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News May 24, 2024

Live Nation Hit With U.S. Antitrust Lawsuit

Live Nation Hit With U.S. Antitrust Lawsuit

Live Nation is in the crosshairs of a legal challenge in the United States which, ultimately, seeks to have the live entertainment giant and its Ticketmaster division dismantled.

An antitrust lawsuit filed by the Department of Justice and 30 state attorneys general accuses the live entertainment giant of achieving its dominant position in the world’s biggest market through abuses of market power and dubious exclusive ticketing contracts.

The DOJ alleges that Live Nation “controls” the live entertainment industry in the United States “because it is breaking the law,” says Attorney General Merrick Garland. “It is time to break it up.”

In the lawsuit, filed in Manhattan federal court, the DOJ argues that LN must spin-off Ticketmaster, ending an alliance formed in 2010 that was controversially approved by federal regulators despite concerns that the enlarged entity would wield too much power in the live entertainment industry. 

The antitrust lawsuit “strikes a critical blow on behalf of the American public against Live Nation’s suffocating monopoly over live music,” comments Sandeep Vaheesan, legal director at Open Markets Institute, a Washington, D.C.-based non-profit organisation dedicated to stopping monopolies, strengthening antitrust law and competition policy.

Through a “series of acquisitions and coercive tactics,” adds Vaheesan, “Live Nation has unfairly dominated the promotion, hosting, and ticketing of concerts for years to the great detriment of artists, fans, and independent businesses. Critically, rather than attempt to remedy this monopoly through surgical fixes, the government wisely seeks to terminate Live Nation’s control of the industry through a breakup of this behemoth.” 

Garland said the government will present evidence gleaned from emails between Live Nation CEO Michael Rapino and Oak View Group chief Tim Leiweke, plus communications between Rapino and the head of powerful equity firm Silver Lake capital.

“We allege that Live Nation has repeatedly wielded its powers to keep its rivals from expanding in the U.S. concert promotions market through threats and retaliation,” Garland said. 

The suit has an Australian angle.

According to Billboard, Garland alleges that, in 2021, LN threatened to retaliate against Silver Lake, a U.S.-based private equity company which specialises in technology investing, unless it divested from TEG, which it acquired in 2019 for upwards of $1 billion

Garland reportedly claims that Rapino told Silver Lake that he “failed to understand why [the equity firm] continued to invest in a business that competes with Live Nation.”

“The threats ultimately succeeded and Silver Lake has tried to sell TEG altogether,” Garland said. “We allege that Live Nation does not maintain its dominance in the live industry by staying ahead of its competition on the merits. It does so by unlawfully eliminating its competition. We allege that Live Nation controls the live entertainment industry in the United States because it is breaking the law.”

As previously reported, TEG Group’s owners were last year testing the waters for an auction which, if the money is right, would see the Australian business change hands for the second time in five years.

Humanitix, the humane ticketing platform, has welcomed the DOJ development. “We’re very excited by the news from the U.S. and hope that it can be replicated in Australia,” reads a statement from the ticketing specialist, which dedicates 100% of profits to charity. “Giving fans, artists and events a choice of who tickets their events is a huge step forward for the ticketing industry.

The 128-page complaint filed by the government claims Live Nation-Ticketmaster has “unlawfully maintained monopolies in several concert promotions and primary ticketing markets and engaged in other exclusionary conduct affecting live concert venues, including arenas and amphitheaters.”

The DoJ addresses the vertically integrated business, which it claims manages more than 400 artists, controls around 60% of shows at major concert venues, owns or controls more than 265 concert venues in North America, and “controls roughly 80% or more of major concert venues’ primary ticketing for concerts and a growing share of ticket resales in the secondary market”. 

Says Garland: “It is time to break up Live Nation-Ticketmaster. Live Nation relies on unlawful, anticompetitive conduct to exercise its monopolistic control over the live events industry in the United States at the cost of fans, artists, smaller promoters and venue operators”. 

Live Nation has repeatedly rejected those claims.

According to The Hollywood Reporter, LN president Joe Berchtold spoke this week at a conference organised by JP Morgan, at which he remarked, “I think it’s fair to say I continue to believe that we fundamentally have business practices that are fully defensible”. 

He also remarked, “we’re also open to figuring out common ground in order to get this settled and moved on. But we don’t know exactly what they want at this point still.” 

The DOJ’s lawsuit “won’t solve the issues fans care about relating to ticket prices, service fees, and access to in-demand shows,” reads a statement from LN. “Calling Ticketmaster a monopoly may be a PR win for the DOJ in the short term, but it will lose in court because it ignores the basic economics of live entertainment, such as the fact that the bulk of service fees go to venues, and that competition has steadily eroded Ticketmaster’s market share and profit margin.”

Posted under the headline “Setting The Record. Straight Facts About Live Nation Entertainment,” LN’s statement defends the business’s activities and model, and addresses various DOJ points.

Live Nation and Ticketmaster’s annual 1.4% annual net profits are the “opposite of monopoly power;” there is “more competition than ever in the live events market,” and the suit “distracts from real solutions that would decrease prices and protect fans – like letting artists cap resale prices,” the message continues. 

LN’s “growth comes from helping artists tour globally, creating lasting memories for millions of fans, and supporting local economies across the country by sustaining quality jobs,” the corporate statement adds. “We will defend against these baseless allegations, use this opportunity to shed light on the industry, and continue to push for reforms that truly protect consumers and artists.”


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