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Are Live Nation and Ticketmaster Oligopolies gouging bands and the public?

You need to think about this? If it walks like a duck....


Taylor Swift’s Live Nation Debacle Is Just the Beginning

Dec. 10, 2022


By Clyde Lawrence, NY Times


Mr. Lawrence is a leader of the band Lawrence.


When Ticketmaster mismanaged the sale of tickets for Taylor Swift’s upcoming tour, it spurred everyone from angry Swift fans to national politicians to scrutinize Live Nation’s outsize influence on live music. But the problem has been going on for much longer.


Since my band’s first tour, in 2016, we have been frustrated by the lopsided deal mechanics of live shows. That’s why last year my band, Lawrence, released “False Alarms,” a song about the challenges we face in pursuing a musical career. It includes the lyric “Live Nation is a monopoly.” Whether it meets the legal definition of a monopoly or not, Live Nation’s control of the live music ecosystem is staggering.


Here’s how the system is supposed to work and, for the most part, used to work before Ticketmaster and Live Nation merged in 2010 (long before we ever played our first show). The two main players in a concert tour are the promoter and the artist, and they are aligned in trying to maximize the show’s profit while providing fans with an enjoyable experience. The promoter coordinates and pays the upfront costs to put together a concert, such as renting a venue, negotiating a deal with a ticketing company and staffing the event. The profit is calculated by the gross ticket sales minus the costs.


Importantly, with a large ecosystem of venues, promoters and ticket companies operating independently, competition worked to create more choice and control for artists. The system wasn’t perfect, but it largely worked.


Enter the Ticketmaster-Live Nation merger. Today, Live Nation Entertainment controls 70 percent of the primary ticketing and live-event venues marketplace. Live Nation also bought a litany of companies across the live music ecosystem throughout the 2010s, including promoters. So if artists play a Live Nation venue, they typically are also required to use Ticketmaster and a Live Nation-owned promoter.


Here’s what the result looks like from the perspective of a musician. Let’s imagine we just played a sold-out show at a venue Live Nation owns and operates. Costs will have eaten into most of the money made that evening: $30,000 for the “house nut” (the fixed fee the venue takes), $10,000 for marketing and even $250 for clean towels. Once these costs, some of which went to Live Nation subsidiaries, are taken into account, the remainder is split between Live Nation and the band. The tickets were sold for $30, and the artist’s share of the profits ended up shaking out to about $12 of each ticket, or 40 percent of the gross. (Live Nation told The New York Times that artists receive a vast majority of ticket sales.)


But in this hypothetical situation — deals vary widely, though this one runs along the lines of what my band gets — the fan didn’t pay $30 for the ticket. The fan paid $42 because Ticketmaster tacks on a substantial ticket fee. So of the $42 a fan spent on a ticket, the artist received $12. And from that $12, the artist needs to pay for touring costs such as lodging, transportation and its own touring crew. Roughly 50 percent of our portion is used for touring expenses — a number that aligns with some artists I spoke to, while others reported having trouble just breaking even. So that leaves $6 for the artist, in our case an eight-piece band. Keep in mind that’s pretax — and we pay for our own health insurance.


It’s not all bad. We have positive relationships with several Live Nation reps, who do their best to advocate our interests to the extent the system allows. And how much an artist earns as a percentage of revenues can vary widely, in part because Live Nation usually offers an upfront guarantee, which means we will walk out at the end of the night with either the guaranteed amount or a percentage of the show’s profits, whichever is greater.


Still, many musicians, particularly small to midlevel artists, have little to no idea how much of the pie is being consumed by Live Nation. For example, Live Nation will give our band a “settlement sheet” after the show that indicates it didn’t make much money on our concert, either. But missing from that sheet are several additional sources of revenue, including large Ticketmaster fees, bar sales, merchandise sales — that often go to companies owned by Live Nation.


As Live Nation leverages its power across the concert ecosystem to increase its profits, concertgoers see higher prices, and artists experience challenging touring dynamics. Artists’ touring costs have become especially onerous, creating difficult economics for small and midlevel artists. Santigold canceled a recent tour because of exorbitant costs, as did Animal Collective. Live Nation, though, is reporting record revenues.


All this is happening at a time when musicians are reliant on touring. Streaming platforms pay around one-third to one-half of one cent per stream, which makes it difficult for small and midlevel artists to make a living. Musicians now use streaming services to get noticed and build an audience, but ultimately most of their income is from touring. Even now that our band is enjoying more success on streaming sites, our touring income was more than triple our streaming income this year.


So what can be done about this? While the Justice Department is said to be investigating Live Nation and its practices, artists, fans and industry actors should work together to press for changes that will improve the live music experience for everyone.


We should pressure Live Nation to lower its cut on merchandise sales, especially for developing bands. If Live Nation argues that it deserves a cut of our merch sales because it provides the retail space in its venue, then we should get a cut of Live Nation’s ancillary income streams in venues it owns and operates. After all, it’s providing the retail space, but we’re providing the people. Live Nation’s getting around 20 percent of gross merch sales while we get nothing on ticket fees, bar tabs, coat checks and parking passes doesn’t make a lot of sense to me.


We can expand off-platform ticketing. Currently, many venues’ ticketing contracts allow roughly 10 percent of tickets to be sold to “fan clubs,” through which artists control ticketing fees and maintain a direct relationship with fans. Many artists I spoke to didn’t even know this option was available to them. Other fair-minded ticket companies are popping up, but without expanding the percentage of tickets that Live Nation allows to be sold on other platforms, these innovative companies can’t become a relevant part of the touring ecosystem.


And artists should be vigilant about costs. Settlement sheets should reflect a clearer, more comprehensive set of revenues so that the numbers at the bottom, showing how much the artist and Live Nation made, are more accurate. Cost breakdowns should also be more transparent about what line items like “house nuts” and “facility fees” cover, and should include more of the touring costs of artists, not just of Live Nation.


Musicians, don’t trust Live Nation with your livelihood. My understanding of deal nuances comes from my poring over the numbers line by line after many shows, often in the same sweaty outfit I wore onstage just minutes earlier. My bandmate Jordan Cohen and I regularly find discrepancies or clerical errors that can lead to over an hour of recalculating, digging up old emails and even tense debate, all taking place after midnight. I’m not suggesting that these types of issues are intentional or nefarious, but all told, correcting them can leave us with up to thousands more dollars per night than we would have otherwise made had we not caught them. (Live Nation told The New York Times that artists seldom debate settlements after shows.)


While many issues I’ve described are not particular to Live Nation, the company’s powerful position across the industry makes it a leader in setting standards for promoter-artist relationships, and its willingness to make some of these changes would lead to serious progress. We can create a fairer and more accessible music industry for everyone.


Clyde Lawrence is a singer, songwriter, producer and composer. He and his sister, Gracie, lead the band Lawrence (@lawrencetheband).


The Times is committed to publishing a diversity of letters to the editor. We’d like to hear what you think about this or any of our articles. Here are some tips. And here’s our email: letters@nytimes.com.


Follow The New York Times Opinion section on Facebook, Twitter (@NYTopinion) and Instagram.

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