In his opening remarks at a Senate Judiciary Committee hearing, Clyde Lawrence, singer-songwriter and member of the band Lawrence, explained how a fan’s ticket money would be shared between a hypothetical concert played at a venue owned and operated by Live Nation, the parent company of Ticketmaster.
“Live Nation and Ticketmaster often acts as three things at the same time — the promoter, the venue and the ticketing company,” he said Tuesday.
Lawrence described a hypothetical sold-out show at a Live Nation-owned and Live Nation-operated venue.
“When an artist plays these venues, they are required to use Live Nation as the promoter. Far from simply advertising, the promoter coordinates and pays the upfront costs to put together a concert, such as renting and staffing and the venue and striking a deal with the performer. Since both our pay and theirs is a share of the show’s profits, we should be true partners aligned in our incentives — keep costs low while ensuring the best fan experience,” he said. “But with Live Nation not only acting as the promoter, but also the owner and operator of the venue, it seriously complicates these incentives.”
In negotiating, artists have no leverage over Live Nation, he said.
“At the end of the show, costs will have eaten into most of the money made that evening, and due to Live Nation’s control across the industry, we have practically no leveraging in negotiating with them. If they want to take 10% of the revenues in facility fees, they can and have. If they want to charge $30,000 for the ‘house nut’ (the fixed fee the venue takes), they can and have. And if they want to charge us $250,000 for a stack of 10 clean towels, they can and have,” he told lawmakers.
After these costs have been accounted for, Lawrence said the remainder of the show revenue is split between Live Nation and the band. He explained why this is a problem:
“In the world where the promoter and the venue are not affiliated with each other, we can trust that the promoter will work to get the best deal from the venue. However, in this case, the promoter and the venue are part of the same corporate entity. So these line items are essentially Live Nation negotiating to pay itself. Does that seem fair?” he asked.