Lucas McCarthy respects the hustle it took to turn Live Nation and Ticketmaster into globally dominant, household names. Still, the Showpass CEO can’t help but crack a smile at the outcome of the live entertainment behemoth’s antitrust suit earlier this month.
On April 15, the US Department of Justice (DOJ) delivered a landmark verdict in an antitrust case that was brought against Live Nation Entertainment, the parent company of Ticketmaster, after the company’s 2010 merger with Live Nation. The courts found that Live Nation and Ticketmaster, which manage more than 400 musical artists, own more than 265 concert venues in North America, and control roughly 80 percent of major venue ticketing, were operating as an illegal monopoly over large entertainment venues, stifling competition and overcharging fans.
Lucas McCarthy,
“Do I respect the hell out of what Live Nation and Ticketmaster have built? … You can’t knock that kind of ambition and competitive prowess. But in the same breath, I’m also the one who’s had creative challenges as a result.”
Showpass
McCarthy founded Canada’s largest competitor to Ticketmaster, the Calgary-based Showpass, in 2014. Today, Showpass hovers at around 100 employees and has found success despite competing with its much larger, US-based rival. The company has made its bones on mid-sized events and volume sales, selling around 20 million tickets in Canada and processing “several hundreds of millions” in transactional volume each year, according to spokesperson Katelyn Marchyshyn. At that number, the company is profitable, having not raised equity since 2019, according to Marchyshyn.
Despite its financial and market success, McCarthy admits he would be lying if he said Live Nation Entertainment’s dominance—particularly around exclusivity agreements—hasn’t had an impact on his business and others like it.
“Do I respect the hell out of what Live Nation and Ticketmaster have built? … You can’t knock that kind of ambition and competitive prowess,” McCarthy told BetaKit. “But in the same breath, I’m also the one who’s had creative challenges as a result. Do I reap the benefits of this and get a little excited about the opportunities that may exist for consumers and for us? Yeah.”
The consequences for Live Nation Entertainment of the court decision could take months to play out, but potential outcomes include a slew of financial penalties, structural changes to how the company operates, and, of course, the nuclear option: divestiture of Ticketmaster from Live Nation.
Live Nation Entertainment has stated it intends to appeal the decision.
For McCarthy and Showpass, the prospect of structural changes like the end of Live Nation’s contentious exclusivity agreements—contracts that required venues to sign long-term agreements with Live Nation on things like ticket sales, concert promotion, and venue selection—is among the most exciting potential outcomes of the verdict.
“We can’t go into some arenas,” McCarthy said. “That’s one of the bigger challenges for us, and that’s made us who we are … But the ability to have the opportunity to extend our presence into the upper market? That gets me incredibly excited.”
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Beyond those ambitions, McCarthy sees some big potential upsides for live entertainment consumers, the first being the ramifications on the secondary ticketing market.
“The primary outcome that Canadians and Americans can jointly celebrate is some type of oversight and restriction in the secondary market,” McCarthy said. “That is probably the most unfair side of this industry … If that came out of this equation, I think everyone would benefit.”
A separate lawsuit filed by the Federal Trade Commission (FTC) is currently making its way through the US judicial system. That filing alleges that under current operating tactics, Live Nation deceptively allows “brokers” (sometimes called scalpers) to “harvest” large amounts of tickets and resell them on Live Nation’s resale markets, driving up ticket prices.
Then there’s the other outcome McCarthy thinks could be seismic for the industry: divestiture. McCarthy believes the live entertainment space on both sides of the border has suffered from stagnant innovation in the face of Live Nation’s market preeminence. If the company were to be broken up, he sees a future where increased competition could spur a swath of changes in the space.
“What ends up happening is that capital becomes available because the ceiling is removed. The market becomes bigger, more attractive, and innovation starts to happen,” he said. “I think that’s the thing: when there are better, more innovative competitors, it keeps us sharp, and it keeps the industry moving in the right direction.”
BetaKit’s Prairies reporting is funded in part by YEGAF, a not-for-profit dedicated to amplifying business stories in Alberta.