By barring the use of long-term contracts, the legislation risks the unintended consequence of negatively affecting both venues and fans.
aims to take on Ticketmaster by clamping down on the use of long-term contracts to lock up the exclusive ticketing rights of U.S. venues and festivals. But it could backfire in a way that would negatively affect venues and fans.
Titled the Unlocking Ticketing Markets Act, the legislation — introduced on the same day as a second bill from Sens. that would ban hidden ticket fees — is a clear attempt to break Ticketmaster’s grip on the ticketing industry, although it never actually mentions the Live Nation-owned company by name. But while Klobuchar and Blumental believe shortening ticketing contracts will promote competition, the proposal doesn’t seem to consider the benefits these contracts offer the venue clients.
This is a bargaining tool the ticketing companies use to acquire more venue customers, but within that, it’s at the venues’ discretion what kind of deal to take, passing the cost of that loan onto their customers as ticketing fees. If venues haven’t repaid the advance at the end of the contract term, they typically have two options: cut a check to the ticketing company to cover the difference or re-up their deal and borrow more money.
Klobuchar and Blumenthal’s bill would essentially shorten the length of the exclusive ticketing contracts by ordering the Federal Trade Commission to “prevent the use of excessively long multi-year exclusive contracts,” according to a press release announcing the proposed legislation. If the FTC opted to limit ticketing to half of the average terms, Ticketmaster’s competitors would have twice as many opportunities to bid for those contracts the company holds.
A bill focused on contract length also fails to address long-standing complaints that venues often work with Ticketmaster because of a perception that it means parent company Live Nation will bring more events to their building. This sort of business practice is prohibited under the consent decree that has governed Live Nation and Ticketmaster’s operations since merging in 2010, but that hasn’t stopped accusations of anticompetitive behavior.
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