NerdWallet's Smart Money Podcast - Money News: Ticketmaster Trouble, Alaska Airlines Merger, GDP Updates and More

Episode Date: December 6, 2023

Learn how the Department of Justice is tackling the ticketing industry — and what it could mean for buyers and sellers. Before focusing on Congress’ latest ticketing industry crackdown, hosts Sean Pyles and Anna Helhoski discuss the IRS' delayed online seller rule, a revision to Q3 GDP figures, a new survey on money and happiness, the merger between Alaska Airlines and Hawaiian Airlines, and self-serve airplane snacks. Get ready for an episode that dissects the struggle for fair ticket prices and the potential consequences of a ticketing market in need of change. Then, Sean and Anna explore the chaotic world of concert ticketing, focusing on an investigation by Congress and the Justice Department into Live Nation Entertainment. They unpack the sky-high prices and dive into class-action lawsuits that Swifties and other concertgoers have leveled in recent years before explaining what could happen next. In their conversation, the Nerds discuss: personal finance, news roundup, form 1099-K, ticketing industry investigation, Congress, the Justice Department, Ticketmaster, Live Nation Entertainment, high prices, lawsuits, IRS, digital payment processors, Q3 GDP, money and happiness survey, airline mergers, self-serve snacks, finance news, Congress investigation, event ticketing, fees, Biden Administration, and transparency of fees for event ticketing. If you’re looking for an app to track all your money in one place, then check out the free NerdWallet app: https://nerdwallet.com/app  To send the Nerds your money questions, call or text the Nerd hotline at 901-730-6373 or email [e-mail]. Like what you hear? Please leave us a review and tell a friend.

Welcome to NerdWallet's Smart Money Podcast. I'm Sean Piles. And I'm Anna Helhosky. And this is our weekly personal finance news roundup, where we take a look at recent developments in the world of money, and then go in-depth on an issue that's important to your life and your bottom line. Today we're talking tickets, specifically concert tickets. If you're a Swifty who spent hours online or on the phone about a year ago trying to get access to the Heiress Tour, you know that things didn't go

smoothly. And that's an understatement. Both Congress and the Justice Department are investigating the ticketing industry, and we're going to look at what that might mean for your wallet. But first, a few money headlines from the last few days. So Sean, the IRS has changed its mind. I don't have to pay taxes this year. Not quite. But if you conducted any transactions over digital payment processors like PayPal or Venmo, you won't be getting the new tax bill that everyone who uses those services was expecting. Yeah, this is the form 1099-K, which was going to go to anyone who received at least $600 from sales on eBay or the two you mentioned or any other online selling platforms. Originally, those companies had to notify the IRS of anyone with more than $20,000 in

revenue or 200 transactions. A law passed in 2021, the American Rescue Plan Act, which was mostly targeted at COVID-related financial challenges, changed the rules to this new, way lower threshold of $600. It's been on ice since then because of rampant confusion about how it's going to work. A lot of people use these platforms to, for example, resell things or to pay people back when splitting a bill from a dinner out. Those kinds of payments could get wrapped up in this documentation, even though they're not subject to taxation. The platforms have protested mightily, as have citizens who use everything from StubHub to Airbnb. So the IRS is delaying yet again and says it will ease into things with a $5,000 threshold for the 2024 tax year, which will be due in 2025.

So a couple of cautions here. First, this does not mean that if you have revenue from this kind of online selling, you don't have to report it. You do absolutely still owe that tax just like any other year. It's just that the IRS won't get paperwork about it if it's below $20,000. And second, start preparing for this to happen next year. It would be a good idea to at the very least keep track of all of your transactions through online payment processors like Venmo and PayPal, even the ones where, like Ana mentioned, you're getting paid back for a dinner out with friends. Documentation, documentation, documentation.

And beyond that, prepare to get that 1099K in early 2025, especially if you are a gig worker. And talk to an accountant or a tax attorney if you think things might get complicated. The government released a new look at how the U.S. economy did in the third quarter of this year, and it's pretty good news. Yeah, it revised third quarter gross domestic product, GDP, up to 5.2% from its initial estimate of 4.9%. This is an annualized figure, so it means that GDP was up 5.2% from the third quarter of last year. And that's a significant jump. The annual rate of growth for both Q1 and Q2 was 2.1%. Is this part of the spending spree Americans

have been on this year? It is. Consumer spending was a large part of the increase. Companies also spent more on inventory and government spending went up as well. Sean, have you ever thought about how much money it would take to make you truly, deeply happy? You know, I have. I actually did a series about the relationship between money and happiness on Smart Money earlier this year, and the answer seems to be, unsurprisingly, more money equals more happy. Well, it seems most people would agree with you. There's a new survey out from the financial services company Empower that found six in 10 Americans say that money can indeed buy happiness. But the key question is how much money? Well, according to the just over 2000 respondents

to the survey, $1.2 million. That's the magic number. That's a pretty good number, though a lot of online calculators will tell you it's not enough for, say, retirement. True. So the annual salary that people said would make them happy is $284,000. For men, it was higher, $381,000, and women, $183,000. But that's chump change for millennials who said their happiness target was 526,000 a year. Goals. Yes, Sean, goals. But it's not all about happiness. A lot of it is about relief from money stress. 71% said having enough money would solve most of their problems. And they associate happiness with things like being able to pay bills on time and being debt-free.

Any surprises in the survey? Yeah, here's a twist that I suppose isn't a true surprise given what we know about younger generations, but a caution to their children. 67% of respondents said it's more important to take care of their lives today than to pass along any sort of inheritance. Oof, another reason to start saving early. So this probably isn't quite as relevant to you, Anna, being on the East Coast, although I'm sure you would enjoy an island vacation. But people who fly Alaska Airlines

and Hawaiian Airlines got some news this week. Alaska is buying Hawaiian for $1.9 billion. Isn't that about what it costs to vacation in Hawaii? Yeah, pretty close. The two carriers will keep their separate names, just like many couples do when they join together. But Hawaiian has apparently been having some trouble, in part because of the big wildfire on Maui, as well as competition from Southwest Airlines. It's also feeling the effects of post-pandemic Asia-Pacific travel. But government regulators still have to okay the marriage, and it could be a tough sell. The Justice Department has opposed several moves to consolidate the industry, including suing to stop JetBlue from acquiring Spirit Airlines. It also won a legal case against

a regional partnership in the Northeast between JetBlue and American. And Sean, while we're on the topic of airlines, would you like a snack, maybe some chips or a sandwich? Yes, please. I'm hungry. But I'm not sure an airline packet of pretzels is going to do it for me. Those things are small as a saltine. Well, a few airlines are coming to your in-flight hangry rescue. United has joined the short list of airlines offering self-serve snacks on select routes. JetBlue has had this option for almost 10 years. They used to call it the pantry. United says customers will have to wait for the first pass of flight attendants down the aisle before getting access to its pantry. And there will be a limited supply of water and snacks. That sounds like a recipe for both happy passengers who get to the snacks in time and not happy passengers who brave the walk down the aisle only to find they're too late and will have to do without a tiny granola bar. And Anna, what do these snacks cost?

They're free. Ooh, I can see the title of the movie now. The Stampede Four, Snacks on a Plane. Well, that's what we saw and heard about over the past week in Money News. Let us know what we missed and send us the headlines you've seen and want to hear more about. And now we have your ticket to understanding concert ticket money mayhem. Ana, have you ever physically camped out for concert tickets before? Nope. Do people even do that anymore? I doubt it, right? Like why camp when you can point and click?

Right. Usually I just camp out virtually with my laptop, iPad, and phone simultaneously poised, waiting to click buy the second they go on sale. Same. And then sometimes you get it. Other times it sells out in 30 seconds and you're left to navigate the wild west of third-party sales sites where prices are jacked up so high, you're wondering if it would be a bad idea to dip into your 401k. I too know that feeling, Sean. Now, I know neither of us are Swifties, but you might remember last year when Ticketmaster dropped the ball on selling tickets to Taylor Swift's long-elated Heiress Tour. Yeah, after that debacle, I didn't even try to get Beyonce tickets. In case listeners don't remember, in November 2022, tickets for the Heiress Tour

went on a confusing multi-tiered pre-sale. Fans were left on long wait lines and crashing screens while Ticketmaster prematurely outsold its inventory. That means the public sale was effectively canceled, leading fans to resellers where tickets went for tens of thousands of dollars. To say Swifties were let down is an understatement. Angry fans of the pop star filed a class action lawsuit against Live Nation Entertainment, accusing Ticketmaster of offenses ranging from fraud to misrepresentation and antitrust violations. Live Nation Entertainment has long been accused of operating as a monopoly, which is illegal. And yet, if you've purchased tickets for

any events for the last decade or so, you've probably had to go through Live Nation Entertainment at some point. Since a merger in 2010, the company has owned both Live Nation, an event promoter and venue operator, and Ticketmaster, a ticketing company. Combined, it holds an estimated 60 to 70% of the event ticketing market, as well as 80 of 100 of the largest venues in the U.S. Basically, since Live Nation is the largest event promoter in the country, it can force venues to sign deals with Ticketmaster. That blocks competitors from entering the market, which means Ticketmaster has gone essentially unchecked in charging large fees. The lack of competition is what keeps prices high.

And the heiress tour wasn't the first high-profile ticketing disaster, not by a long shot. Back in 2019, the Department of Justice alleged Live Nation Entertainment violated its antitrust decree. The company settled with the government, but the headaches in the market didn't end. Fans complain about Ticketmaster sales prices, fees, and in particular, its high resale prices. In August 2022, Bruce Springsteen tickets went as high as $5,000 on the resale market. That's due to Ticketmaster's quote, dynamic pricing policy, in which it prices tickets in real time, depending on demand. Yeah, my partner was trying to buy tickets for a sold out Conor Ober show a couple of weeks ago.

And within 10 minutes, the prices had risen and fallen multiple times. It made it essentially impossible for him to compare prices. Needless to say, Congress has taken notice. Following a Senate Judiciary Committee hearing in January, a subcommittee overseeing competition policy urged the Department of Justice's Antitrust Division to investigate,

and that investigation is underway. That brings us to last week, when that same subcommittee subpoenaed Live Nation Entertainment for documentation the company has failed to produce during its own investigation. Subcommittee Chair Senator Richard Blumenthal, a Democrat from Connecticut, said in a post on the platform formerly known as Twitter that the reason for the subpoena was an egregious stonewalling of the subcommittee's inquiry into its abusive consumer practices. Live Nation Entertainment responded with a statement saying it has produced documents in every question raised by the subcommittee, but has not produced information related to

sensitive client information about artists, venues, and others. Information about tour revenue isn't usually made public. The company says it asked the subcommittee to provide confidentiality protections, which the latter denied. So here's what happens next. Live Nation has to provide documentation regardless of its desire for confidentiality protections. The subcommittee wrote in a letter to the Department of Justice that if the investigation shows Live Nation abused its position as a dominant player in the market, then the DOJ should break up Ticketmaster Live Nation. As the letter says, it might be the only way to, quote, restore competition in the ticketing market.

As we talked about in an earlier Money News episode, the Biden administration has cracked down on transparency of fees for event ticketing, but high fee costs still remain. If the merger is broken up, it could loosen the grip the company holds on the events market, at least somewhat. Live Nation and Ticketmaster would still likely be the biggest players in the game for both event promotion and ticket sales. But after years of being under both thumbs, venues and artists could opt to do business with competitors instead. We'll be keeping an eye on the story as it unfolds in the coming months. That's it for this week's Money News. We always welcome your money questions and comments.

Turn to the nerds and call or text us with your questions at 901-730-6373. That's 901-730-NERD or send a voice memo to podcast at nerdwallet.com. And remember to follow, rate, and review us wherever you're getting this podcast. Today's episode was produced by Tess Biglin and edited by Rick Vanderkneife. Kevin Tidmarsh mixed our audio. And here's our brief disclaimer. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances. And with that said, until next time, turn to the nerds.