Philadelphia Weekly

MUSIC

Monopoly Rules

What happens to concert ticket prices when Live Nation and Ticketmaster merge?

By Brian McManus

Add Comment | Comments: 25 | Posted Jul. 14, 2009

Non-complete claws: R5 promoter Sean Agnew battles Live Nation on a regular basis.

In the late 1990s, a self-made, brash and brilliant millionaire named Robert FX Sillerman jumped feet first into the concert promotion business. He’d made his fortune by buying radio stations and reselling them, and decided to apply the same strategy to live music—gobbling up as many promoters across the country as he could and putting them under the same umbrella, SFX Entertainment.

His sale of radio stations (for $2.1 billion) netted him $250 million, and as a result he had much more capital to work with than many of his competitors—mostly independent promoters who ran shows on razor-thin margins.

Basically, the entertainment company followed the well-known “clustering” model, made most popular by chain stores, which often take over cities blocks at a time, happily opening individual stores that exist in the red in order to increase overall revenue and gain dominant market share. Mom-and-pops shops have fallen like toy soldiers against such militaristic strategies.

Sillerman grossly overpaid top talent, stifling the abilities of his rivals to compete, paying out an astonishing 90 percent of the ticket price while taking a loss on a fair number of shows.

The seed of overpaying grows into the tree of ever-soaring ticket prices. Once you set the bar by paying an act a certain amount, it’s impossible to go back and undercut them; the loss must be made up somewhere else. Since Sillerman’s SFX started acquiring promoters and control in the industry in 1998, the average ticket price for the top 100 tours each year has increased from $32.20 to $67.33.

The most expensive seats in the venue have increased at even higher rates.

By amassing as many promoters as possible (among them Rapino’s concert-promotion biz in Minneapolis) and destroying what few remained, Sillerman could give the impression of an unstoppable juggernaut, which he’d sell to Clear Channel Communications for the tidy sum of $4.4 billion in 2000.

Almost immediately, with the combination of SFX’s promotion muscle and Clear Channel’s roughly 800 radio stations across the country, abuse of power accusations were hurled by, among others, Don Henley of the Eagles. With the power of the new company challenged on grounds of antitrust, Clear Channel decided to spin off its concert promotion arm into a different company, albeit with the same principals on both boards.

The new entity was named Live Nation.

Though Sillerman is gone (he’s since moved on to, among other things, buying Graceland, the naming rights of Elvis and Muhammad Ali, and controlling interest in American Idol), his practices remained—namely, overpaying for artists to such a degree that shows have no chance of being profitable for the promoter, even if they sell out.

“That’s totally the case,” says Sean Agnew, independent booker and owner of R5 Productions, who’s been booking shows in Philadelphia for more than a decade. “At least I can attest to that at the smaller, midsize level.”

How this affects Agnew and promoters of his ilk is mostly in the building of an artist: Smaller promoters can only build a fledgling artist to a limited point before reaching an inevitable fork in the road.

Take this hypothetical, proposed by Agnew, concerning the Dirty Projectors, a Brooklyn-based band that R5 has booked and promoted every time they’ve played Philly.

The band started small. A couple years ago the night before Thanksgiving, Agnew and the Projectors did their first show together at Johnny Brenda’s.

“They got $200,” remembers Agnew.

From there, the group opened for more popular acts—Grizzly Bear, Man Man—before headlining a show of their own at Johnny Brenda’s. Now, with new album Bitte Orca getting a Best New Music nod from influential music site Pitchfork, landing in the pages of Rolling Stone and Spin, and getting airplay on NPR, the band is a hot ticket, selling out a June 17 date at the First Unitarian Church, where Agnew books most of his shows.

“So say if, based on the success of that show and their success in general, I call them up and say, ‘Hey, Dirty Projectors, here is $4,000. Come back and play again.’ This hasn’t happened, by the way. Just being theoretical. I would guess that a Live Nation offer would be like, ‘Oh, here’s $8,000,’” Agnew says with the sting of a man who knows he’s up against this kind of perilously inflated market.

“And then, basically, the bands have to make a choice. ‘Do we make the extra $4,000 or do we stick with the guy we’ve developed this relationship with?’”

That choice, especially of late—now that money from record sales have dried up, the stigma of “selling out” is almost nonexistent, the span of a career is shortened to all but nothing—has become an easy one for most bands.

Agnew has gotten good at coping.

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COMMENTS

Comments 1 - 25 of 25

1. Rebecca said... on Jul 15, 2009 at 07:41AM

“This is one of the biggest reasons why I go to maybe one concert a year, if I'm lucky. Hell, even new CD's / MP3 downloads (iTunes gift cards) are limited to birthday and holiday gifts.
My husband and I are big fans of local rock and punk music, but when even the small, no-name club shows are selling tickets for over $30, who can afford to even go, let alone buy a CD and T-shirt?
I'm already not going to shows, so I can't boycott any more than that, but I wish I could.”

2. Frumpy Jones said... on Jul 15, 2009 at 08:08AM

“If people would just wake up and stop being a slave to their entertainment needs, this whole thing would stop.

Do you know why baseball players get 13 milli0on a year to play? because you idiots are willing to pay the outragous prices (World champs be damnned).

Same for concerts. If you could all just be strong and choose NOT TO GO because of the high cost, the prices would drop.

But you all have this "I can't miss it" attitude. It's sad. It's pathetic. And anyone who complains WHILE BUYING A TICKET is not helping the solution, only the problem.”

3. just a phan said... on Jul 15, 2009 at 08:39AM

“wonder if it's possible to create a new ticketing system for indi promoters, wonder why indi promoters are forced to use ticketmaster at a certain level?? or are the indi promoters forced to use ticket web and that is how they're forced to tangle with ticketmaster?

It is terrible that smaller promoters have to turn over (and pay to do it) their customer info should the merger go through. it used to be just feeding the beast was heinous, now smaller promoters will be charged to feed the beast...

Underlying all this is greed and continuation of the class system...a higher more powerful/wealthy class will now charge you more for entertainment while lowering your wage at work and reducing your benefits, while gambling your retirement savings and increasing the costs of requisite goods and services.

obama's justice dept won't stop this and it's unfortunate that his administration is just another spin on the Establishment merry-go-round. I really expected more based on his rhetoric.”

4. Anonymous said... on Jul 15, 2009 at 09:26AM

“It's pretty interesting that Don Henley cried so loud, but it was the Eagles who first charged the $100 ticket. Their manager, Irving Azoff, is the head of Ticketmaster now...and they are, of course, hooking up with Live Nation.

So the loudest artist is in the same band, and managed by the same guy who charge the prices. And who promotes Eagles' tours?”

5. Anonymous said... on Jul 15, 2009 at 09:57PM

“R5 Productions is the only honest entertainment promoter in this city. Sean knew this was going to happen. We, as music and sports fans, should stay away from Ticketmaster and Live Nation, and only support small indie promoters like Sean and R5.”

6. Anonymous said... on Jul 16, 2009 at 08:04AM

“Bastards are now even charging service fees to but tickets AT the box office.”

7. kbot215 said... on Jul 16, 2009 at 12:27PM

“Can't believe this isn't drawing more commentary....I honestly haven't gone to a concert in years. I like very few bands that I'd pay more than $50 to see.

This sounds like a perfect situation for a boycott but as said above, this problem only exists because the market is willing to bare the cost.

I'm also surprised that no "indy-ticketing" system has been created to undercut ticketmaster/web. I'm sure there is good reason, does anyone now why?

I mean hell....a venue like The Troc could afford to build/operate a ticket sales portal online linked to its own box office.

Has anyone ever tried? i'm 32. I can't remember a time when "ticketmaster" didn't exist.

Anyone interested in taking on these f**kers?

You'd need at least 1 large venue to play ball and prove the concept.

Anyone know if venue box offices are held to exclusively use "ticketmaster" for ticket sales? Can't imagine any venue would be willing to abandon TM altogether just to try this.....
”

8. R5 said... on Jul 16, 2009 at 12:32PM

“We are likely to be leaving TicketWeb because of this merger.....”

9. kbot215 said... on Jul 16, 2009 at 12:35PM

“Ok...so....you can use Tix.com, etix.com or intickets.com to cut TM out of the game, not to mention StubHub. These services allow you to do everything TM does.

So why aren't venues taking advantage? Do concert goers really care where their e-ticket is emailed from? How hard is it for the Troc to link to its own ticket portal instead of "The Troc page on Ticketmaster".

I realize this doesn't solve the larger "live nation" problem......and shows put on by "Live nation" would likely require TM ticket sales. And other promoters/venues using other systems just couldn't afford to pay what TM/LN does.

Ok, yup, monoploy. why is it even being discussed. put a bullet in it!”

10. shiticketmaster said... on Jul 16, 2009 at 06:00PM

“A lot of events here in the Northwest use these guys:

http://www.brownpapertickets.com/”

11. Anonymous said... on Jul 17, 2009 at 11:57AM

“Another reason to not attend shows. When I moved here, you could go to the box offices and get tickets at face value. Now that Live Nation took over every venue, they charge you $5 to hand the tickets through the window to you. It is the biggest racket ever.

Don't attend shows if it pisses you off. It's the easiest way t get the point across. Maybe influence your favorite bands to boycott larger venues and use small clubs. Sure, they will lose some cash by doing that but they might get a bigger turnout and sell out small places.”

12. James Babb said... on Jul 17, 2009 at 12:56PM

“Taxpayers are fleeced to pay for stadiums, then politicians award monopoly contracts to companies like Ticketmaster in exchange for kickbacks.

Still, it sounds like an opportunity for a rival to offer a more cost effective promotion service, at least for the private venues.”

13. Anonymous said... on Jul 18, 2009 at 01:19PM

“In defense of the Dirty Projectors: this time around they actually were offered nearly twice as much money by Live Nation to play at the World Cafe Live, which they turned down. They already have reached this juncture in their career and made the noble decision to play an R5 show in the basement of the church.”

14. Chris Oberlin said... on Jul 20, 2009 at 12:43AM

“I've been obsessed with live music for most of my adult life, and I always buy tickets before the day of show at the box office of the venue, if at all remotely possible. I realize I am partly to blame by continuning to buy tickets with outrageous prices and service fees up the ass. But come on! The TLA now charges a $2 fee if you buy in CASH at the box office before the day of show! World Cafe Live adopted this practice the day it opened. That was the first time I'd ever paid a service fee on a cash ticket at the venue - they initially didn't even mention service charges on their website. I had exact change for the ticket I was buying & the guy at the box office actually paid the service fee for me (a mere $1 at the time), I can only guess because he realized I was being hosed. At least now they're up front about it. Hell, Ticketmaster is now charging $3.50 to mail your ticket to you, which used to be free. And even if you print it yourself, there's still a fee! Christ!”

15. JJ Anthony said... on Jul 21, 2009 at 09:37AM

“great research, the connections to the president are very interesting. as a concert goer for the first time here in the area, I was quite surprised to see the cost of tickets, now I can't even imagine what they'll be.”

16. popa said... on Dec 23, 2009 at 02:36AM

“http://designmylaptop.ro/inscrieri/022e4fbffba40d302f1b0225f1c9d611/”

17. wojo4hitz said... on Dec 23, 2009 at 12:17PM

“wait, so... according to everyone here, the only way to fight this is to stop going to shows, and thus to stop supporting your favorite artists who - as a result of labels ripping them off - make no money off of their own albums and earn most of their livelihood from ticket and merch sales at their live shows? i'm glad commenter #2 thinks it's "sad and pathetic" that anyone would ever consider doing such a thing. true, boycotting would hurt TM and Live Nation, but guess what it would do to the people making the music? i don't know what the solution is here, but that is NOT it...”

18. JTull said... on Dec 26, 2009 at 03:52PM

“I last saw The Stones in 1997 when top ticket prices were $65. Four years later they go out on the road and top ticket prices were $350 or $450, yet they sold-out almost every venue.

That is only the fault of the public. Its like Field Of Dreams in reverse, Stop Paying And Prices Will Drop.”

19. L Block said... on Dec 26, 2009 at 08:25PM

“I have attended over 500 concerts in my life, beginning with Sly and the Family Stone at Madison Square Garden around 1971. Used to be that you would go to a show for $10-$15 and if you were lucky the headline act would play for 3 hours. Now everything is planned to the minute. Classic rock shows cost $150 and up for real good seats. I think it was Clapton and The Eagles that started the trend of high priced seats. I saw Cream at The Garden a couple of years ago and like a fool paid about $350 for a great seat(box office price). The group members were obviously just going through the motions for a big pay day. Seems Clapton always comes up with a new gimmick to charge outrageous prices (now playing NY with J Beck for $250 a seat). Used to be outdoor shows cost much less for the same great acts(Shafer Music Festival in Central Park). Tickets there would be $3 when indoor shows were $10--$15. That went out the door too. Simple answer that I have learned--STOP GOING and supporting them.”

20. Anonymous said... on Dec 28, 2009 at 01:40PM

“...obviously the answer is to march in Washington”

21. Richie said... on Dec 28, 2009 at 04:25PM

“Support the small venues that are local for you and don't rob you with service charges. Unfortunately, there appear to be enough people willing to pay whatever is asked of them to get a seat at a show. Bill Graham Presents, which unfortunately completely died several years back when Clear Channel bought the name. Now the name has changed because so many of us hold Bill Graham and what he brought to music that Clear Channel became a hated entity. They now own(?) venues or at least control them.
They make cash off our tickets, the venues and even charge a venue fee for many shows. Now we can't even buy tickets without being charged to have the tickets mailed. What crap! The best service they provide is when they email us news of what shows are coming up. They don't list any shows that they do not control though.
We are not able to deal with these jerks ruining the music except by boycotting, and that hurts the artists. What a conundrum....”

22. missing live music said... on Dec 29, 2009 at 10:02AM

“The first concert I ever went to was in 1995, Pearl Jam at Soldier Field. That was back when they tried to fight Ticketmaster and we actually had to buy our tickets over the phone through a different company. I still have that ticket somewhere, it looks awesome (no marketing crap!) and was all of $23.00 I believe! Oh, and it was for general admission on the actual field! Now, you try to get tickets online and are lucky to get a nosebleed seat for much more $. Has anyone looked into how Stubhub and all those scalpers get SO many of the good seats?!?”

23. mark said... on Dec 29, 2009 at 01:12PM

“L Block, I remember those days too, plus the Academy of Music on 14th St and tickets being $2.75”

24. vir2ul1 said... on Dec 31, 2009 at 11:12AM

“Hey L.Block and mark, whatever the ticketmaster issue (which sucks) you're bringing back some great memories. I was at the same Sly show at the Garden in '71 too. He had amazing control over the crowd. Incredible electricity. Then the Who at Forest Hills right when "Who's Next" came out. And Edgar Winter's White Trash in NJ (can't remember where) to hear their classics plus Frankenstein. There were many, many others but those stand out. The shows were less contrived too. There were always surprises in the performances and the encores were for real.

I don't begrudge the artists today for wanting to charge more for tickets---the opportunities to make money off recordings are fading, so they need to do it through live performances. But I hate the parasites---Ticketmaster, LIve Nation---- who have no talent themselves, who have never created anything but schemes to make a buck off the hard work and talent of others. They will kill rock n' roll in the process if they can.”

25. john brower said... on Jan 15, 2010 at 10:39PM

“In 1968 I was chastised in the Toronto Star newspaper for charging the highest ticket price in local concert history other than The Beatles when I charged $4 a ticket for The Doors. I guess I started this whole mess. In reality one name has been left out of this articel...Michael Cohl. If you do your research you'll find his Concert productions International pioneered scalping, fraud on the consumer by charging taxes on tickets and not paying the government, (his excellent lawyers beat that in Federal court) and inflating merchandise well towards its present day ridiculousness. Since he scampered away with The Stones in 1985 he hasn't looked back and found a willing partner in Mick Jagger who would sell his mother's underwear if anyone would buy them. Michael Rapino studied at the feet of Michael Cohl, the latter of whom I less than fondly refer to as The Meyer Lansky of rock. Lansky must look up from Hell and wonder why he never thought of getting Frank Sinatra fans to be so dumb.”

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