In the early 1990s, the rock band Pearl Jam was engaged in a high-profile legal battle with Ticketmaster over the company’s service fees and exclusive contracts with venues. The dispute arose when Pearl Jam took issue with Ticketmaster’s fees, which could add $3 or more to the base ticket price. The band viewed this as unfair to fans and began to boycott Ticketmaster venues on their 1994 tour.
What led to Pearl Jam’s lawsuit against Ticketmaster?
Pearl Jam’s problems with Ticketmaster dated back to the band’s 1991 album Ten, which went on to sell over 10 million copies. As the band gained in popularity, Ticketmaster’s exclusive contracts with major venues allowed them to impose service fees well above face value. By 1994, Pearl Jam decided to only play non-Ticketmaster venues to make shows more affordable. However, Ticketmaster’s exclusive deals made it difficult to find suitable venues.
Things came to a head when the U.S. Department of Justice began an antitrust investigation into Ticketmaster in 1994. Pearl Jam’s complaint to the DOJ alleged that Ticketmaster was a monopoly that drove up prices and anti-competitive practices. Specific charges included tying arrangements, exclusive dealing, and price-fixing.
Pearl Jam’s main allegations against Ticketmaster
- Service fees as high as 25% above face value
- Abuse of monopoly power through exclusive contracts
- Leveraging control over venues to impose deals on artists
- Stifling competition in live event ticketing market
Unable to find alternative venues, Pearl Jam filed an antitrust lawsuit against Ticketmaster in 1994, seeking to break up its exclusive deals. Several other musical acts would later join the Pearl Jam lawsuit.
What happened in the Pearl Jam vs. Ticketmaster lawsuit?
Pearl Jam’s lawsuit alleged that Ticketmaster violated the Sherman Antitrust Act of 1890, which prohibits monopolistic business practices. However, the case struggled to gain traction in court. In 1995, a federal judge dismissed most of Pearl Jam’s lawsuit, ruling that Ticketmaster’s exclusive deals did not constitute a monopoly. While the band found some success on appeal, the legal process dragged on for years.
Key developments in the antitrust lawsuit
- 1994 – Pearl Jam files lawsuit in U.S. District Court
- 1995 – Judge dismisses most of Pearl Jam’s charges
- 1996 – Appeals court revives some claims
- 1998 – Judge grants Ticketmaster summary judgment
- 2000 – Final appeal denied by Supreme Court
A major sticking point was that Ticketmaster did not have exclusive control over the entire live event ticketing market. The company only had a dominant position in major rock concerts in large venues. Thus, their deals did not constitute a monopoly under the legal definition.
Did Pearl Jam ultimately win or lose their case?
After years of legal wrangling, Pearl Jam and Ticketmaster finally reached an out-of-court settlement in 2001. The terms of the settlement were not disclosed publicly. However, Pearl Jam was unable to gain any major concessions from Ticketmaster, which retained its business model and market position.
In the end, Pearl Jam lost their landmark antitrust lawsuit against Ticketmaster. Though they brought public attention to the issue, the courts ruled that Ticketmaster’s exclusive contracts were not an illegal monopoly under antitrust law:
Key reasons Pearl Jam lost
- Ticketmaster had not violated the Sherman Antitrust Act
- Their exclusive deals were ruled legal business practices
- Courts found no evidence of unlawful monopolistic behavior
- Ticketmaster did not control entire ticketing market
Pearl Jam’s long fight against Ticketmaster helped spur political action on ticket fees and industry practices. Some economists credit the lawsuit with exposing Ticketmaster’s hold on major venues and the large margins gained from fees. But from a legal perspective, Pearl Jam lost their antitrust case and were unable to bring about their desired changes via the courts.
What was the aftermath and impact of the lawsuit?
Despite their defeat in court, Pearl Jam brought national attention to complaints about Ticketmaster’s industry dominance. Their lawsuit presaged a wider backlash against high ticket fees that continues to impact the industry today. Some of the aftermath and lasting impacts include:
Increased political scrutiny
Pearl Jam’s lawsuit put ticket fees on regulators’ radar screens. The U.S. Justice Department, FTC, and state governments opened investigations into Ticketmaster and the ticketing market. Ticketmaster would pay fines in legal settlements over its fees in the 2000s.
Public perception of fees
The lawsuit focused public attention on Ticketmaster’s controversial fees. Consumers became more aware of the significant markups that fees added to ticket prices. This increased pressure on legislators to take action.
Boycotts and venue avoidance
Other major acts like Bruce Springsteen, R.E.M., and Neil Young joined Pearl Jam in boycotting Ticketmaster. Promoters found ways to book tours in non-Ticketmaster venues. Overall, the boycotts demonstrated that Ticketmaster was not fully indispensable.
Competitive responses
New players tried to take on Ticketmaster and its dominant position by offering lower fees. Upstarts included Tickets.com and Ticketmaster’s Achilles heel – automated phone and online ticketing that bypassed its fees.
Scrutiny of anti-competitive practices
Pearl Jam’s lawsuit alleged anti-competitive deals with venues that boxed out rivals. This highlighted issues over Ticketmaster’s exclusive contracts that attracted legal scrutiny and policy responses in their aftermath.
While Pearl Jam failed to get the courts to break up Ticketmaster’s exclusive arrangements, the lawsuit brought significant negative attention to the company’s business practices. It mobilized public opinion and spurred greater competition in ticketing. Two decades later, Ticketmaster still dominates major live event ticketing but faces greater constraints on the fees it charges.
Could a similar Pearl Jam lawsuit succeed today?
If another band or artist attempted to sue Ticketmaster today over monopoly power or illegal restraint of trade, they would still face challenging obstacles. Some factors that could influence a modern antitrust lawsuit against Ticketmaster:
Venue and promoter consolidation
Since the 1990s, there has been greater consolidation among venue chains and promoters like LiveNation. This makes it even harder for artists to route around Ticketmaster. Their exclusive deals now span more of the industry.
Market definition issues
Courts take a narrow view of Ticketmaster’s market power. Unless this changes, their dominance in areas like major rock concert ticketing would likely not qualify as an illegal monopoly.
Competitors and substitutes
There are now more rivals in primary ticketing, even though Ticketmaster retains the largest market share. The existence of competitors helps counter monopoly arguments. Fan-to-fan exchanges like Stubhub also substitute for primary sales.
Lower barriers to do-it-yourself ticketing
New technologies make DIY ticketing more viable for big artists. Top artists like Louis CK and Radiohead have cut out the middleman successfully using direct sales. This provides an alternative to Ticketmaster-controlled distribution.
While still dominant in mainstream ticketing, Ticketmaster now faces a more complex market with weaker anti-competitive defenses. However, any legal challenge would still face difficult burdens of proof around monopoly power and restraint of trade required under antitrust law. The aftermath of Pearl Jam’s lawsuit brought incremental rather than revolutionary change to the ticketing landscape.
Conclusion
Pearl Jam’s high-profile legal battle against Ticketmaster in the mid-1990s highlighted issues with the company’s dominance over major event ticketing. Though the band was unsuccessful in court, the lawsuit focused national attention on Ticketmaster’s business practices and brought greater scrutiny from regulators and the public. While Ticketmaster retains control over primary ticketing at many major venues today, Pearl Jam’s fight altered the landscape by eroding their ironclad grip on distribution channels. However, their core business model continues largely intact despite adaptations in the wake of the lawsuit. Ultimately, Pearl Jam achieved more success in the court of public opinion than the court of law. But their David vs. Goliath stand led the way for greater competition and consumer awareness around a company many saw as an unchecked monopoly.