Just over an hour. Thanks senator lee, let me welcome the six witnesses whom i will introduce. Prior the joining live nation, partner with Mckenzie Company leaving west coast practice. The Company Originally launched as aggregator of resale ticket listings but operates as primary ticket outlet and secondary marketplace for sports teams and live event venues. Prior to founding this is a return trip for mr. Mickelson. He testified before the antitrust committee in february in 2009 of the hearing of the then pending merger of ticketmaster and live nation. At the time he warned of any competitive effects of the merger could have stating, quote, its my belief this merger is vertical integration on steroids, close quote. I look forward to hearing an update. Senior Vice President of the James Madison institute, jmi, tallahassee think tank focusing on free Market Economics in florida. His writings have been published. Catherine british serves as the american antitrust institutes Vice President for legal advocacy. Prior to joining aai worked as council and attorney in the department of Justice Antitrust Division while at the department of justice she represented the antitrust division and trade issues including leading the negotiations of competition chapters of the u. S. Mexicocanada agreement in transalantic trade partnership. Lawrence is leader of the band lawrence and the musician. Composer and producer, in december mr. Lawrence wrote oped in the New York Times titled taylor swifts live nation debacle is just the beginning. After i swear the witnesses each will have five minutes to make Opening Statement and turn to senators questions. Ly pass gavel to senator klobuchar to preside over the remainder of the hearing. First could all of the witnesses please stand to be sworn in. Do you affirm the testimony that youre about to give before the committee will be the whole truth and nothing but the truth to help you god . Let the record reflect that all of the witnesses have answered in the affirmative and before i ask for Opening Statement, ceremonial handing of the gavel. Thank you, sir. I thank you for the invitation to appear today to address these important issues in the Live Entertainment industry so we can Work Together to make things better. For almost 20 years live nation operated in the United States and around the world with an artist First Business model, focused on helping put artists on stage and connecting them with their appearance. We believe that the connection is the foundation of entertainment industry, the source of nearly all commercial value and the number one thing that Public Policies should protect. Over this period we have helped the industry grow rapidly. In 2022 live music was 12 quintilliondollar industry in the United States four times what it was in 2005. To fuel this growth, live nation invested billions of dollars, funding artists globally, 9 billion in 2022 alone. Given our level of investment in artists it is also critical for live nation to have the most effective platform possible for selling tickets. Since our 2010 merger with ticketmaster we have invested over 1 billion in capital to improve the ticketmaster system. Much of this was on technologies to eliminate fraud and to get tickets to fans instead of using bots, prime example of which is verified fan service. Todays ticketmaster best in class in conducting large onsales, marketing concerts, preventing frauds and getting tickets into the hands of real fans. I do want to take a moment to address some confusion about what ticketmaster and other primary ticketing platforms do and dont do. Primary ticketing Companies Including ticketmaster do not set ticket prices. We do not decide how many tickets go on sale and when and we do not set service fees. Pricing and distribution strategies are determined by the artists and their teams. Service fees even if theyre called ticketing fees are retained mainly by the venues and their portion of the service fee that ticketmaster retains have been falling steadily over time. This leads to the topic of todays hearing, competition in ticketing markets. We hear people say that the ticketing markets are less competitive today than at the time of ticketmaster merger. Thats simply not true. In 2009 the department of justice alleged the ticketmaster market share is 80 . Different story today. Obvious changes is emergence of enormous Second Ticketing market. But also primary ticketing the ticketmaster in 2010 did not face level of competition that we face today with new competitors highly capitalized, ags access along with established competitors including tickets. Com. Ticketmaster has lost not gained market share since the merger. As i mentioned todays competitive resulting in getting less of the make value in ticketing contract every year. There are problems in the ticketing industry, problems we believe can and should be addressed for legislation. Many are the direct result of industrial scale ticket scalping that goes on today. A five billion dollar industry in concerts alone in the United States by practices that run counter for the interest of artists and their fans. The recent onsale experience with taylor swift, one of the worlds most popular artist highlighted the need, we knew bots would attack the onsale and plan accordingly. We were then hit with 3 times the amount of bot traffic that we had ever experienced and for the first time in 400 verified fan on sales that came after our verified fan password servers as well. While the bots fail today penetrate systems or acquire any tickets the attack requires to slow down and even pause our sales. This is what led to a terrible Consumer Experience which we deeply regret. We apologize for the fans, we apologize to ms. Swift and we need to do better and we will do better. Ticketmaster learned valuable lessons from the on sale and in hindsight several things we could have done better and let me be clear the ticketmaster accepts its responsibility to ever escalating arms race but in this form where we are here to discuss Public Policy we also need to recognize how scalpers experienced and we should enact prohibitions on fraudulent ticket practices including deceptive urlss and for sale tickets before they are on sale on the primary. We should mandate all end pricing so that fans see the full cost of their tickets from the start. I look forward to answering your questions. Good morning. Chairman durbin, Ranking Member grant and senator klobuchar and members of the committee. My name is jack, i am the cofounder and ceo of seek geek. Unlike so many millions i am a fan. I grew up in cleveland, ohio, happiest childhood memories are going to see cleveland crunch games with my dad, soccer teams with friends. My cofounders and i started geek because we believe profoundly in the power of live events, magical things that create incredible moments and yet believe that experience of actually buying tickets is very much the opposite and equated right for innovation. Ive spent the last 13 plus years working in this industry and there are 3 things that are clear to me and are clear to many others who work in Live Entertainment. Number 1, a lack of robust competition in our industry meaningfully stunts innovation and consumers are who suffer. Number 2, venues fear losing live nation concerts if they dont use ticketmaster. And number 3, the only way to restore competition in this industry is to break up ticketmaster and live nation. So quick background on seatgeek we started the company in 2009 and initially as was mentioned we were a serge engine that allowed users to search across a lot of sites, company evolved and grew over time and importantly to this discussion in 2016 we entered the primary ticketing marketing. Throughout our evolution, we have maintained intense focus on consumers. Weve launch maryland Industry First features that make it easier and more affordable for fans to go to events and im super proud of all of the work that weve done at seatgeek but i also recognize the ongoing challenge that is face our industry, some of which have recently been frontpage news. The best way to address those challenges is to ensure theres robust competition where businesses and consumers can select the best products and Services Based on their merits, that does not happen today and does not happen because live nation controls, operates ticketing systems and even owns many of the venues. Today to get a masters estimated shares over 70 of the u. S. Primary ticketing market. Ticketmaster is the primary ticketing provider for more than 80 of the nba, nhl. Live nation is the largest promoter of major concerts in the world with more than 73 of the top 25 in the u. S. It is no mystery why no other company has significantly penetrated the ticketing market. Major venues in the u. S. Know that if they move their primary ticketing business from ticketmaster they risk losing revenue from live nation concerts. They know this because live nation has told them so. Directly and indirectly through its public and private communications and subsequent retaliation against venues that signed deals with a competitor. The doj found as a consequence of live nations conduct, quote, venues throughout the United States have come toxpect that refusing to contract with ticketmaster will result in the venue receiving fewer live nation concerts or none at all, unquote. Our industry provides Cautionary Tales about how behavioral remedies cannot solve the problems inherent in an anticompetitive merger. The only effective remedy now is a structural one. The dissolution of the common ownership of ticketmaster and live nation. To improve our industry, we must restore competition. We deeply care about the live Event Industry and it is time to give fans, teams, artists and venues like the choices they deserve. Its a privilege to be included in this discussion. Thank you for your time and attention. Thank you very much, mr. Groetzinger. And next up, we have with us mr. Thank you, and thank you for your work you do with the palace in st. Paul, minnesota. Thank you, senator. [inaudible] thank you, senator. Thank you, charmander ben, Ranking Member graham, senator klobuchar and senator lee along with all the other members of the Senate Judiciary committee for allowing me to appear before you today. Im here to speak on behalf of my colleagues, fellow promoters and most importantly, the concert fans. My appearance before you is based on my 50 years of experience in the Live Entertainment industry. For the record, my name is Jerry Mickelson ceo and president of Jam Productions a company thats produced and promoted events since 1972. For those that may not know, let me briefly talk about the job of promoters. We work with agents, managers and markets across the country. We make guaranteed payment to artists, contracts with the venue to hold the event, market to put tickets on sale land to produce the show. We pay all the costs and assume all the risks. When live nation loses money on a concert, they can make up with operating income from ticketing and sponsorships. We cant do that. We dont have those. Our competitor earns money from selling tickets to our concerts. In 2009, i appeared in front of the committee to testify about the merger of live nation and ticketmaster. At that hearing i stated the unification of the two goliaths would create a business with extraordinary market power and cloud unlike any that ive ever seen in my lifetime. I testified at that if this merger was allowed to produce and proceed, the combined entity would have the ability to suppress or eliminate competition with many segments of the industry. Today we know with certainty that the merger is vertical integration on steroids. Using dominance in one market to expand its power and dominance in another cutting out the competition and harming the consumers. From my vantage point, the arena level concerts used to be the most profitable segment of the business because thats where we earn our money. In 1996, jam produced 100 concerts and arenas and in 2111 year after the merger that decreased to 46 and 2022 we only produced 14 arena concerts. Live nation went after the business and succeeded in driving other promoters out of that sector. Live nation effectively eliminated competition for indoor shows by utilizing the following methods, purchasing National Indoor tours and arenas and outdoor amphitheaters. Threaten financial penalties on a deal if the artists wanted to work for jam. About 100 or more of the gross ticket sales and live nation managed artists typically owned and performed for live nations at the arena level. Now live nation is going after music theaters and clubs of all sizes in an effort to control the entire industry from the top to the bottom. From 2010 to 2021, live nation added a 61 theaters and 41 clubs to their already large arsenal venues. The nearcomplete domination of arenas because of the merger could soon happen in theaters and clubs in every community in the country. In 2016, live nation earnings, the president and ceo said one of the companys biggest goals was to convince artists to integrate the markets to grow live nations share. He stated and i quote artists into the more they get comfortable with seeing the primary and secondary together are the market share grows. With that statement he acknowledged they are observing artists but themselves. The decisions i would like to bring to your attention were vertical integration played a role in restricting competition. The 1948 Supreme Court decision in the u. S. Versus paramount led to the abolishment and forced the studios to sell authors theater change. The case states the court has held many times that power gained through some advantage can give rise to liability if a seller exploits the dominant position in the market to expand its empire into the next every time they blame everybody else for the significant issues in andincreasingly high fees, remer that many times they are the venue, the promoter and the manager of that artist. By controlling the ticketing promotion the Management Company they are choking off competition that would offer an alternative to the broken system we see today. This is more acutely cnn taylor swift and played out across the industry every day generating fan outreach and despair. Thank you for your time and i look forward to answering your questions. Thank you very much, mr. Mickelson. Madame chairwoman, members, i would like to thank you for the opportunity to appear for you this morning. I serve on the policy team at the James Madison institute in tallahassee, florida. We are a nonprofit Economic Policy think tank that focuses on the policy issues impacting floridas 22 million residents. Fresh out of college and starting a career in policy, i dropped off one day testifying before the United States senate and an issue of profound importance. It may be International Monetary policy or perhaps a Supreme Court nomination. But as my 14 and 13yearold daughters informed me last night, dad, nothing you speak on in your career will be as important as what you say today. Dont mess this up so here we go. The home to the 14 major sports teams, 15 Major League Baseball spring training facilities, f1, the pga, college and numerous other sports venues. I say that because most of those venues serve as concert sites when they are not in use during the respective seasons. In florida, sports and Live Entertainment is a 6. 5 billion market, a sizable share of the nations 133 billion Economic Impact in this area. So this issue is important to floridians, not just with respect to primary ticketing, but also the secondary ticket market, which i would like to open with. Id like to offer perspective by way of a brief analogy. Because im an employee of a Nonprofit Organization i drive a 15yearold volvo, god bless the swedes. I purchased from a private seller and much to my kids dismay its still going strong. They didnt place a single restriction on the automobile when i purchased it and with thd when i decide to sell it, they will likely have no role in the transaction. I dont think they have a clue what happened to the car since it left their dealership. This is true for of just about t every auto manufacturer. Consequentially it is a robust, thriving and diverse industry largely adhering to the forces of supply and demand. For the market governing the marketing and resale of tickets to sports competitions and concerts and it could be but it is not occurred. As weve spoken about one dominant market player approaching 80 of the primary market this does allow them the ability to leverage the dominance through service to the exclusivity requirements and other practices that are ultimately borne by consumers. At its core, a debate is occurring over what a person obtains when they purchase a ticket. As some would argue the purchaser is leasing or renting a space in a venue and that is subject to terms and conditions. In our opinion that logic rests on the misguided assumption that the commodity is the venue. Ask anyone attending a jaguars game or harry styles concert for that matter where they are going and they will reply im going to the game, or im going to take my daughters to see harry styles. They would not reply with im going to the bank field this afternoon or just taking my kids to amway arena. The stadium might have a lifespan of 50 years but an individual purchase a commodity with a much more limited lifespan, a couple of hours. This distinction in our opinion is vital to the debate over the issues in the event of ticketing space. Over the last several years weve heard the term consumer welfare standard uttered much more frequently. Questions over whether the standard is still applicable in todays innovation economy, whether it should be replaced with some other form of suggestive measures and at the age of the tech platforms what it even means. I would ask you all as we conduct the hearing to set that principle aside in this area we contend this consumer welfare is very clearly defined and reflective of the issues and challenges within this industry. Those representing the dominant player would contend that their growth has allowed them to innovate and make advances that greatly benefit consumers. A few million taylor swift fans would respond this is why we cant have nice things. To be clear, from our perspective, the issue isnt the taylor swift crash, per se. That merely revealed how the lack of competition over time has corroded innovation and distorted the market. I would ask suppose a robust vibrant and competitive market for ticketing had been allowed to evil and innovate over the last 20 years. With the taylor swift crash have occurred . Its a hypothetical of course, but absolutely one worth considering. I will conclude my remarks with a call to u. S. Policymakers on this topic and in this arena consumer welfare is very clear to define and there are actual harms to consumers from the anticompetitive practices. Thank you and i appreciate the opportunity to be with you all today. Thank you very much. Thank you chair durbin, the senators klobuchar and members of the committee it is an honor to be here today for the american antitrust institutes perspective to the competition and Live Entertainment. We applaud the Senate Lawmakers for turning their attention to a serious competition issue that hurts concertgoers, artists into smaller competitors across the Live Entertainment industry. There are a few major points and policy recommendations that i would like to highlight today. First, live nation ticketmasters is an example of on the one hand a very traditional monopoly in the mode of standard oil. And on the other a 21st Century Digital player like other Online Platforms dominating an ever widening swath of its industry. Its dominance up and down the supply chain creates the incentive on the ability to limit competition to protect its market position. On the concert aside this includes excluding smaller independent concert promoters and venues in digital ticketing this includes excluding ticket resellers and brokers that have the secondary ticketing. Customers pay the price for these monopoly acts with higher ticket prices and fees, lower quality, less choice and less innovation. Artists who lack the power of a swift or springsteen lose out. A lengthy investigation concluded in 2020 live nation ticketmaster repeatedly violated the requirement of the Consent Decree. Unfortunately rather than seeking an effective structural remedy, doj simply amended to some of the language into the Consent Decree and extended for another five and a half years. At the amendment did nothing to change live nation ticketmasters anticompetitive incentive. The current doj has recognized the ineffectiveness of the behavioral remedy that runs counter to the companys incentive. The doj should pursue new Enforcement Actions to obtain an effective structural release. This should be a challenge under section seven of the clayton act or the monopolization case under section two of the sherman act. Separating the ticket promotion and venues would eliminate the incentives to stifle competition and reducing the market share of ticketmaster through spinoffs would address the ticketmasters incentive to limit competition in secondary ticketing. Protecting consumers, artists in into small arrivals from the ticketmasters harmful conduct will require multiple policy tools including strong antitrust enforcement against live nation ticketmaster and legislative action. They urge enforcers and wall makers to consider three major features of the approach to the live nation ticketmaster monopoly problem. First, consider standards that enable the agency to challenge the mergers and if is effectively horizontal. The standard in section seven of the clayton act is designed to prevent all mergers that may enhance the market power and lead to anticompetitive effects. We currently have a structural presumption for the horizontal mergers. We badly need. Either through legislative action or new antitrust guidelines that get adopted by the court. A second, support more vigorous antitrust enforcement with legislation designed to strengthen and clarify the antitrust laws. Debate of the act is a leading example. The bill would among other things update legal standards for mergers and strengthened the standard for prohibiting exclusionary conduct by dominant firms. Such reforms would reduce the formidable burdens on the government for bringing monopolization and murder cases. Finally, consider the merits of an oversight regime to facilitate access to the transparency into ticketing. At the digital platforms can engage in practices designed to sell preference such as stealing music fans to the proprietary ticketing services. Solutions to the problems may require establishing rules of the road or code of conduct for additional ticketing platforms. Such legislation has been proposed at the state and federal level. Thank you for the opportunity to testify today. And i look forward to your questions. Thank you very much. And last but not least, Clyde Lawrence and i will say looking at your testimony ahead of time, i am particularly enjoying the line that perhaps while you were so proud of the band we are not artists yet on the acts like taylor swift and Bruce Springsteen so we do hope one day to be big enough to crash a ticketing website. With that, i turn it over. I hope that it will get as big a laugh. Good morning, senators and thank you for inviting us today to the most unique gig that we have had in years. This is jordan cohen and we are two of the age members of the band from new york city. Before telling you more about who we are, its important to clarify who we are not. We are not lawyers or economists were experts in antitrust policy. Senator klobuchar said we are also not artists on the level of acts like taylor swift or Bruce Springsteen though we do hope to be big enough one day to crash the ticketing site but we are seasoned artists we have toured extensively starting with empty bars and working our way up to headlining sold out shows for thousands of people into seeing the music chart on the top 40 radio. While we became musicians because of the passion for making music we realized early on we needed to embrace the entrepreneurial aspects of preserving the career as artists. Ever since we started touring we tried to be even including the lyric live nation is a monopoly in the latest album. Whether or not it meets the Legal Definition of the monopoly is someone elses call to make. While we discuss those dynamics in depth in our written testimony most of the issues we face stemmed from the fact that live nation ticketmaster accessed three things at the same time, the promoter, the venue and the ticketing company. Lets imagine you just played a show. When an artist plays these venues they are required to use live nation as the promoter. To simply advertise the promoter coordinates and pays the upfront costs to particular concerts at the staffing venue and striking a deal with the performer. Since both as a share of the profits, we should be True Partners aligned in the incentives. To keep costs low while ensuring the best fan experience. Live nation Modeling Acting as a promoter but also at the owner and or operator venue it complicates these incentives. At the end of the show, the costs for most of the money made that evening ended due to the control across the industry we are practically no leverage in negotiating them. If they want to take 10 of the revenues and call it a facility fee, they can and have. If they want to charge 30,000, they can and have. And if they want to charge 250 for a stack of ten clean towels, they can and have. Once the costs, some of which went to the live nation subsidiaries are taken into account, the remainder is split between live nation and the band. In the world where the promoter and the venue are not affiliated with each other we can trust the promoter will look to get the best deal from the venue. However in this case the promoter and the venue are a part of the same corporate entity so these line items are essentially live nation negotiating to pay for itself. Does that seem fair . The tickets were listed at 30 30and the pay ended up shakingt to about 12 of each ticket. But in this type is hypothetical show they didnt. The van paid 42 because ticketmaster tacked on a 40 fee. For the record its been as high as 82 . As with promotion, if an artist plays at a live nation venue, they have no choice but to have the show ticketed by ticketmaster. To be clear, we have absolutely zero say or visibility and how much the fees will be. We find out the same way as everybody else, by logging onto ticketmaster once the show already goes on sale. In case youre wondering, no we do not get a cent of the fee. So over the 42 the family spent, we received 12 but whereas the costs were already covered at this point in the calculation we still need to pay for our touring costs and in our case roughly 50 of the earnings that are used to cover expenses so that leaves us with six dollars pretax and we also have to pay our own health insurance. To be fair, many of the issues weve addressed here are not exclusive to the live nation ticketmaster. We have a number of experiences with parts of live nation. The venues are often filled with hardworking and passionate people and most importantly, all of the venues have one consisting wifi nation and password and that is a game changer. Jokes aside, we truly do not see live nation is the enemy. They are the largest player in the game that is stacked against us as artists and fans as well. Ultimately, the current state of the industry is left with lots of questions. Why is it that all of the costs before the profit point yet hours, the artist dont. Why is there so little transparency as to what line items such as facility fees go to words . Why is it a standard for live nation to take a 20 commission on our Merchandise Sales while we never receive a cent of their ancillary revenues like concessions, alcohol and parking. Finally, why is live nation allowed to set a exorbitantly high ticket fees without any transparency input while other industries the government has mandated caps on various types of junk fees. We look forward to seeing the questions get some answers. Thank you for your time and we hope to see some of you at one of the concerts if you would like to come, let me know and i will throw you on the guest list. Thank you very much. I think we are willing to pay, but we appreciate the testimony. With that, im going to turn over for the first round of questions. Im going to stick with you for a minute because you made it clear that you do not set the ticket price. And he doesnt have anything to do with of the ticket price. Who does set the ticket price . That is the thing i was most surprised to year in the speech, because we have no say and if we asked the venues in advance they often say that is a ticketmaster thing, so the fees, we do set the ticket prices, the base price, the artist does have a say in setting for sure, but the added Ticketmaster Service Fees we have no say into the venues claim. Do you want to add anything to that . The band sets the ticket price. The service fee level is set by the venue. And you control the venue. Do you not . Do you have approximately 4,000 venues in the United States. Live nation operates approximately 200, so roughly 5 of the venues. [inaudible] no, sir, they are generally not the biggest. They tend to be the sports venues, the arenas for stadiums controlled by the sports teams or the owners of the sports teams. You had an experience at barclays, did you not come in terms of the opportunity for your company to take over the venue that had been controlled by ticketmaster. The New York Times reported a few weeks ago how once we took over the ticketing for the center in brooklyn and berkeley centers all the market increase in the number of concerts from live nation that were sent to that venue versus the historical outages. So earlier, last year the center came to us and said we would like to keep using you for ticketing basketball, but we want to be able to use ticketmaster to ticket concerts. We looked into it and we couldnt get to the economics to work so we parted ways amicably. So they used their power of the marketplace to diminish the number of acts and the venue decided that they have to go back to ticketmaster . There was certainly the market increase in the number of shows live nation played at the venue after they decided to move away. Is that true . I believe what the New York Times indicated was another venue opened in the marketplace, so now you had a two venues for the shows that were not going to Madison Square garden and that the number of shows from all the major promoters went down as a result of that increased competition. Ive not heard of any allegations that we changed in any way our booking of concerts for the venue. Its a matter that i watch very closely given the profile of the new york market and i understand every decision about every show where it was placed and why. We have records determining that in no case was there any retaliation in the placement of shows. Your last word on barclays . I would note the report in 2019 found numerous instances of live nation and threatening and retaliating against the venues once they moved away from ticketmaster and in one case, the live nation president told the venue that they would go nuclear if they left so the threat is really and its been documented in happens across many venues. He defended his market position, one element of saying it was a battle of the box. Have you run into that phenomena . The ticketing companies, one of the things they are supposed to do is have solutions and for the leading Ticket Company not to be able to handle the bots for me is pretty unbelievable. You cant blame the bots for what happened to taylor swift. If there is more to the story that youre not hearing. Ms. Bradish you probably heard or read in the testimony three things he thinks needs to be done, which included all in pricing of tickets, fighting deceptive urls as an example, and creating a civil action under the bots act. Any reaction to those suggestions . What we have been talking about today which is the antitrust problem and the fact that live nation and ticketmaster because of its power has the incentive to do things to exclude competition in all of its markets up and down the supply chain for Live Entertainment. So, i appreciate the suggestions. Many of them may be good ideas but it does not change the fact that live nation and ticketmaster is a monopoly because that is the incentive to exclude the competition. Thank you, madam chair. Thank you, senator durbin. Next up, senator lee. Thank you, madam chair. Id like to start with you. Back in 2010 the antitrust complaint filed by the department of justice against the proposed merger between ticketmaster and live nation among other things ticketmaster had at the time and 83 market share with no competitor, no single competitor having more than 4 of the market. It also alleged that for its part it was ticketmasters biggest customer and with the leading concert promoter at the time of course it also alleged live nation had become competing directly with ticketmaster. Rising over a very short period of time to 16 of the market share in just two months kind of a meteoric rise, why did the department of justice settle what seems to be a strong case that appears to involve the elimination of head to head competition with the monopolists and would you agree what we have here is not a shortcoming necessarily about the antitrust law, but the error perhaps gross negligence in enforcing them . I think there are two elements why they would take the dissent degree rather than pursue the case in court. Obviously the case in court involves risk and the fact is to pursue the merger in court and recent experience backs that up is difficult to win a vertical merger. But its hard to given the current state of the law to pursue the vertical merger case. So that will make them in many cases hesitant to do that. The second issue i think that comes up here is the need for witnesses and the court case. In this situation where there is a pervasive fear of the dominant firm where venues and promoters and other independent rivals will potentially suffer consequences that history has since then suggested is the case, they have to testify in court and to get someone to take that risk is not an easy ask. If im not mistaken, theyve pitched this as a horizontal merger, didnt they, and it was identified . Up when theres a horizontal component, the remedy, the conduct remedy goes to the vertical part of the issue. The Consent Decree includes the investiture and prohibitions on time, on time the ticketing services and Concert Promotions. Do you want to say anything about how those have worked in practice and why . The investigation that culminated in the modifications of the Consent Decree show that in fact this was repeatedly violated. There were six instances but also it pointed to the pervasive environment of fear of retaliation. And as a result, it shows when a company has incentives to act in a particular way, the Consent Decree isnt necessarily going to stop them from doing that. I acknowledge that the department of justice alleged these issues in 2019, which led to our decision to extend the decree. We didnt feel it made sense to be seen as the defending series of retaliation or threats. Its not our business practice. It goes against our fundamental alignment with the artist and the idea that we would ever put our interest ahead of theirs. So we were comfortable extending the decree. As she mentions, there were several things that changed because we have different interpretations and one of the things weve done as an instance where venues are seeking the concert agreement into an overall bill, weve eliminated that so there cant be any instance where theres the perception of threats or retaliation associated with of that at the venues request. So we simply eliminated that from our service along with the establishment of monitors to make sure that any venue employee or others could report any issues. Is it accurate to say that at a minimum, live nation at a minimum was a motivated and capable competitor . At the time of the merger. To say live nation was an emerging competitor and likely very capable competitor . I would say that live nation at the time was finding that it was very difficult to build its own ticketing system. One of the driving motivations to the ticketmaster merger was the feeling that it wasnt going to successfully build its own system and it sought to find one that could serve its needs. Im out of time but they have sold 6 million tickets and they did rise to prominence in six months. We will get to that. Thank you madam chair. I will start with you. As a former antitrust attorney studying these markets, do you agree that the ticketing market was more competitive when ticketmaster was completed with separate companies . Especially where you have a potential entrant showing the ability to increase the market share rapidly and with Great Success that is precisely the kind of pressure that you would want to have to make sure they act in a competitive fashion. The loss of that is the loss of competition. We have heard serious concerns from artists, promoters, venues and to use the ticketing service exclusively. How else would you explain the fact that ticketmaster has 80 of the major venues contracted in the u. S. . It is absolutely in our policy to not pressure, threaten or retaliate against the venues by using the content is a part of the ticketing discussion. Mr. Michelson, have you seen live nation leveraging is a leading concert promoter to pressure venues to ticketmaster for primary ticketing and are they able to do that . When speaking with people that either own or manage venues, their biggest fear is if they leave ticketmaster, they will lose content. So whether it is said or not, it is implied that if i dont use ticketmaster, im not going to get all the shows that i would like to have. And by the way, if you look at the difference between the target center in minneapolis and of the Energy Center in st. Paul, the target center is ticketed by access and the excel Energy Center is ticketed by ticketmaster. Look at the number of shows that play excel and you will see they far exceeded the number of shows that play target and when you look and break it down a little further you will see most of the shows that play our live nation shows and they bring very few to the access controlled venue of the target center. Thanks for that local reference. One way that live nation eliminates by locking venues into the multiyear contracts with her three years, five years, seven years if you tied up 80 of the major concert venues, where is there room for one of your competitors to get in the door . Yes, senator. First i would note the 80 references from the 2008 department of justice study and we believe there are market shares substantially lower than that. How much lower . A variety of ways weve estimated the market share depending on what you include we believe the market share will be somewhere between 50 to 60 . Keep going. I will absolutely acknowledge that it is a Standard Practice of venues in the United States that owned the ticketing rights and maximize the value of the ticketing rights they own by having longterm exclusive agreements with primary ticketing companies. Those tend to last three to five years on average. I would note a very specific indication of the high level of competitiveness is first with almost every contract renewal we have over the past decade, more of the money gets accrued to the venues as opposed to the primary ticketing provider which would be one indicator of a very competitive marketplace. A second i would note the success adding roughly 15 as primary ticketing clients showed the level of movement. Do these type of exclusive contracts shut out competitors . If you cant guard anyone else, what are you going to do . Exactly and i think it is a standard given that the longer the exclusivity in the contract, the greater the risk of the competitive fact. The fact that they are able to get this length of contract indicates something about their market power. It makes it harder for a newer entrance to get into the market if everybody is already tied up. Do you think that, to go to another topic, that live nations Concert Promotion business into the fact that they are combined has made it harder for you to compete the primary ticketing . Typically we will go with a prospective client and show the technology and they will get excited about how its going to make the experience better for their fans and allow them to run their business better and then they start to think about the threat and they will talk and discussions will often close at that point because they have heard or threatened in a way that they know they will lose concerts if they move away from ticketmaster and one other thing that i would note that is scary on that last topic is in response to some of the oversight and what has happened recently we have seen ticketmaster moving from five years which seems to be the standard length of the contract industry to ten. Weve turned a lot of things down so that if there is more pressure, then we find a lot of these decadelong deals, so theres not a lot of time. If we want competition it is going to be very hard to change. A longer contract this week that even harder. Thats what theyve been pushing for recently. Mr. Lawrence, what was the amount you said the percentage of your tickets, some of the highest ones you had recently that were fees . Typically there will be a 50 or closer to 50 fee added on top. We have seen outlandish numbers like we had a show last spring where there was an 80 fee on top of the base price and we have no say until it goes on sale. You heard mr. Lawrence. With market power which we all know exists. We would be kidding ourselves if we said it doesnt, what would you do to reduce these fees . The fees are set up by the venues. They are consistent with the other venues in the marketplace and cover the cost of the operation of those venues. Mr. Lawrence wants to reply. We definitely ask venues before almost every show what is the ticket fee going to be, both ones they own and just offer great and they certainly dont take responsibility for the fees. I dont know who is doing the fees, but we ask that question to the venues and they say not only do we not choose what it is, we dont even know what it is it cant tell you what its going to be. Last word, transparency would be helpful to know what the fees are is that right . Absolutely. The market cant work well without transparency. Theres been transparency. Okay with that, senator cornyn. Thank you very much. Appreciate all the witnesses being here. This obviously is a concerning status quo. I just want to reflect a couple of years back during the height of the pandemic we wondered whether any of these venues would survive including in my state in texas and its great to see the Work Congress did would set the stage as he and other support senator klobuchar had a positive impact on preserving many of these especially smaller venues and making it possible for many of the Small Businesses which i guess you would qualify as a Small Business and continue to provide entertainment in these venues. I think what we have heard today does cry out for some response by congress, but candidly, i am not sure the antitrust laws are the best tool in the toolbox, but thats something that we will be talking more about in the near future. Im intrigued by a couple of statements. You said you have an artist First Business model and then you later said you would never put your interests ahead of theirs. Is that your testimony . Yes, senator, that is the approach of the business. Culturally, we believe it is all about getting the artist on stage and letting them connect with their fans and we believe that if we support that and consistently act that way, then we will have a long and successful business working with artists and providing them services. I guess without the artists, you wouldnt have a business. Thats correct. Has that been your experience that live nation never puts their interest ahead of the artists . And that they have an artist First Business model . I think generally when we show up to play a show, the people that work at the venue absolutely try to put up the best concert. I think that the places where sometimes maybe you could feel like its not artist first is just the infrastructure of the way some of the deals with the artists when you look at the settlement sheet at the end of the night, which breaks down who gets paid what. Some of those line items where we have no say in setting the prices of those things, yet some of them are live nation directly setting the price for things that they are paying to other entities that they might own, which directly impact the profit pool for which the artist pay has been derived. Those are the moments where i wouldnt say its not artist first is to say but those are the moments where it feels like we are not truly aligned in our incentives. For your band to make six dollars out of a 42 ticket price doesnt strike me as artist first. I would agree with that