Have you gone to a major concert or sporting event recently? If you have, chances are you’ve bought your ticket through Ticketmaster, which is part of Live Nation. Live Nation handles the ticket side of events, and often also the promotion and even the production. If you tried shopping around to find cheaper tickets to your event, you probably came up empty handed, other than perhaps finding them on a resale site like StubHub. Why? Well, Live Nation has managed to corner the market in ticket sales. For musicians and teams, handing off ticket sales and promotion to a single entity is easy and potentially more efficient than dealing with multiple parties. What that means is that Live Nation may be the only match in town when it comes to buying your ticket. If that sounds like a monopoly to you, you’re right! And what’s more the federal and state courts agree with you.

The courts recently handed down a judgement stating that Live Nation has been acting as a monopoly when it comes to ticket sales. In other words, Live Nation and Ticketmaster have been controlling ticket prices, potentially keeping them artificially high. Now, Live Nation has been fined, although critics claim that fine amounts to a slap on the wrist. So, should you expect any change to ticket prices for your next event? Well, given the barriers to entry for new companies trying to get in are high, probably not, at least for now. Moreover, Live Nation has promised to fight the verdict, claiming that it’s not a monopoly, it’s simply the best at what it does.  

Discussion Questions:

  1. What is a monopoly? How was Live Nation able to build a monopoly position in concert ticket sales? Do you agree with the court ruling? Explain.  
  2. Reflect on the business model used by Live Nation. By acting as ticket seller, promoter, and producer, Live Nation offers certain efficiencies to the bands and teams that collaborate with it. What barriers does this model present to firms trying to enter the ticket selling business? How could it affect the monopoly position that Live Nation holds? In your opinion, does Live Nation need to be broken into smaller entities?