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Pearl Jam, Ticketmaster and Now Congress : America's biggest band sent shock waves through the music business when it filed a complaint with the Justice Department about Ticketmaster. Now, Congress is holding a hearing. How'd it all get so far?

June 30, 1994|CHUCK PHILIPS | SPECIAL TO THE TIMES

Rock 'n' roll returns to Capitol Hill today, but this time it's not over record labeling.

Instead, the House Government Operations subcommittee will convene to hear testimony about how the $1-billion concert industry operates in the United States.

The hearing follows a complaint filed by the best-selling band in the U.S., Pearl Jam, against Ticketmaster, the largest ticket company in the business.

The band alleges that the Los Angeles-based firm exercises a national monopoly over ticket distribution and used its influence with promoters to boycott Pearl Jam's planned low-priced tour this summer. The complaint, filed May 6, triggered a Justice Department civil investigation into possible anti-competitive practices in the ticket distribution industry.

For the Record
Los Angeles Times Friday July 8, 1994 Home Edition Calendar Part F Page 2 Column 4 Entertainment Desk 2 inches; 49 words Type of Material: Correction
Clarification-- A June 30 Calendar story reported that Ticketmaster adamantly opposes listing service charges on the face of each ticket. The firm's objection was specifically related to Pearl Jam's March 13 Chicago performance and does not represent Ticketmaster's standard policy, which is to print service fees separately on each ticket.

Pearl Jam's unprecedented action has turned up the heat on the longtime simmering debate over ticket prices, and the Seattle rock group has received words of support from some of the nation's biggest concert draws. Among them: Garth Brooks, Neil Young, R.E.M., the Grateful Dead and Aerosmith, whose manager is scheduled to testify today.

"This thing has been building up for a long time," says Stone Gossard, Pearl Jam guitarist and co-founder, who will speak first at today's hearing. "And deep down, it's really not about money. It's about music. It's about fairness. It's about a band who believes good intentions can translate into sound business practices and a giant corporation that's completely out of touch."

A Ticketmaster spokesman dismisses Pearl Jam's move as a "brilliant marketing ploy" to sell records and says that the firm "operates fully within the parameters of all applicable laws." Ticketmaster's practices were reviewed in 1991 when the U.S. Justice Department's antitrust division allowed the firm to buy certain assets from a competitor.

But Pearl Jam's move has sent shock waves through the country, all the way from the streets of Seattle to the White House.

President Bill Clinton--who invited Pearl Jam to the White House in April while the band was on the East Coast during its spring tour--is keeping tabs on the controversy.

"The White House is impressed by Pearl Jam's commitment to its fans," says George Stephanopoulos, senior adviser to the President for policy and strategy. "We want to make it very clear that we can't judge the merits of the band's allegations against Ticketmaster or prejudge the Justice Department action in any way. But that said, we think the goal of making concert ticket prices affordable is a laudable one. It's something we believe in."

And the entire record industry is watching from the sidelines, anxious for the outcome of what one insider has called a "holy war." The stakes are high and the fight will surely provide a rare look inside the lucrative concert industry.

But how did a rock band, a ticket firm and even the U.S. President become involved in a matter that has led to today's session on Capitol Hill? The following, based on interviews with dozens of key participants on both sides, is a step-by-step account of how the biggest-drawing band in America arrived at the door of the Justice Department.

It was Labor Day, 1992, when Pearl Jam celebrated its ascent to superstar status by throwing a free "thank you" concert for 30,000 hometown Seattle fans. It also was the band's first blowup with Ticketmaster.

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The quintet was angered when the ticket firm requested a $1 service fee for each free pass it distributed. The band went around the firm and gave away tickets on its own.

Shortly after the episode, Pearl Jam began making a conscious effort to reduce ticket and T-shirt prices for its 1993 tour--its first as a headliner.

Rather than take on Ticketmaster last year, however, Pearl Jam allowed its fans to be charged service fees ranging from $3 to $6 per ticket on its 40-date cross-country trek. Instead, the band instructed its representatives to focus on persuading venue owners to accept smaller commissions on Pearl Jam merchandise so that T-shirts could be sold for $18--about 25% less than most acts charge.

"We swore when we formed this band that if we ever got successful we would make sure we did something to keep our concert prices down," Gossard says. "But we decided to take it one step at a time."

Pearl Jam also lowered the face price of each ticket to $18--despite opposition from some promoters who encouraged the group to charge almost three times that amount. The band--which has sold nearly 11 million albums since 1992--turned down more than $2 million last year in potential tour and merchandise profits as a result of its low-price policies, promoters say.

While fans applauded Pearl Jam's efforts, the band's unorthodox tactics were perceived in the industry as a direct affront to the profit base of a powerful clique of promoters, venue owners and concessionaires affiliated with Ticketmaster.

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