79.1 F
Los Angeles
Friday, Aug 19, 2022

Venues Grapple With Ticketmaster Costs

As operator of the Hollywood Bowl, the Los Angeles Philharmonic Association each year must perform an exacting task — setting ticket prices for each section of the 18,000-seat Bowl and for each of the venue’s regular season events.

The L.A. County Department of Parks and Recreation, which has owned the iconic venue since 1924, then reviews those prices and brings a proposal before the Los Angeles County Board of Supervisors, which debates the changes publicly before voting on them.

In September, the board unanimously approved the latest prices, passing a measure with a dizzying level of granularity. For the Bowl’s “Sunday World Nights,” for example, the measure ruled out price hikes “for bench sections D, E, G2, J2, F, K, M, N, L, P, R, S, T & W (11,210 seats).”

But by the time Hollywood Bowl tickets go on sale to the public, the carefully curated ticket prices are often inflated by as much as 30% and sometimes more — fees that go not to the county, the publicly owned Hollywood Bowl or even the L.A. Phil.

The ticketing fees go directly to industry juggernaut Live Nation Entertainment Inc.

Through third-party arrangements, the L.A. Phil uses Live Nation’s ticketing subsidiary, Ticketmaster Entertainment, to sell entry to its shows. Ticketmaster collects fees on each

ticket purchase, which are added to the county-

approved price.

While base ticket prices at the Bowl are scrutinized, ticketing fees receive no review or debate before the public. A Business Journal analysis of the Bowl’s 2019 summer lineup found that Ticketmaster’s fees increased prices by an average of 29%.

“The county wants to make sure that there are some tickets relatively easy to access pricewise,” said Kevin Regan, deputy director of the parks department. While Live Nation’s fees appear to weaken the county’s work to make shows affordable, Regan said having some control over ticket costs by setting the base price is better than having none.

Messages left with Live Nation for comment were not returned.

The business of live music

Ticketing fees help drive Live Nation’s business. Last year, the company’s ticketing arm grew revenue by 13.2% annually to $1.53 billion, revenue that “primarily consists of service fees charged at the time a ticket for an event is sold,” according to the company’s annual report.

Beverly Hills-based Live Nation, which acquired Ticketmaster in 2010, controls 80% of the U.S. primary ticketing market for music and sports events, according to trade publication Pollstar.

It also controls more than half of the market for U.S. concert promotions, according to Pollstar, meaning that when venues want to book a popular artist, group or event, more often than not, they have to go through Live Nation.

If the Bowl — or any venue — were to challenge Ticketmaster’s fees, it could lose access to the acts Live Nation manages and promotes, said John Kwoka, an economics professor at Northeastern University in Boston.

“There are very few venues willing to risk alternatives to Live Nation,” Kwoka said.

Antitrust lawyers argued in 2010 that the Ticketmaster acquisition would create

anti-competitive practices in the live event market. Today, many of these same lawyers, such as Diana Moss, president of the American Antitrust Institute, say their predictions weren’t far off.

Other public venues in L.A., such as the Greek Theatre, and around the country — from the Gila River Arena in Glendale, Ariz., to the Bill Graham Civic Auditorium in San Francisco — work with Live Nation’s Ticketmaster to sell event tickets. The Hippodrome Theatre in Baltimore uses Ticketmaster even though Live Nation sold the venue to the Maryland Stadium Authority, a public entity, 10 years ago.

For shows at each of these venues, fees tacked on by Live Nation are similar to those charged for Hollywood Bowl shows. But unlike the Bowl, many of these public venues don’t have local officials setting their base ticket


Under the fee

Neither the Bowl nor Los Angeles County appears to have revisited ticket price-setting policies since the Live Nation-Ticketmaster merger. But rising ticket fees have become a source of frustration for fans and families looking to attend shows at the Hollywood Hills venue.

George Kitson, a 36-year-old television writer in Burbank and father of two, recently purchased four tickets for his family to see “The Little Mermaid” film-to-concert experience at the Hollywood Bowl on May 17. The Bowl’s website directed Kitson to Ticketmaster, where he selected four tickets for $67.50 each. But when he clicked “place my order,” Kitson learned there was a $20.20 order and servicing fee on each of his tickets, raising the total by $80.80 or 23%.

“I was incensed, but because I had already talked about it with my kids and they wanted to go, we did it anyway,” he said.

For a recent show featuring Christian rock artist Chris Tomlin, the Bowl set upper level ticket prices at $19.95, roughly 30% to 40% less than other stops on the artist’s “Holy Roar” tour. But that ticket ended up costing $30.88, or 36% more, after Ticketmaster fees.

Other mock purchases of Bowl tickets resulted in an average purchase fee of 29%, according to a Business Journal analysis.

For private live events, that’s a common markup rate. According to a 2018 report by the Government Accountability Office, Live Nation and other primary ticketing companies in the United States levy average fees of about 27% on tickets.

Public-private partnership

The Hollywood Bowl is about halfway through a 30-year operations agreement with the L.A. Phil. Under that agreement, the private L.A. Phil pays for planning and promotion of shows, venue maintenance, and operational costs including advertising, insurance, food and merchandise.

The L.A. Phil subcontracts much of that work — including promotion and ticketing — through private agreements that aren’t subject to public scrutiny. Show promoters decide which ticketing service they’ll use, L.A. Phil spokeswoman Lisa White said. That service tends to be Ticketmaster.

“Third-party promoters sell tickets through Ticketmaster,” White said. “The L.A. Phil does not have a contract with Ticketmaster.”

As a result, Live Nation has outsized control over much of the seasonal lineup and ticketing procedures at the Hollywood Bowl, said Kwoka, the economics professor. “All these agreements are essentially between private parties, and there is no requirement that Ticketmaster put them on the public record,” he said.

For popular music acts, Kwoka added, venues might turn to Ticketmaster’s services to ensure the software doesn’t crash under high levels of demand. “Venues trust Ticketmaster’s software and experience,” he said.

But the main reason many venues rely on Live Nation is because of their extensive talent lineup. Kwoka said there’s a perception that venues could lose access to those performers if they don’t use Live Nation’s Ticketmaster service to book those shows.

“There is no viable alternative to Ticketmaster, and Ticketmaster knows it,” Kwoka said.


Featured Articles


Related Articles