Monday, June 24, 2024

Live Nation and Ticketmaster lawsuit from DOJ calls for merger breakup 

Ticketmaster and Live Nation, which manages two venues in Wilmington, are being sued by the Department of Justice, with the goal to break up an alleged monopoly. (Port City Daily/Tom Dorgan)

The concert ticket sales scene, both nationally and locally, could be on the verge of a major transformation.

READ MORE: Has Live Nation priced concert-goers out of big-ticket shows?

Industry titans Ticketmaster and its parent company, Live Nation, are being sued by the Department of Justice for allegedly maintaining monopolies. The lawsuit is asking the courts to break up the companies. 

On Thursday, May 23, the Department of Justice, and attorneys general from 30 states, including North Carolina, announced the federal antitrust lawsuit at the DOJ’s headquarters in Washington, D.C. 

“We are not here today because Ticketmaster’s conduct is inconvenient or frustrating,” Attorney General Merrick Garland said during the announcement. “We are here because, as we allege, that conduct is anticompetitive and illegal.”

Major players nationally, Live Nation oversees more than 60% of large amphitheaters in the United States, according to the DOJ. This includes Wilminton’s Live Oak Bank Pavilion and the Greenfield Lake Amphitheatre. In Live Nation’s yearly report, released in April, the company stated that Ticketmaster handled over 620 million tickets in 2023. 

The lawsuit claims Ticketmaster and Live Nation’s dominance over the live entertainment industry has negatively and illegally impacted the experience for music fans, artists, promoters, and venues nationwide. Thus, it has led to higher ticket prices, fewer concert opportunities for artists, disadvantages for smaller promoters, and limited venue options for ticketing services. 

The Department of Justice’s concern about Live Nation and Ticketmaster dates back to 2010; when the two companies merged, the DOJ tried to stop it. Christine Varney, who was Assistant Attorney General then, called the merger “dangerous for competition” because it involved both horizontal and vertical integration. This means they merged as competitors (horizontally) and because different parts of their businesses lined up along the supply chain (vertically), 

However, the DOJ agreed on the merger if conditions were set to protect competition. The conditions stated Ticketmaster had to license its ticketing software, sell the ticket company they owned, and agree to not participate in anticompetitive behavior. 

Fast forward to 2019, a DOJ investigation into the company found Live Nation was involved in behavior that consistently broke those conditions. Live Nation faced a $1-million penalty and the terms of the merger were updated to include explicit prohibitions against threatening to withhold concerts from a venue if they decided to use a different ticketer. 

The companies are accused of using long-term contracts to prevent venues and promoters from working with other ticket sellers, restricting venues from using multiple ticket vendors, and pressuring venues with potential financial losses if they don’t choose Ticketmaster. 

Five years later, the DOJ is now taking decisive action after the chaos of recent ticket-buying and concert blunders like the Taylor Swift ticket debacle. In November 2023, fans battled bots for tickets to the pop star’s Era’s Tour on Ticketmaster’s website until it crashed. Ticket prices soared to $1,088, plus fees, despite face values of $50 to $400 before resale.

Shortly after, the DOJ launched its investigation on Live Nation in January of this year after the Senate had a hearing to discuss Live Nations business practices. 

The lawsuit would dismantle Live Nation: separating them from Ticketmaster and ending its ticket agreement with Oak View Group, a venue management company. The DOJ’s hope is  will broaden the competition for ticket sales, by creating a more competitive market, in turn lowering ticket prices for concert goers.

“It is time to break it up,” Garland said Thursday. 

In the complaint, the DOJ mentions instances where Live Nation’s relationship with Oak View Group, is believed to have been misused. Oak View Group formed in 2015 and was seen as one of Live Nation’s biggest competitors. Now, according to the complaint, Oak View Group has refrained from competing with Live Nation for artist talent and has persuaded venues to sign exclusive contracts with Ticketmaster.

The complaint refers to their relationship as “potential competitor-turned-partner.”

The DOJ also cites allegations of Live Nation threatening and instilling fear in two venues and a promotion company. One example listed in the complaint occurred in 2021, when Live Nation allegedly threatened retaliation against Silver Lake, a private equity firm, unless its portfolio company stopped competing with Live Nation for artist promotion contracts. These threats worked, and Silver Lake attempted to sell the portfolio company.

The DOJ also claims Live Nation’s self-proclaimed “flywheel” business model is made to “feed its other high margin businesses” —  a “self-reinforcing” cycle. The company uses customer fees and sponsorship revenue to secure artists for long-term ticketing contracts with venues, which then generates more revenue, restarting the cycle. The DOJ claims that this model contributes to Live Nation’s anticompetitive behavior. 

Live Nation has disagreed with the DOJ’s claims.

“This is why the government has never been less popular — because they pretend they are fixing your problems when instead they are pandering to a narrow set of political interests,” Live Nation Executive Vice President Dan Wall wrote on the company’s website Thursday. . 

Live Nation’s statement adds concert promoters and ticket companies do not control high ticket prices and instead puts the onus on a litany of other factors.

“[The complaint] ignores everything that is actually responsible for higher ticket prices, from rising production costs, to artist popularity, to 24/7 online ticket scalping that reveals the public’s willingness to pay far more than primary ticket prices.” 

Ticketmaster and Live Nation allow reselling of tickets, however, their website states that they do not condone the use of bots and actively work to stop them: 

“The problem is not Ticketmaster’s level of effort, but the arms race with bad actors whose only incentive is to constantly develop new methods of using bots use to circumvent Ticketmaster security.” 

Event organizers, the artist, or venues determine the base ticket price; however, they share a portion of earnings with Live Nation. The division of profits varies per contract, but, usually, the artist receives 85%, while the promoter receives the remaining 15%.

The complaint lists multiple ways in which Live Nation and Ticketmaster violated state law. New York had the most. The complaint lists violations to five of the state’s laws including New York’s Donnelly Act, Clayton Act, and Sherman Act, put in place to prevent anti-competitive practices.

The complaint filed yesterday does not allege any violations to North Carolina state law. But that doesn’t many none are forthcoming.

“We intend to add allegations of violations of North Carolina state statutes when an amended complaint is filed in accordance with the court’s rules,” North Carolina’s Department of Justice Deputy Press Secretary Olivia Weidie told Port City Daily.

Weidie also stated there is a possibility the case will go to trial, although it is too soon for a date to be determined.


Reach journalist Jalyn Baldwin at jalyn@localdailymedia.com 

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Shea Carver
Shea Carver
Shea Carver is the editor in chief at Port City Daily. A UNCW alumna, Shea worked in the print media business in Wilmington for 22 years before joining the PCD team in October 2020. She specializes in arts coverage — music, film, literature, theatre — the dining scene, and can often be tapped on where to go, what to do and who to see in Wilmington. When she isn’t hanging with her pup, Shadow Wolf, tending the garden or spinning vinyl, she’s attending concerts and live theater.

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