Pearl Jam vs. Ticketmaster: Choosing Sides : Legal file: The pop music world is divided over the Seattle band’s allegations, which led to a Justice Department investigation into possible anti-competitive practices in the ticket distribution industry.


It is perhaps the biggest pop concert summer ever: Streisand, the Eagles, Pink Floyd, the 25th anniversary of Woodstock, “Lollapalooza.” But missing from the roster is America’s biggest-selling band, Pearl Jam.

The reason behind the Seattle quintet’s MIA status is the talk of the pop music business from coast to coast.

It was just over a week ago when the news broke that Pearl Jam had filed a complaint on May 6 with the U.S. Justice Department and inflamed what one insider has described as a “holy war” between that band and the biggest ticket agency in the country, Ticketmaster.


Pearl Jam claims that the Los Angeles-based company used its influence to keep promoters from booking the band’s low-cost summer tour. In the memorandum filed with the Justice Department’s anti-trust division, the band alleges that Ticketmaster has a national monopoly over ticket distribution and that service fees charged by the agency drastically inflate ticket prices. Daniel Hamilton, a spokesman for the Justice Department, confirmed Tuesday that the agency is investigating possible anti-competitive practices in the ticket distribution industry.

Calls to Ticketmaster executives and the company’s attorneys were not returned Tuesday. In a May 29 letter to The Times, Ticketmaster vice president Ned S. Goldstein said his company “operates fully and squarely within the parameters of all applicable laws.”


The Seattle band’s action has raised the heat under the longtime simmering debate over ticket prices, and talk among artists, managers, promoters and venue operators has taken on a new edge.

“What Pearl Jam is doing is precedent setting,” said Pam Lewis, who manages country star Garth Brooks, also a proponent of low-cost concerts. “Garth and I support the band, and we’ll help in any way we can. We think greed is ruining the business and encourage others in the industry to rally to Pearl Jam’s defense. It’s time for artists to start standing up for their fans.”

Several other managers who represent some of the nation’s biggest concert acts also privately applauded Pearl Jam’s efforts, but--reflecting the sensitivity of the issue--refused to speak publicly, saying they feared such action could jeopardize their clients’ careers.

Promoters and concert arena operators are lining up on Ticketmaster’s side.

“I admire any young band who tries to reduce ticket prices, but the service fee just can’t be brought down to the price Pearl Jam is asking,” said Claire L. Rothman, general manager of the Forum. “It’s an unrealistic demand.”

Gary Bongiovanni, editor of the national concert trade journal Pollstar, concurred.

“Venue owners and promoters aren’t going to just turn their backs on the revenue stream that Ticketmaster provides simply because Pearl Jam wants them to,” said Bongiovanni, reflecting a view expressed privately by several promoters. “And, besides, these surcharges stem from legal contracts.”

Indeed it is those contracts that are at the core of Pearl Jam’s complaint. The band’s memo, filed by a prominent New York law firm, asserts that Ticketmaster has exclusive arrangements with all important concert venues in the country and uses those relationships to “cement control over the distribution of tickets.”

Ticketmaster pays a portion of the service fees it collects to maintain exclusive long-term contracts with the owners of the largest concert venues. In addition, some promoters and artist managers also receive part of the surcharge.

Sources said the Justice Department is looking into allegations that Ticketmaster persuaded promoters to boycott Pearl Jam’s plans to perform this summer at venues that charged $18 per ticket and no more than $1.80 per service fee. Ticketmaster typically collects $5 to $8 per ticket in phone-service fees for rock and pop concerts.


Promoters and building owners, who support Ticketmaster, blame escalating prices on increased artist fees. They credit Ticketmaster with devising new revenue streams to bolster shrinking profits for venues and concert-promotion firms, and for creating an efficient method of “instantaneous” ticket distribution via telephone and store outlets.

“Before Ticketmaster came onto the market, every promoter in the industry was unhappy,” said Avalon Attractions president Brian Murphy, whose Los Angeles-based company puts on more than 300 Ticketmaster-affiliated concerts each year.

“Ticketmaster completely rewrote the rules and improved everything. They revolutionized the way tickets are distributed. I think the problem is that when anyone gets as big as Ticketmaster is, they just become a target for critics.”

Pearl Jam manager Kelly Curtis disagrees.

“Pearl Jam doesn’t have any battle with any other concert act who wants to charge higher prices,” Curtis said, commenting for the first time on the band’s position. “We’re just trying to look out for our fans. The fact is that a large percentage of the people who love Pearl Jam just don’t have very much money, and we want them to be able to attend our concerts. It’s all just as simple as that.”

California Assemblyman Rusty Areias (D-Los Banos), who introduced state legislation in 1990 to cap ticket service fees, believes Pearl Jam has a legitimate complaint and supports the Justice Department probe.

“The difficulty Pearl Jam is experiencing in bringing down fees is not the unique problem of just this rock band,” said Areias, who maintains that his proposal was crushed by lobbyists for the ticket distribution industry. “We experienced an identical battle against the same powerful forces on the floor of the State Assembly in recent years.”


The federal investigation is the latest in a series of legal problems for Ticketmaster.

Last month, consumers in six states filed class-action antitrust lawsuits against the corporation--just days after Ticketmaster resolved a similar claim in California by agreeing to give away $1.5 million worth of tickets to charity groups and paying $750,000 in legal fees.

The settlement, in which Ticketmaster denied any wrongdoing, put to rest a 1992 lawsuit alleging that the ticket agency and its Northern California-based affiliate, BASS, conspired with promoters and venue operators to bilk consumers by arbitrarily fixing the price of ticket “convenience” fees.

Ticketmaster has dominated the U.S. concert ticket distribution market since 1991 when the Justice Department gave the go-ahead for the company to buy certain assets from Ticketron, its only major competitor.

“I think everyone in the business would prefer an atmosphere of competition,” said U2 manager Paul McGuinness in a phone interview from Ireland. “But it was the Justice Department that did away with that when they allowed Ticketron to be acquired a few years ago.”