If Pearl Jam couldn’t do it, who can? America’s most powerful rock band thought it had Ticketmaster in its sights this year. By swearing off the ticketing giant during their summer tour, Pearl Jam tried to crack Ticketmaster’s dominance in the concert business. By year’s end the corporation was more powerful than ever, but the Seattle rockers had given the company a public-relations nightmare by bringing some of the industry’s back-room dealings into the light. As a result, a previously rigid Ticketmaster started bending its service-fee policies so that other alternative-rock bands could mount low-cost tours without fleecing their fans.
“I’m not sure it helped Pearl Jam,” says David Sestak, who co-manages Live, “but it definitely helped consumers.”
The saga dates back to early ’94. Committed to paring hidden costs passed on to concert fans and emboldened by their newfound status as America’s best-selling rock act, Pearl Jam laid down guidelines for their upcoming tour: $1.80 service fees clearly spelled out on $18 tickets. Ticketmaster was used to charging concertgoers a service fee that was two or three times that amount with fees on top-dollar tickets reaching as high as $18 – and a showdown of Goliath vs. Goliath was set.
Pearl Jam quickly abandoned their tour plans, and after being prompted by Justice Department officials, they filed an antitrust complaint against Ticketmaster, triggering a federal investigation into the company’s alleged monopoly. (Although it was the Justice Department that had approached Pearl Jam, it was often wrongly reported that the band initiated the complaint.) Pearl Jam claimed that Ticketmaster, after scooping up its competitors, abused its marketplace dominance by collecting sky-high service fees and signing exclusive deals with major concert venues, leaving consumers and artists with no other alternative. (Approximately half a dozen small regional companies scramble for the 30 percent of the market that Ticketmaster doesn’t command.)
Ticketmaster’s exclusive contracts were invisible to consumers until Pearl Jam raised the issue. The brainchild of Ticketmaster CEO Fred Rosen is simple: Inflate service fees, particularly for concert tickets, into the $4 to $6 range, then offer 20 percent of Ticketmaster’s profits for the entire year at a particular location – as much as $500,000 -if the venue agrees to use Ticketmaster exclusively. In Chicago, for example, a band can’t play the Rosemont Horizon, the United Center, Soldier Field, the Arie Crown Theater or the New World Music Theater -the major venues in the city – unless they agree to have Ticketmaster sell and distribute tickets for shows at those venues. What’s more, many venues have stopped staffing their own box offices for concerts since no service fees are generated at those sites.
When Pearl Jam’s Jeff Ament and Stone Gossard appeared before a Congressional subcommittee looking into the ticketing industry in June 1994, the media covered it as a novelty story – grunge rockers visit the Hill – without giving any weight to the band’s charges that consumers were being ripped off. It didn’t help that other bands were reluctant to join the crusade. R.E.M.‘s attorney and co-manager, Bertis Downs, testified against Ticketmaster during the hearings, but R.E.M. ended up using the company on their Monster tour, with over-the-phone service fees hitting $6.50 on a $40 ticket.
The web of exclusive deals is what hurt Pearl Jam the most during its aborted ’95 tour. Locked out of mainstream venues, the group sold tickets through newcomer ETM Entertainment for shows at fairgrounds, soccer fields and state parks in such distant locales as Casper, Wyo., and Las Cruces, N.M. And then things got even worse. A downpour forced the cancellation of a show at Wolf Mountain Amphitheater, in Salt Lake City, and a vocal San Diego sheriff, who feared security problems, derailed the show in Eddie Vedder’s former hometown.
Pearl Jam didn’t fare any better in Washington, D.C. A bill requiring that ticket service fees be spelled out on all stubs was defeated, thanks in part to the efforts of two high-powered lobbyists hired by Ticketmaster. That left the Justice Department’s investigation as the band’s best hope. For more than a year, department staffers interviewed artists’ managers, tour professionals, Ticketmaster competitors and box-office staffers to determine if the exclusive contracts violated antitrust laws. Then on July 5, with much of the Capitol empty from the Independence Day exodus, the Justice Department issued a two-sentence statement that said its investigation was closed.
“Getting attacked by a superstar rock band is a lot like being accused of kicking your dog: There’s a general presumption of guilt until proven innocent,” says a Ticketmaster spokesman. “Luckily the facts were on our side, and we prevailed.”
The defeat hit Pearl Jam hard, and all but a handful of the remaining dates of their quixotic tour were canceled. But who really won and who lost?
Before Pearl Jam’s assault, the only debate about tickets in the concert industry was: How high could prices climb? Tours by the Eagles, Rod Stewart, and Elton John and Billy Joel were breaking the barrier on the high end, with seats topping $100, and service fees were never even mentioned. Pearl Jam helped turn the tide by leading a wave of young platinum-selling bands vying for low-est-ticket-price honors, including Green Day ($7.50); the Offspring ($12); Stone Temple Pilots, Soul Asylum, and Hootie and the Blowfish ($18); and Live ($20). In some cases these bands sacrificed a portion of their own profits, but Ticketmaster also made token gestures by cutting its service fees. The charge was $1.50 per ticket for at least one Offspring show, and the company allowed some fans to buy tickets by mail without any service fee. Live successfully lobbied for at least one outlet on each of their tour stops to be able to sell tickets with no service fees.
Pearl Jam also proved that another company could one-up the computerized phone service that Ticketmaster was so proud of. ETM opened some eyes by accepting personal checks from fans, printing customers’ names on each ticket and including bar codes to lock out scalpers and prevent counterfeits – all for a $2.50 service and handling charge.
While it’s claiming victory, Ticketmaster has not yet mastered all its challenges. Class action lawsuits filed by consumers have been tossed out in New York, Florida and California courts, but two other cases are winding their way through federal courts. In March, MovieFone, the telemarketing company best known for its 777-FILM service, filed a suit alleging that Ticketmaster tried to quash MovieFone’s move into the concert business by disrupting its public offering and intimidating potential investors. Meanwhile, separate antitrust suits filed by consumers from 14 states have been consolidated into one case that is awaiting action in federal district court in St. Louis.
As for Pearl Jam, their manager Kelly Curtis promises a bigger, better tour in the summer of ’96, once again bypassing Ticketmaster. Ready for another round?
This story is from the December 28th, 1995 issue of Rolling Stone.
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