Moneybeat: Biden administration sues Ticketmaster

MARY REICHARD, HOST: Coming up next on The WORLD and Everything in It, the Monday Moneybeat.

NICK EICHER, HOST: It’s time to talk business, markets, and the economy with financial analyst and adviser David Bahnsen. He’s head of the wealth management firm The Bahnsen Group and he’s here now.

David, good morning!

DAVID BAHNSEN: Good morning. Good to be with you.

EICHER: Another antitrust case, David. The Biden administration is suing Ticketmaster, claiming it’s running a monopoly over live events and illegally driving up prices. Federal prosecutors and 30 DAs and state attorneys general filed suit in federal court in New York last week. The lawsuit seeks to break up Ticketmaster on the grounds that it’s squeezing out smaller promoters. The parent company Live Nation denies it’s acting unlawfully.

What do you say, David? I know we addressed some of this fairly recently, but anything different with this one? What do you think of the Ticketmaster suit?

BAHNSEN: Yeah, I think it's going to fail. I think it is wrong legally, wrong economically, and outside the appropriate jurisdiction of the federal government. But I think antitrust should be reserved for areas in which I believe consumers are being legitimately harmed, and where there are artificial barriers to entry that have been enacted. And my reading of this case is that that is not the situation here. And I believe this is more politically driven around the Biden administration's agenda of looking for populist battles to fight that where it appears, you know, similar to the credit card fees we talked about a couple of weeks ago. There's a little, you know, catnip here, for some voters like oh, look, they're trying to lower fees on credit cards or lower fees on concert tickets, and things like that, and who wouldn't want their fees lowered? Well, the answer is those of us who believe the federal government doesn't need to be in the business of concert tickets.

So I think perhaps they should get their annual deficit below $2 trillion, and then worry about concert tickets. So the damage economically here, if this were to prevail, which again, I do not believe it will, is that you are looking to the government to try to do the work that companies should be doing. Go beat Ticketmaster in competition. And there are plenty of other companies engaged in ticketing for events, creating advantages with promoters, the details of this would not be appalling to anyone who understood it. And again, one could say I tried to get tickets for a Taylor Swift concert and it was hard to do what it was expensive to do, I'm sure. But just think about the logic of saying whenever I have a frustrating experience as a customer, imagine the impulse, what it would do to the economy if our impulse was always you know what, I can't afford to eat at Le Bernardin, or I can't get a dinner reservation at Polo Bar, I'd like to ask Joe Biden to help. I mean, it's an absurd response. But that's really what's going on here. And the FTC, the Federal Trade Commission, is playing into this. They're telling people that when they're frustrated, the federal government should come and and regulate companies in a way that would be more helpful. And that creates huge costs throughout the economy.

EICHER: All right, David. Last week, on the program, we had an interview. I thought you'd be pretty interested in, talking, with Jeremy Tedesco of Alliance Defending Freedom. He was talking about the third annual Viewpoint Diversity Index. It's a report card on public companies seeking to bring to light abuses of our fundamental freedoms and your name came up. Tedesco talking about your shareholder resolution from last year with JPMorgan Chase, with the idea to try to push the company to stop so-called debanking of clients with conservative religious or political views. And I just want to get your thought on this year's index, David, and ask whether you think it represents some progress in corporate America?

BAHNSEN: Oh, it's huge progress. This is one of the biggest victories that I have seen in the philosophy of engagement over boycott. I do not believe for a second that JP Morgan, at a corporate level, was censoring Christians or conservatives. I think there were branches and managers and various, you know, extensions of the company that were doing this, and they got caught. And they, my resolution last year resulted in some huge changes. And I'm not taking all the credit personally. My consultants and lawyers and the work with Jeremy and the team at ADF. There were a lot of people involved besides me. But this was just an incredible victory to see them take down their restrictions on who could have a WePay account, to see Jamie Dimon, the CEO of JPMorgan stand up and say we absolutely refuse to censor people for their faith or their politics, acknowledging the merits of the resolution.

We're engaged right now with about a dozen different companies, and this is the only one where we collectively decided to withdraw my resolution this year, because of the positive movement that we've had with JP Morgan. They moved up to a score of a B, which again, it's not an A, but they were at an F, but they got to be in their scoring with the committee to unleash prosperity on political neutrality. And this is all a result of engagement conversation. I don't think it's all perfect. I don't think it's all done. But the amount of progress we've seen in a year with the nation's largest bank is to me very encouraging, and ought to be a model for others to not throw in the towel. You can't win fights that you don't show up for.

EICHER: My sense, David, is that we ought to do a defining terms around this idea of corporate engagement or shareholder activism, I think you really have to know your way around how publicly traded companies operate to comprehend what actually happens to bring about the changes that you're talking about here. So let me throw it open to you to pick a term to define that would be the most helpful to the most people in understanding this.

BAHNSEN: Well, I would say that activism is a word that comes up a lot and that it's often defined as either a left wing activist saying I want to go work against Exxon doing, you know, business in oil and gas. Or it can be right wing activist that says I want to go get a company to stop doing something that I don't like that they're doing. And so you know, that's where the word engagement comes from, is it's a way to channel your efforts to engage with the company, and engagement could become hostile, it could be argumentative, you know, they're we're fighting with them to do something they're not doing or, or, or stop doing something they are doing.

I'll give you an example. There's a company called Gilead Sciences, which is a very large biotech company. They're in the business of saving human life. They have incredible HIV, the most successful HIV treatments on the market, and have become a much bigger player in oncology. So most of us would be in favor of curing cancer wherever possible. But then they decided to get all cute and woke and announce that they're going to pay for employees' reproductive rights when they want to cross state lines after Dobbs to go have an abortion. So so a lot of companies in Fortune 500 America did that. So we reached out and said, Wow, it's really interesting that you're so motivated to help people's you know, reproductive rights or choice around children. Do you have a program to help support parents with adoption that are looking to adopt? And they ignore us, and they argue, and they go back and forth, and then finally they come back and go, yes, we've added that. Here's the language and they start providing adoption benefits.

And so I think that that's an example of engaging. It wasn't a friendly engagement initially, but it resulted in a modest concession from the company. So I don't think I'm giving you a definition here. I think I'm more giving you an example. But I view activism as someone who is approaching stock market ownership with a social political agenda. I view engagement as those who are legitimate investors that have an investment agenda, participating in their rights and activities to help drive a better outcome. That would be the distinction I'd make between engagement and activism.

EICHER: So I’m anticipating the listener who says, alright, so what’s my role here? I’ve got relatively few investments, you know, a 401(K), how can I have a voice or make a difference?

BAHNSEN: No, there really isn't. And that's okay. Because not everyone has to fight every battle. I mean, someone who, who just has a teeny tiny ownership of of a particular company that may not be the battle they need to fight. There's all sorts of other things within the church, within their community, within society that they can be focused on. But someone who isn't in a position to do something on that it would be an issue sample to me, a division of labor. You know, having a very tiny ownership through a mutual fund or ETF. It is not necessarily something and you also have to look at the risk–reward. It isn't necessarily something where they can move the needle, but it is something where they can spend a lot of time, a lot of effort, and get in the best case scenario, no real result out of it. So I encourage those of us who are believers to be wise to exercise leverage where we have it, but not not punch the air. You know, we're trying to we're trying to win the fight here.

EICHER: Ok, David Bahnsen is founder, managing partner, and chief investment officer of The Bahnsen Group.

Check out David’s latest book Full Time: Work and the Meaning of Life at fulltimebook.com.

Have a great week, David!

BAHNSEN: Thanks so much, Nick. Enjoyed being with you.

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