President Joe Biden has taken hundreds of billions of dollars from taxpayers and given it to student loan holders, a desperate attempt to buy votes with your money.
Now, the Justice Department is spending taxpayer dollars to buy a different voter bloc: Swifties. The DOJ’s antitrust lawsuit against Live Nation Entertainment is another election-year stunt.
On Nov. 15, 2022, tickets for Taylor Swift’s “The Eras Tour” went on presale for Capital One cardholders, Swift’s first tour since 2018 and the largest tour of her career. At least 3.5 million fans entered Ticketmaster’s “Verified Fan” program ahead of the presale, the largest number of sign-ups in platform history. When the presale went live, 14 million fans showed up to buy tickets, alongside scalper-created bots without presale codes. The staggering 3.5 billion system requests crashed Ticketmaster’s website, forcing Ticketmaster to cancel the presale. Swift immediately mobilized her fan base, saying in an Instagram statement that she was “extremely protective” of her fans and “pissed off” at the “excruciating” fiasco.
The week of the crash, news broke that the DOJ Antitrust Division was conducting an antitrust investigation into Ticketmaster’s parent company, Live Nation Entertainment. The DOJ’s lawsuit, announced last Thursday, seeks to unwind the 2010 merger between Live Nation Entertainment and Ticketmaster. Since the merger, Live Nation Entertainment has operated under a voluntary consent decree with the DOJ to ensure that it is operating legally. If you had any doubt that the case is politically motivated, consider that numerous DOJ staffers were spotted wearing Swift friendship bracelets at the press conference announcing the lawsuit.
The DOJ’s case ignores several basic facts. There is no evidence that breaking up Live Nation Entertainment and Ticketmaster would have better accommodated the unprecedented demand for tickets to the tour. If anything, the situation would likely have been worse, given that vertical integration allows companies to serve customers better through economies of scale. Live Nation Entertainment also faces stiff competition from StubHub, SeatGeek, Vivid Seats, and others.
Additionally, Ticketmaster is not responsible for setting ticket prices — artists are. Online purchasing has enabled much higher ticket prices that are closer to the true market value of the ticket. Artists would like to make tickets available at prices that would allow fans of various income levels to attend. The free market, along with the broader customer base that online purchasing allows, means that prices will rise to the level where those with the most disposable income and desire will pay.
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Artists schedule limited shows with limited seats. There is a market clearing price for access to those shows that is generally much higher than a ticket’s list price. The DOJ claims that Ticketmaster’s fees to soak up some of this difference amounts to monopoly rents, a laughable claim given that Ticketmaster’s net profits are 1.4%. But if tickets can be purchased and then resold for a higher price, that reflects that the original price was too low. Artists should accept this reality and charge what the market will allow, but that would anger fans. It is far more convenient to scapegoat the middleman.
Like the student loan bailouts, the Ticketmaster lawsuit is a case of political pandering. For politicians like Biden, it is easier to cut a check to a voter than it is to explain to him why majoring in basket weaving did not put him in an economic position to pay off his student loan debt. Swift cannot charge her fans the true market price, so politicians are stepping in to provide air cover, shamefully buying votes with your tax dollars in the process.
Tom Hebert is Director of Competition and Regulatory Policy and executive director of the Open Competition Center.