet, despite these unappealing assertions, Ticketmaster has seemingly found an unlikely ally in the Assembly Privacy committee, which has already twice this year pushed amendments onto bills to seemingly benefit the ticketing giant.

One hearing, two bills
On April 29, the committee forced Assemblymember Buffy Wicks (D-Oakland) to accept significant amendments to her AB 2808, which sought to require ticketing systems to enable competition, essentially removing Ticketmaster’s stranglehold on ticketing live events in California.

The committee’s amendments so watered down Wicks’ bill that she later shelved it. Eleven organizations that previously supported the bill, including the California League of United Latin American Citizens, wrote Wicks in May that “We cannot continue to support the bill with the Committee’s amendments. As adopted, these amendments undermine consumer protections under current California law and effectively enshrine Ticketmaster/LNE’s existing monopoly over ticket distribution, sale, and use. This makes AB 2808 the weakest consumer bill in the nation.”

Wicks said in a statement when she decided to hold AB 2808 in the Assembly Committee on Appropriations, which she chairs.

“I have decided to put this bill on hold to make sure the policy advances thoughtfully and with consumer interests at the forefront,” she said. “Loosening the hold of a massive entertainment monopoly that controls not only the ticket-buying experience, but also the success of artists and independent venues, is more than a one-year undertaking. Especially in this environment where our focus needs to be on the state budget and services for Californians.”

Also on April 29^th, the committee forced Assemblymember Kevin McCarty (D-Sacramento) to accept amendments on his bill AB 2203, which seeks to require ticket sellers to immediately send buyers an electronic proof of purchase upon buying a ticket.

The committee included a provision to limit the ability of ticket sellers to sell tickets they do not have in their possession, which sometimes arises in the secondary or resale market and could presumably benefit Ticketmaster’s grip on the marketplace.

To its credit, the committee also demanded an amendment that would require venues to honor bona fide proofs of purchase in lieu of tickets if a consumer cannot access an electronic ticket at the time of an event. But while that provision might be popular with consumers, it could potentially cause market chaos if multiple people showed up to a concert with receipts for the same seat.

In light of that, McCarty told Capitol Weekly that he doesn’t intend to move forward on the bill with the privacy committee’s amendments and instead will focus on legislative language that attempts to ensure the timely delivery of tickets upon purchase.

“The privacy committee amendments just created another set of problems,” McCarty said.

So, when Capitol Weekly learned that the privacy committee could be poised to also propose amendments to benefit Ticketmaster on Caballero’s SB 785, we took notice.

Capitol chatter
Here’s where things start to get murky, because consultants and lobbyists and aides generally can’t or won’t talk on the record about negotiations on bills.

“The privacy committee amendments just created another set of problems.”

But one thing is clear: the Assembly privacy committee circulated a document around the Capitol about Caballero’s bill. That document included the description of a potential amendment that, if applied to Ticketmaster, some people involved in the negotiations argue would have amounted to a massive giveaway to the company.

In effect, they say, the proposal would have given Ticketmaster – the issuer of most tickets to live events in California – the authority to dictate whether ticket buyers could resell their tickets and for how much, or even if they could give them away to a friend.

“It is fundamentally anti-consumer at its core” said Robert Herrell, executive director of the Consumer Federation of California of the proposals that were circulating.

“It’s very disappointing,” he added. “It suggests there’s a fundamental disconnect between the lawsuit and what the market needs and what’s on the table.”

Now there’s disagreement among the various sides on whether that item would have applied to Ticketmaster or whether that document was just notes and not actual policy plans. There’s even disagreement as to whether actual proposed amendment language was circulated and whether all stakeholders were kept in the loop.

But there’s no doubt about the circulation of the document and that the kind of restriction on authority it would theoretically grant to Ticketmaster would benefit the ticketing giant.

There’s also no doubt, as mentioned earlier, about Ticketmaster’s tremendous reach. As the lawsuit documents, the giant controls massive amounts of artists and venues and has a virtual stranglehold on primary ticketing for live events and a piece of the secondary market.

What that means is that special interests that have lobbied the Assembly privacy committee could have appeared to be independent, but in truth were strongly aligned with Ticketmaster.

Consider the Music Artists Coalition, an industry group representing music creators who were involved in lobbying on Wick’s bill. At least seven of the 17 members of the Music Artists Coalition board have connections to Ticketmaster:

• Businessman Irving Azoff, the former CEO of Ticketmaster whose new company the Oak View Group acts as a “pimp” for Ticketmaster, according to The American Prospect;
• Susan Genco, co-president of another of Azoff’s businesses, The Azoff Company;
• Ali Harnell, who works for Live Nation;
• Coran Capshaw, founder of the artist management company Red Light Management, who owns a stake in Live Nation;
• Attorney Elliot Groffman, who works for Red Light Management;
• Pop star Meghan Trainor and singer-songwriter Maren Morris, who both run ticketing for their live events through Ticketmaster.

Circulating right alongside the document about SB 785 from the Assembly privacy committee was the feeling from people we spoke with on background that the Music Artists Coalition is nothing more than a front group for Ticketmaster.

When the dust settled
So, against this backdrop, Capitol Weekly posed several questions to the offices of Caballero and Assemblymember Rebecca Bauer-Kahan (D-Orinda), who chairs the Assembly Privacy Committee.

And just like that, the bill’s negotiations stalled.

This has left SB 785 in a political no-man’s land. The fallout, apparently driven as much by personalities as policy concerns, illustrates the high stakes of the legislation, which has also drawn the attention of professional sports teams, who have been major players in lobbying on Ticketmaster related issues and may be attempting to influence the outcome of SB 785 as well.

Neither the Music Artists Coalition nor Jas Sajjan, senior manager of government relations and public policy for Live Nation, responded to requests to comment on this story. Caballero’s office also declined to comment, insisting it had nothing to discuss as the Assembly privacy committee has not provided it with any proposed amendments to SB 785.

The fallout, apparently driven as much by personalities as policy concerns, illustrates the high stakes of the legislation, which has also drawn the attention of professional sports teams, who have been major players in lobbying on Ticketmaster related issues and may be attempting to influence the outcome of SB 785 as well.

Bauer-Kahan, on the other hand, provided this statement: “As I review all bills that pass through the Privacy and Consumer Protection committee, California’s consumers are my number one priority. There are many aspects of ticketing that are harming consumers: from the soaring prices of events that fans want to attend, to the ability to easily transfer a ticket once it is purchased. In order to guide our decision making we are looking to other jurisdictions, experts in the field, and the people most impacted. In a public hearing on the subject, I had the privilege to learn from the panoply of entities impacted by the supply chain including our local small business that host some of our most beloved experiences and the artists that all of us cherish. The committee will do our best to protect consumers and ensure that we are focusing on all aspects of the market that cause pain points: from the primary market, to the brokers that are gouging consumers, to the secondary market that enables that process. It is a privilege and an honor to be the watchdog for California’s consumers and I look forward to continuing that work.”

On June 11, the Consumer Federation of California wrote Bauer-Kahan a letter formally opposing SB 785. The letter read in part, “We remain willing to negotiate in good faith for provisions that meaningfully help consumers in the ticketing space and don’t enhance monopoly power. However, as currently crafted and as rumored to be additionally amended, SB 785 harms California consumers, is weaker than a number of other state laws, and would negatively impact the current national conversation about ticketing reforms in the wake of the massive lawsuit from the federal government and a majority of states and jurisdictions.”

Can the bill get back on track by the July 2 hearing? Stay tuned.