Capitol Hill seemed star struck when Pearl Jam's guitarist, Stone Gossard, and bassist, Jeff Ament, sporting velvet shorts and a backward baseball cap, respectively, testified last month before a House Government Operations Subcommittee on possible anti-competitive practices in the ticket-distribution business. Rep. Collin Peterson, D-Minn., told the musicians that he had tried to teach himself same Pearl Jam songs on guitar, Rep. Lynn Woolsey, D-Calif, called them "darling guys." At stake, however, was the future of the $1 billion a year concert industry. "Our band," Gossard testified, "which is determined to keep ticket prices low, will always be in conflict with Ticketmaster."
The touchstone for this debate – as well as an ongoing Justice Department probe of the ticketing business – was a memorandum filed by Pearl Jam with the Antitrust Division of the U.S. Department of Justice on May 6. The memo accused Ticketmaster of having "a virtually absolute monopoly on the distribution of tickets to concerts," charging exorbitant service fees on tickets and "organizing a group boycott against Pearl Jam" when the band tried to launch a low-cost tour independently of the ticketing company this summer. (Ticketmaster denies all the charges.) It's just doesn't seem fair to us the way a lot of this is done," Ament said at the hearing.
Since 1991, when Ticketmaster bought assets of its only substantial competitor, Ticketron (which had been losing millions of dollars a year since 1988), major acts have found it nearly impossible to schedule a tour without involving Ticketmaster.
"We frankly had no choice in the matter," says Ken Sunshine, a spokesman for Barbra Streisand, on booking the singer's recent tour. "Every arena we looked at, it turned out, was through Ticketmaster."
"There are plenty of venues that are not under contract with Ticketmaster," responds Ticketmaster spokesman Larry Solters. "According to a Stanford study, Ticketmaster accounts for just over one-sixtieth of all rickets sold." (Ticketmaster executives would not comment.) Many people in the music industry believe, as Mike Rowe, general manager of the Meadowlands arena, in New Jersey, says, that "bands can't be in the business of coming through here and having their own ticket system." Ticketmaster, it's claimed, keeps ticket sales organized and revenues high. This is often at the expense of fans, however. The service charges that Ticketmaster adds to tickets range from $3 to $6 and can add more than 30 percent to a ticket's face value. One reason these surcharges are so high is because Ticketmaster pays a small fee to venues or promoters for every ticket said in order to maintain its exclusive contracts with them.
In fact, according to industry sources, Ticketmaster has even loaned promoters money to meet the guarantees of stadium acts and has given money to venues for promotion and marketing. Several recent lawsuits call Ticketmaster's dividends to venues "kickbacks." Solters calls them "fair and very visible considerations." When Ticketron ruled the concert business, however, venues paid Ticketron for the convenience of using its ticket-distribution system.
"Ticketmaster is responsive to requests by managers, agents or bands that want to add a quarter onto the ticket price for a foundation or for profit," says one concert promoter. "Everybody has the ability to influence service charges, and nobody's shy about considering service charges as an additional source of income."
Aerosmith manager Tim Collins, who testified at the House hearings, says that when he approached Ticketmaster CEO Fred Rosen last year about lowering the surcharge to Aerosmith's Get a Grip tour tickets, Rosen instead recommended raising the service charge by $1, with half the money going to Ticketmaster and half to the band.
At the House hearings, Rosen said that Ticketmaster's profit margin on each service charge was only 10 cents and that in 1993 the average charge was $3.15.
"What happened is that computerized ticketing provided a tremendous convenience," says Solters. "People embraced that convenience, and it evolved into a necessity. Now the lawyers and the acts don't feel that the consumers should pay for that necessity."
This story is from the August 11th, 1994 issue of Rolling Stone.