Live Nation admits to helping artists scalp their own tickets to make more money

Live Nation, the promotion company that merged with the ticket-selling platform Ticketmaster in 2010, admitted to Billboard that it had a quiet practice of helping performers sell thousands of tickets on resale sites at higher prices, rather than offering them at face value to fans.

Billboard’s report was published Friday but came about because of its receipt of a secretly recorded phone call that took place in February 2017. On it, Live Nation’s president of US concerts Bob Roux is heard talking to Metallica’s longtime “ticketing consultant,” sometimes-tour manager, sometimes-merch coordinator Tony DiCioccio. DiCioccio asks Roux to help him sell 88,000 tickets to Metallica’s upcoming tour on resale sites — with added profits benefiting both Live Nation and Metallica — and Roux agrees, strategizing to transfer thousands of tickets into an account run by a broker Live Nation was directed to hire. (The band members claimed to be unaware of the scheme.)

Live Nation now says it did this for “about a dozen artists” between 2016 and 2017, but “requests have declined virtually to zero as tools like dynamic pricing, platinum seats and VIP packages have proven to be more effective at recapturing value previously lost to the secondary market.” It’s now “standard practice” to use these other options, the promoter told Billboard, to “help tour prices closer to true market value.”

“True market value” is a term that’s been used quite often by major players in the event ticketing industry in the past few years, as a polite way of implying that performers should be charging the highest price that devoted fans will be willing to pay to see them. Astronomical prices for high-profile artists — including, notoriously, Taylor Swift, who reportedly sold tickets to her most recent tour for as much as $500 — have been increasingly controversial among concertgoers, who have not been as easily enchanted by “VIP” or “Verified Fan” programs as these companies would have liked to believe.

By listing tickets directly on resale sites, artists get an out: making it seem as if they are not the ones setting the high prices, but rather are helpless to prevent escalation in an open marketplace. “Such arrangements may be legal but are rarely discussed openly, given concerns about how fans will perceive them,” Billboard reports, citing tour company executives.

Ironically, the Metallica scheme didn’t end up making a ton of extra money for any of the major players on the call. In fact, the broker responsible for selling 4,400 tickets per show for 20 dates of the tour wasn’t able to sell them all, and attempted to keep much of the slim profit for himself as recompense for a fool’s errand. (He now runs a rival promotion company called Outback Presents.)

It’s hard to describe the ticketing industry as anything other than deeply suspect, and a continual headache for consumer protection groups and government agencies. Throughout 2016, when these secretive conversations were taking place, both New York state and the federal government were focused on legislation preventing the use of scalper bots that would jack up ticket prices. Artists and promoters doing this price gouging themselves was not on the docket.

More recently, the Federal Trade Commission hosted a period of open comment on ticketing fees, after a study published by the Government Accountability Office found that the average ticket fee is now 27 percent of a ticket’s face value. The FTC received 7,000 comments, largely from angry consumers, before hosting a public workshop this June with industry leaders and economists that devolved at several points into minor chaos.

Meanwhile, the Justice Department is investigating Live Nation for anti-competitive practices after a New York Times report brought forward several allegations of the promoter threatening venues for selling tickets through Ticketmaster competitor AEG. (“[The venues] were told they would lose valuable shows if Ticketmaster was not used as a vendor, a possible violation of antitrust law.”)

The mess is, in part, tied to the fact that it’s difficult in the streaming age for musicians to make money from selling their music — though last year’s Music Modernization Act should help ease this problem over time, only true mega-pop stars make serious money from streaming services right now — and rely heavily on merch and touring revenue. High-priced VIP packages have been somewhat of a solution, in that fans are given a more clear-eyed option to spend extra money to support an artist they care about, but the definition of what the “true market value” is for the extremely emotional experience of, say, a Taylor Swift concert remains murky and ripe for exploitation.

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Correction: An earlier version of this story misstated the relationship between Live Nation and the broker.