Ticketmaster and its online reselling company TicketsNow have been subpoenaed by the US Department of Justice as well as the Canadian Competition Bureau. The probe is part of a larger concern in a proposed merger between Ticketmaster which handles artist management and ticket sales and Live Nation, the largest concert promoter in the US.
Wall Street Journal reporter Ethan Smith broke a story in March showing how Ticketmaster works with artists, such as Neal Diamond, to set aside front row tickets to be sold at scalper prices with the extra profits split between Ticketmaster and the artist. According to the article:
Ticketmaster facilitates the secondary ticket market and profits from it. According to several managers of top artists and Ticketmaster executives, the company routinely offers to list hundreds of the best tickets per concert on one of its two resale Web sites -- and divides the extra revenue, which can amount to more than $2 million on a major tour, with artists and promoters.
Tickets for a March 27 Britney Spears concert at Mellon Arena in Pittsburgh were priced earlier this week at $39.50 to $125 apiece on Ticketmaster.com. But some of those same classes of seats were being offered at the same time through the "TicketExchange Marketplace" for as much as $1,188.60. The link to the Marketplace page was marked, "Browse premium seats plus tickets posted by fans."
Critics have long accused Ticketmaster of monopolistic practices and high fees, a situation that will only worsen if it merges with Live Nation. Ticketmaster CEO Irving Azoff claims "the business model is broken." But the question remains: how does a merger fix it?