PEARL JAM'S ANTITOUST COMPLAINT: QUESTIONS ABOUT CONCERT, SPORTS, AND THEATER TICKET HANDUNG CHARGES AND OIHER PRACTICES ^^ ^^^ ^Y 4. G 74/7: J 24 Pearl Jan's Antitrust Conplaint: Qu... HEARING BEFORE THE INFORMATION, JUSTICE, TRANSPORTATION, AND AGRICULTURE SUBCOMMITTEE OF THE COMMITTEE ON GOVERNMENT OPERATIONS HOUSE OP REPRESENTATIVES ONE HUNDRED THIRD CONGRESS SECOND SESSION JUNE 30, 1994 F*rinted for the use of the Committee on CU)vermn6ia0frainBtt^ ^^6 8 199b U.S. GOVERNfMENT PRINfTING OFFICE 85-914 CC WASfflNGTON : 1995 For sale by the U.S. Government Printing Office Superintendent of Documents, MaU Stop: SSOP, Washington, DC 20402-9328 ISBN 0-16-047228-8 tEARL JAM'S ANTITRUST COMPLAINT: QUESTIONS ABOUT CONCERT, SPORTS, AND THEATER TICKET HANDUNG CHARGES AND OTHER PRACTICES _____^_=~ Y 4. 5 74/7: J 24 Qu. Pearl Jan's Antitrust Conplaint: HEARING BEFORE THE INFORMATION, JUSTICE, TRANSPORTATION, AND AGRICULTURE SUBCOMMITTEE OF THE COMMITTEE ON GOVERNMENT OPERATIONS HOUSE OP REPRESENTATIVES ONE HUNDRED THIRD CONGRESS SECOND SESSION JUNE 30, 1994 Governme&t««^^/|gfcT^|^ Printed for the use of the Committee on U.S. GOVERNMENT PRINTING OFFICE : 1995 g^914 CC WASHINGTON Office For sale by the U.S. Government Printing Washington, DC 20402-9328 Superintendent of Documents, Mail Stop: SSOP, ISBN 0-16-047228-8 COMMITTEE ON GOVERNMENT OPERATIONS JOHN CONYERS, Jr., Michigan, Chairman CARDISS COLLINS, Illinois WILLIAM F. CLINGER, JR., Pennsylvania HENRY A. WAXMAN, California AL McCANDLESS, California MIKE SYNAR, Oklahoma J. DENNIS HASTERT, Illinois STEPHEN L. NEAL, North Carolina JON L. KYL, Arizona TOM LANTOS, California CHRISTOPHER SHAYS, Connecticut MAJOR R OWENS, New York STEVEN SCHIFF, New Mexico EDOLPHUS TOWNS, New York CHRISTOPHER COX, California JOHN M. SPRATT. JR., South Carolina CRAIG THOMAS, Wyoming GARY A. CONDIT, California ILEANA ROS-LEHTINEN, Florida COLLIN C. PETERSON, Minnesota DICK ZIMMER, New Jersey KAREN L. THURMAN, Florida WILLIAM H. ZELIFF, Jr., New Hampshire BOBBY L. RUSH, Illinois JOHN M. McHUGH, New York CAROLYN B. MALONEY, New York STEPHEN HORN, California THOMAS M. BARRETT, Wisconsin DEBORAH PRYCE. Ohio DONALD M. PAYNE, New Jersey JOHN L. MICA. Florida FLOYD H. FLAKE, New York ROB PORTMAN, Ohio JAMES A. HAYES, Louisiana FRANK D. LUCAS. Oklahoma CRAIG A. WASHINGTON, Texas BARBARA-ROSE COLLINS, Michigan BERNARD SANDERS. Vermont CORRINE BROWN, Florida (Independent) MARJORIE MARGOLIES-MEZVINSKY, Pennsylvania LYNN C. WOOLSEY, California GENE GREEN, Texas BART STUPAK, Michigan JUUAN ES'STEIN, Staff Director Matthew R. Fletcher. Minority Staff Director Information, Justice, Transpobtation, and Agriculture SuBCOMMirrEE GARY A. CONDIT, California, Chairman MAJOR R. OWENS, New York CRAIG THOMAS, Wyoming KAREN L. THURMAN, Florida ILEANA ROS-LEHTINEN, Florida LYNN C. WOOLSEY. California STEPHEN HORN. California BART STUPAK, Michigan Ex Officio JOHN CONYERS, Jr., Michigan WILLIAM F. CLINGER, Jr., Pennsylvania John Edgell, Professional Staff Member Aurora Ocg, Clerk Diane M. Major, Minority Professional Staff (II) CONTENTS Page Hearing held on June 30, 1994 1 Statement of: Collins, Tim, manager, Aerosmith, Boston, MA 47 Condit, Hon. Gary A., a Representative in Congress from the State of California, and chairman, Information, Justice, Transportation, and Agriculture Subcommittee: Opening statement 1 Downs, Bertis, attorney, R.E.M., and adjunct professor. University of Georgia School of Law, Athens, GA 54 Gossard, Stone, guitarist, Pearl Jam, Seattle, WA, accompanied by Jeff Ament, bassist; Kelly Curtis, manager; and Mike McGinley, business manager 6 Marsh, Dave, rock and roll historian, New York, NY 66 Morris, Chuck, manager. Nitty Gritty Dirt Band and others, Denver, CO 75 Rascoff, Joe, managing director, RZO Inc 73 Rosen, Fred, chief executive ofTicer, Ticketmaster 92 Rothman, Claire L., general manager, Los Angeles Forum, Inglewood, CA 109 Letters, statements, etc., submitted for the record by: Collins, Tim, manager, Aerosmith, Boston, MA: Prepared statement 50 Corwers, Hon. John, Jr., a Representative in Congress from the State 01 Michigan, and chairman, Committee on Government Operations: Prepared statement 4 Downs, Bertis, attorney, R.E.M., and adjunct professor, University of Georgia School of Law, Athens, GA: Prepared statement 59 Marsh, Dave, rock and roll historian. New York, NY: Prepared statement 69 Owens, Hon. Major R., a Representative in Congress from the State of New York: Prepared statement 88 Pearl Jam: Prepared statement 10 Rosen, Fred, chief executive officer, Ticketmaster: Information concerning Ticketmaster Corp. and Subsidiaries 94 Letter from Pam Lewis, Garth Brooks' manager 115 Number of part-time employees employed at Ticketmaster 117 Rothman, Claire L., general manager, Los Angeles Forum, Inglewood, CA: Prepared statement Ill (III) PEARL JAM'S ANTITRUST COMPLAINT: QUESTIONS ABOUT CONCERT, SPORTS, AND THEATER TICKET HANDLING CHARGES AND OTHER PRACTICES THURSDAY, JUNE 30, 1994 House of Representatives, Information, Justice, Transportation, AND Agriculture Subcommittee OF THE Committee on GtOvernment Operations, Washington, DC. The subcommittee met, pursuant to notice, at 9 a.m., in room 2154, Rayburn House Office Building, Hon. Grary A. Condit (chair- man of the subcommittee) presiding. Present: Representatives Gary A, Condit, Major R. Owens, Karen L. Thurman, Lynn C. Woolsey, Bart Stupak, Craig Thomas, and Stephen Horn. ^so present: Representative Colhn C. Peterson. Staff present: John Edgell, professional staff member; Aurora Ogg, clerk; and Diane M. Major, minority professional staff. Com- mittee on Government Operations. OPENING STATEMENT OF CHAIRMAN CONDIT Mr. Condit. The subcommittee will come to order. The House Government Operations Subcommittee on Information, Justice, Transportation, and Agriculture has investigative and oversight re- sponsibilities over certain Federal Grovernment agencies. Our hearing this morning, Pearl Jam's antitrust complaint, ques- tions about concert, sports, and theater ticket handling charges and other practices, falls within our jurisdiction over the Justice De- partment and oversight of antitrust matters. A 1991 decision by the Antitrust Division of the Justice Depart- ment allowed Ticketmaster to acquire its leading competitor, Ticketron. This calls into question the process for antitrust merg- ers. We will be asking the Justice Department to explain this proc- ess at a future date. We have formally requested documents relating to this merger in a letter to Attorney Greneral Reno and to the Assistant Attorney General, Mrs. Bingaman. The subcommittee intends to pursue this matter. Most Americans would not be expected to spend a great amount of time thinking about legal technicalities involving antitrust is- sues. But they do understand the harmful effects of monopolies in the marketplace. (1) The America free enterprise system thrives on a competitive marketplace. The consumer suffers when there is no competition. Monopolies fly in the face of what America is all about. That is the foundation of*^ effective antitrust policy. And almost every American consumer has something at stake. That is what this hearing is all about: Is there a monopoly in the ticket distribution industry? In short, who is there to protect con- sumers? Any consumer who has bought a ticket to a sports event, a con- cert, or a theater show and has had to pay $5 to $8 per ticket just for handling charges, I know a little bit about this myself Is the ticket distribution industry for the consumer's convenience or is it a cartel? We need to investigate the serious allegations made against Ticketmaster. And we intend to have a full and fair review of the charges. No one will dispute that Ticketmaster is good at what they do. They are. In fact, it is clear that Ticketmaster has been able to eliminate its competition because it is very, very good at what it does. No one disputes the convenience of Ticketmaster's services. Ticketmaster is a well-run, professional company that provides a needed service to consumers and performers. The key question is whether recent contractual agreements be- tween Ticketmaster and most major stadiums and concert promot- ers have violated Federal antitrust law. This hearing follows a legal brief filed by Pearl Jam—a Seattle, WA-based alternative rock band—with the Justice Department to investigate alleged antitrust violations of Ticketmaster, a national ticket distribution company. The Justice Department has announced a formal investigation of Ticketmaster and the ticket distribution industry. This subcommit- tee has a responsibility to pursue an issue that touches the ordi- nary daily lives of millions of consumers. The subcommittee in- tends to offer an opportunity for all sides to air their views. We are honored to have representatives of both Pearl Jam and Ticketmaster, together with other respected members of the music industry here with us today. Since the Justice Department is at an early stage in its inves- tigation, they will not appear today. The subcommittee expects to hear from the Justice Department at a later date. We are honored to have a number of witnesses willing to tell it like it is from their perspective. Some of them may have put their careers at some level of risk by testifying today. We are grateful for their cooperation. Having said all this, we will get to those witnesses as quick as we can, but I must first allow the subcommittee members to make any opening statements that they may want to make. We are hon- ored today to have the