NJ congressman blasts Ticketmaster and Live Nation while releasing 'secret' report

A previously "secret" report that alleges "rampant corrupt and abusive practices by the Live Nation-Ticketmaster monopoly" was released Thursday by Rep. Bill Pascrell Jr., D-Paterson, said a press release from his office.

The August 2019 report comes from a 2011 case in which Live Nation Entertainment Inc. was sued by plaintiffs Juice Entertainment, LLC, Thomas Dorfman and Chris Barrett for "allegedly interfering with their ability to sign artists to perform at the 2011 New Jersey State Fair, which ultimately resulted in the State Fair terminating its contract with the plaintiffs."

In June 2019, more than three years after the case's May 2, 2016, deadline for serving expert reports, the plaintiffs' counsel submitted a new expert report by Richard Barnet, a professor and author and an "expert" in the entertainment industry.

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The press release said the report includes these allegations:

• Live Nation/Ticketmaster negotiated third-party expenses, like rental costs with venues, directly with vendors in exchange for exclusive financial gains not disclosed to the artists or their agents, managers, or independent co-promoters in the form of "rebates."

• The value of these “rebates,” for the exclusive benefit of Live Nation/Ticketmaster, may be directly correlated to the negotiated increased value of expenses.

• Higher third-party expense means an event may be more expensive to produce and promote for all involved including agents, artists, and co-independent promoters within the contingency contracts that Live Nation/Ticketmaster uses.

• Live Nation/Ticketmaster can enjoy 100% of the benefit while passing on material costs (at times more than 50%) onto third parties including artists, agents, managers, and co-independent promoters.

• Live Nation/Ticketmaster’s business model may create an inherent conflict of interest with their fiduciary responsibility to the artists and others mentioned under these contingency compensation arrangements.

• Live Nation/Ticketmaster has insulated its profit through these “rebates” which are based on volume, while artists, agents, managers and co-independent promoters are compensated on “value” of ticket sales.

• Some shows indicate a “loss” or “very low profit” on public statements presented to artists, agents, managers and co-independent promoters, but a “profit” after factoring in the “rebates” in the internal accounting documents of Live Nation/Ticketmaster.

• These “rebates” are recorded as a non-traditional accounting item referred to as “contribution margin,” which the report alleges is not customary.

• Live Nation/Ticketmaster’s business model allows them to show “loss” or low “promoter profit” to its vendors and partners, including co-independent promoters, while reporting profit or higher income to regulators and shareholders.

• Live Nation/Ticketmaster’s suspicious accounting practices may have caused financial harm to the artists they promoted.

• Live Nation/Ticketmaster’s business model and the “rebates” it negotiates may be responsible for the rising cost of tickets for live events, which is then passed on to consumers.

• The report concludes that “Live Nation/Ticketmaster, their stockholders, and arenas are the primary beneficiaries of these business practices.”

The press release said Pascrell has been a longtime voice in Congress against Ticketmaster and Live Nation, was an early critic of the companies' merger and is a sponsor of the BOSS and SWIFT Act, which would force the ticket industry to be more transparent, giving fans a fair chance to purchase primary-market tickets and protection for secondary-market ticket purchasers.

He has forwarded the uncovered report to Sen. Richard Blumenthal, D-Conn., the chairman of the Senate Permanent Subcommittee on Investigations, which has been investigating Live Nation-Ticketmaster for over a year in hopes that it will aid in their investigation, the release said.

“This secret report about the Live Nation-Ticketmaster monopoly exposes yet more evidence of the corruption and abuses of live event ticketing in America,” Pascrell said in the release. “Whether it is fans of Taylor Swift or countless other performers, the abuses of this monopoly have harmed tens of millions of Americans who are fed up with endless fees and ticket schemes."

The scrutiny of Live Nation and Ticketmaster

Live Nation Entertainment Inc., which is composed of event promoter Live Nation and ticket seller Ticketmaster, has been involved in controversy and has faced criticism since Live Nation and Ticketmaster merged in 2010. As reported by CNBC, Live Nation controls about 70% of the ticketing and live event venues market.

Ticket prices have skyrocketed over the years, often attributed to Ticketmaster's dynamic pricing system, which adjusts ticket prices based on demand.

Some may remember the 2022 Bruce Springsteen ticket crisis, when fans were looking at $4,000 tickets soon after they first went on sale.

Also in 2022, Taylor Swift spoke out for her fans after Ticketmaster canceled the general public ticket sale for the record-breaking Eras tour and the verified fan presale saw numerous delays, errors and pauses. By the time tickets reached third-party sites, they were selling for thousands of dollars.

In December 2022, numerous fans, who had legally purchased tickets through Ticketmaster Mexico, were denied entry into Bad Bunny's concert in Mexico City because their tickets were not valid.

In response to these incidents, among others, and the long-running trend of overpriced tickets, numerous elected officials have voiced their concerns about the company's power over the industry. Congress has since been working on legislation to increase transparency and consumer protection.

This article originally appeared on NorthJersey.com: Live Nation-Ticketmaster blasted in report released by Bill Pascrell