Justice Department Files Antitrust Lawsuit Seeking To Break Up Live Nation-Ticketmaster; “Baseless” PR Stunt, Company Responds – Update
UPDATED, 7:58 AM PT: As expected, the Justice Department sued Live Nation-Ticketmaster today, claiming that the ticketing and concert events giant is stifling competition and driving up prices for consumers.
In response, the self-described “largest live entertainment company in the world” accused the feds of going for a PR hit over the facts of the live music industry.
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The lawsuit, filed in U.S. District Court in Manhattan, also alleges that Live Nation-Ticketmaster punished venues that used more than one ticketer, that it hindered performers’ access to venues and that it bought up competitors, among other things. In conjunction with dozens of state attorneys general, the suit seeks a break up of the long merged company.
READ THE DOJ’S ANTITRUST SUIT AGAINST LIVE NATION HERE
In a statement, Attorney General Merrick Garland said, “We allege that 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. The result is that fans pay more in fees, artists have fewer opportunities to play concerts, smaller promoters get squeezed out, and venues have fewer real choices for ticketing services. It is time to break up Live Nation-Ticketmaster.”
“When companies like Live Nation control every aspect of an event, it leads to bad blood – concertgoers and sports fans suffer and are forced to pay cruel prices,” New York Attorney General Letitia James said in a statement of her own.
No one said the name “Taylor Swift,” the ticketing crash that kicked off the superstar’s Eras tour last year and left millions of Swifties screaming at their screens set off a new round of scrutiny among lawmakers on Capitol Hill. The Justice Department was said to already be investigating the company at the time, as Live Nation-Ticketmaster has been operating under a consent decree stemming from its merger in 2010.
In the lawsuit, the Justice Department attorneys wrote, “Live Nation and its wholly owned
subsidiary, Ticketmaster, have used that power and influence to insert themselves at the center
and the edges of virtually every aspect of the live music ecosystem. This has given Live Nation
and Ticketmaster the opportunity to freeze innovation and bend the industry to their own benefit.
While this may be a boon to Live Nation’s bottom line, there is a real cost to Americans.”
The DOJ claimed that Live Nation-Ticketmaster had created “a self-reinforcing ‘flywheel'” that
is used “to connect their multiple interconnected businesses and interests.”
Among other things, the Justice Department attorneys cited instances of threatened retaliation against a firm unless it stopped a subsidiary from trying to gain “a foothold in the U.S. concert promotions market.”
“Live Nation-Ticketmaster’s power in concert promotions means that every live concert venue knows choosing another promoter or ticketer comes with a risk of drawing an adverse reaction from Live Nation-Ticketmaster that would result in losing concerts, revenue, and fans,” the lawsuit stated.
The government also alleged that the company restricted artists’ access to venues unless they also agreed to use their promotion services. Also cited in the complaint was Oak View Group, a potential competitor which the DOJ attorneys wrote has “avoided bidding against Live Nation for artist talent and influenced venues to sign exclusive agreements with Ticketmaster.”
Claiming that the DOJ’s actions won’t help reduce high ticket prices and that there is no monopoly, Live Nation, which melded with Ticketmaster in 2010, has painted the long expected suit as “baseless.”
“The DOJ’s lawsuit won’t solve the issues fans care about relating to ticket prices, service fees, and access to in-demand shows,” a spokesperson for the company told Deadline this morning.
“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,” Live Nation added. “Our 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. 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.”
The lawsuit does reference the longtime frustration with Ticketmaster fees, calling it a “Ticketmaster tax,” and noting that “any fan who has logged onto Ticketmaster’s website to buy a concert ticket knows the feeling of shock and frustration as the base cost of the ticket increases dramatically with the addition of fees,” including such thing as service and handling fees.
PREVIOUSLY, 5:30 AM PT: The Justice Department is expected to file a lawsuit against Live Nation-Ticketmaster today, claiming that the live events and ticketing company has illegally stifled competition.
Multiple media outlets reported on Wednesday evening that the DOJ, along with several states, will see remedies including that the company should be split up.
The lawsuit — rumored for weeks — would be the latest action taken by the Biden administration to rein in corporate power. The DOJ sued Apple in March, claming that the company had a monopoly over the smartphone market.
Live Nation and Ticketmaster have long been in the crosshairs of the DOJ.
Live Nation is under a consent decree from its 2010 merger with Ticketmaster, put in place as part of a settlement agreement with the Justice Department.
The consent decree was extended in 2019 for an additional 5 1/2 years after the DOJ concluded that Live Nation violated restrictions placed on its merger, which combined ticket, promotion, concert and management businesses. Among other things, the conditions prohibit Live Nation threatening to withhold concerts from a venue if it chooses another ticketing firm to handle sales.
Last year, the company faced hours of criticism and brutal attacks from lawmakers at a Senate hearing on practices in the ticketing industry. That followed an incident in which Ticketmaster’s website crashed amid an overload of demand for Taylor Swift concert tickets. Joe Berchtold, president and CFO, faced a grilling by lawmakers of both parties at the hearing. But Berchtold said that the artist sets the price of the ticket and, in most cases, the venue controls the fee.
Sen. Amy Klobuchar (D-MN), who chairs a Senate Judiciary subcommittee on antitrust issues, said in a statement, “If the reports are correct, the Justice Department is doing the right thing by bringing this suit against Live Nation. This is about ensuring fair treatment for fans everywhere and reinvigorating competition in ticketing markets.”
Dan Wall, executive vice president for corporate and regulatory affairs at the company, wrote in March that the “real explanations for high ticket prices are well-understood and have very little to do with Live Nation or Ticketmaster. They begin with the economic conditions that explain most pricing: supply and demand.” His essay addressed ongoing attacks on the company on Capitol Hill, suggesting that lawmakers advanced the idea that “alleged ‘monopolies’ are responsible for high ticket prices.”
“Rhetorically, that’s understandable, because if you want to rile up fans against Live Nation and Ticketmaster, there is no better way than to blame them for something you know fans dislike,” he wrote.
Bloomberg News first reported on the plans for the lawsuit.
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