The debate over concert prices resumes today on Capitol Hill as a House subcommittee convenes to explore regulation of the ticket distribution industry, and as federal investigators expand their inquiry of the $1-billion concert business.
Today's session, called by Rep. John D. Dingell (D-Mich.), is intended to discuss a proposed bill that would require ticket distributors to disclose their service fees, but the session is also expected to explore whether Ticketmaster, the industry's largest ticket agency, was upfront about its practices at an earlier hearing.
Los Angeles-based Ticketmaster is included in a Justice Department inquiry into anti-competitive practices. The investigation was prompted by a civil antitrust complaint filed in May by Seattle rock band Pearl Jam, which accuses Ticketmaster of exercising a national monopoly over ticket distribution and using its influence with promoters to derail the group's plans for a low-priced tour this summer. Ticketmaster denies the allegations.
Dingell, the influential chairman of the Energy and Commerce Committee, has asked Ticketmaster to provide additional data about industry practices and the company's financial dealings in an effort to clarify information the firm provided at a June 30 House Government Operations Committee hearing. That hearing focused primarily on the controversial arrangements involving promoters, venues and Ticketmaster that underlie pricing decisions.
At the June hearing, Ticketmaster Chief Executive Frederic D. Rosen estimated that in 1993 his company sold less than 3% of the tickets to entertainment events nationwide and that it earns only about 10 cents profit per ticket. A recent internal Government Operations Committee memo obtained by The Times characterizes Rosen's explanation of Ticketmaster's transactions and profits as "misleading."
Two weeks ago, Dingell sent Rosen a list of questions to be addressed at today's hearing, at which Ticketmaster is expected to be represented by company Vice President Ned Goldstein. Goldstein said Wednesday that suggestions that Ticketmaster may have provided misleading information at the last hearing are "absolutely and unequivocally false."
"We presented the facts and provided documentation to substantiate those facts," Goldstein said. "If they have questions, they have not contacted us to ask any questions."
Rep. Gary A. Condit (D-Ceres), chairman of the subcommittee that called the first hearing, has since written to Anne K. Bingaman, the top prosecutor in the Justice Department's antitrust division, challenging Ticketmaster's arrangements with promoters and venues. Ticketmaster pays a portion of each service fee it collects to maintain exclusive long-term contracts with many of the nation's biggest promoters and concert halls.
Condit's Sept. 12 letter also demanded a public accounting of why the Justice Department approved the merger in 1991 of Ticketmaster and Ticketron--which in effect put Ticketmaster's primary competitor out of business and resulted in higher prices for consumers.
"That merger led to a monopoly," said Condit, who is a co-sponsor of Dingell's bill. "It's up to the antitrust division to do the right thing for consumers. We hope these hearings will help us get to the bottom of this."
Dingell's bill would address concerns about concert ticket sales raised recently by consumers. These would include complaints about tickets for this summer's Eagles concerts, for which service fees were not disclosed to ticket buyers. Those fees--which sources said exceeded $6 per ticket--were included in the face ticket price of each purchase but not explicitly disclosed.
If it passes, Dingell's bill would mark the first nationwide regulation of ticket distribution. It would put transactions conducted by ticket service companies and ticket brokers--those who buy and resell choice seats for profit--under the purview of the Federal Trade Commission. Ticketmaster, which supports the bill, maintains that it already discloses its fees.
Meanwhile, the Justice Department investigation, which began in May, is proceeding. A department spokesman declined comment but acknowledged that the inquiry is moving forward. Among the recent developments:
* Officials from the Justice Department--which in May ordered Ticketmaster to surrender records pertinent to the inquiry--have added investigators to the case and are continuing to conduct extensive interviews in several states with talent managers, promoters and venue operators, sources said. Industry figures contacted so far by the government include representatives for rock acts Sting, Meat Loaf, the Grateful Dead and R.E.M.
* Last month, investigators interviewed executives at several software firms who maintain that Ticketmaster's alleged lock on the concert business has prevented the implementation of cheaper, technologically superior systems in the ticket distribution market. One software firm was served with a "civil investigative demand"--the equivalent of a subpoena--requiring it to turn over documents that could help expand the scope of the investigation.
* Three weeks ago, the Justice Department spoke with executives at MovieFone, a New York-based firm that sells movie tickets, whose partner, Pacer-CATS, recently sold a majority interest to Ticketmaster. Sources said MovieFone is concerned that Ticketmaster is attempting to establish a presence in the film ticket market as dominant as its position in the concert market.