U.S. Department Of Justice Sues Live Nation

The U.S. Department Of Justice, along with 30 state and district attorneys general, took action against Live Nation Entertainment and its subsidiary Ticketmaster, alleging antitrust violations. Live Nation merged with leading ticketing company Ticketmaster in 2010.

“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,” said Attorney General Merrick B. Garland. “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.”

The DOJ detailed its antitrust action against Live Nation in a press release:

According to the complaint, 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 complaint further alleges that Live Nation-Ticketmaster’s exclusionary practices fortify and protect what it refers to as its “flywheel.” The flywheel is Live Nation-Ticketmaster’s self-reinforcing business model that captures fees and revenue from concert fans and sponsorship, uses that revenue to lock up artists to exclusive promotion deals, and then uses its powerful cache of live content to sign venues into long term exclusive ticketing deals, thereby starting the cycle all over again. Live Nation-Ticketmaster’s anticompetitive conduct creates even more barriers for rivals to compete on the merits. Specifically, Live Nation-Ticketmaster engaged in a variety of tactics to eliminate competition and monopolize markets:

• Relationship with Oak View Group: Live Nation-Ticketmaster exploits its longtime relationship with Oak View Group, a potential competitor-turned-partner that has described itself as a “hammer” and “protect[or]” for Live Nation. In recent years, Oak View Group has avoided bidding against Live Nation for artist talent and influenced venues to sign exclusive agreements with Ticketmaster. For example, Live Nation has scolded Oak View Group multiple times for trying to compete. In one instance, Live Nation asked, “who would be so stupid to . . . play into [an artist agent’s] arms,” and on another occasion, Live Nation stated, “let’s make sure we don’t let [the artist agency] now start playing us off.”
• Retaliating Against Potential Entrants: Live Nation-Ticketmaster successfully threatened financial retaliation against a firm unless it stopped one of its subsidiaries from competing to gain a foothold in the U.S. concert promotions market.
• Threatening and Retaliating Against Venues that Work with Rivals: 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.
• Locking Out Competition with Exclusionary Contracts: Live Nation-Ticketmaster locks concert venues into long-term exclusive contracts so that venues cannot consider or choose rival ticketers or switch to better or more cost-effective ticketing technology. These contracts allow Live Nation-Ticketmaster to reduce competitive pressure to improve its own ticketing technology and customer service.
• Blocking Venues from Using Multiple Ticketers: Live Nation-Ticketmaster’s conduct and exclusive contracts prevent new and different promotions and ticketing competitors and business models from emerging. They block venues from being able to use multiple ticketers, who would compete by offering the best mix of prices, fees, quality, and innovation to fans.
• Restricting Artists’ Access to Venues: Live Nation-Ticketmaster has increasingly gained control of key venues, including amphitheaters, through acquisitions, partnerships, and agreements. Live Nation-Ticketmaster restricts artists’ use of those venues unless those artists also agree to use their promotion services.
• Acquiring Competitors and Competitive Threats: Live Nation-Ticketmaster strategically acquired a number of smaller and regional promoters that it had internally identified as threats. This has undermined competition and impacted artist compensation.

According to The New York Times, Live Nation denied accusations of operating a monopoly and pointed to other parties like performers and professional sports teams for dictating the price of tickets. Live Nation’s executive vice president of corporate and regulatory affairs, Dan Wall, who said the action taken by the DOJ came after “intense political pressure,” provided a statement to The New York Times.

“[The lawsuit] ignores everything that is actually responsible for higher ticket prices,” Wall stated. “From increasing production costs to artist popularity, to 24/7 online ticket scalping that reveals the public’s willingness to pay far more than primary tickets cost.”

In April, a report by The Wall Street Journal revealed the DOJ’s plans to file an antitrust lawsuit against Live Nation. The WSJ report stated, “Ticketmaster now holds more than 80% of the market for primary ticket sales in the biggest venues in the U.S. It has exclusive ticketing contracts with many of the stadiums and arenas where high-profile acts perform.”

In its 2022 filing with the Securities and Exchange Commission (SEC), Live Nation reported:

We believe we are the largest producer of live music concerts in the world, based on total fans that attend Live Nation events as compared to events of other promoters, connecting over 121 million fans to more than 43,600 events for over 7,800 artists in 2022. Live Nation owns, operates, has exclusive booking rights for or has an equity interest for which we have a significant influence in 338 venues globally, including House of Blues® music venues and prestigious locations such as The Fillmore® in San Francisco, Brooklyn Bowl®, the Hollywood Palladium, the Ziggo Dome in Amsterdam, 3Arena in Ireland, Royal Arena in Copenhagen and Spark Arena in New Zealand.

We believe we are one of the world’s leading artist management companies based on the number of artists represented. Our artist management companies manage music artists and acts across all music genres. As of December 31, 2022, globally we had over 90 managers providing services to more than 410 artists.

We believe we are the world’s leading live entertainment ticketing sales and marketing company, based on the number of tickets we sell. Ticketmaster provides ticket sales, ticket resale services and marketing and distribution globally through www.ticketmaster.com and www.livenation.com and our other websites, mobile apps, numerous retail outlets and call centers, selling over 550 million tickets through our systems in 2022. Ticketmaster serves approximately 9,300 clients worldwide across multiple event categories, providing ticketing services for leading arenas, stadiums, festival and concert promoters, professional sports franchises and leagues, college sports teams, performing arts venues, museums and theaters.

The U.S. Department of Justice opened an investigation into Live Nation in November 2022. The DOJ appeared to move in response to the debacle that occurred when a pre-sale for Taylor Swift’s Eras Tour tickets experienced unprecedented demand, causing the website to crash and many Swifties ticketless.

Ticketmaster reported it sold two million tickets during the Eras Tour pre-sale. The company also wrote a lengthy blog post in response to the situation.

“[W]e want to apologize to Taylor and all of her fans – especially those who had a terrible experience trying to purchase tickets,” Ticketmaster stated. “Historically, we’ve been able to manage huge volume coming into the site to shop for tickets, so those with Verified Fan codes have a smooth shopping process. However, this time the staggering number of bot attacks as well as fans who didn’t have codes drove unprecedented traffic on our site, resulting in 3.5 billion total system requests – 4x our previous peak.”

In a since-deleted social media post, Swift responded to the “excruciating” Ticketmaster fiasco, stating:

“It goes without saying that I’m extremely protective of my fans. It’s really difficult for me to trust an outside entity with these relationships and loyalties, and excruciating for me to just watch mistakes happen with no recourse. I’m not going to make excuses for anyone because we asked them, multiple times, if they could handle this kind of demand and we were assured they could. It’s truly amazing that 2.4 million people got tickets, but it really pisses me off that a lot of them feel like they went through several bear attacks to get them.”

In response to the Taylor Swift ticketing mess, U.S. Senator Amy Klobuchar (D-MN) wrote a letter to Ticketmaster president and CEO Michael Rapino.

“I write to express serious concerns about the state of competition in the ticketing industry and its harmful impact on consumers,” Klobuchar wrote. “Reports about system failures, increasing fees, and complaints of conduct that violate the consent decree Ticketmaster is under suggest that Ticketmaster continues to abuse its market positions.

“Ticketmaster’s power in the primary ticket market insulates it from the competitive pressures that typically push companies to innovate and improve their services. That can result in the types of dramatic service failures we saw this week, where consumers are the ones that pay the price.”

A group of Taylor Swift fans responded to the Ticketmaster on-sale debacle with a lawsuit filed against the ticketing company. The plaintiffs in the case were Swifties from across the country who alleged Ticketmaster should be punished for disastrous pre-sale for Swift’s Eras Tour that led to the cancellation of the tour’s initial general on-sale.

In 2023, Klobuchar – chairwoman of the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights – co-led a hearing before the subcommittee titled “That’s The Ticket: Promoting Competition and Protecting Consumers in Live Entertainment.” Executives from Live Nation appeared at the hearing and were questioned about the company’s practices related to ticket sales, fees and other aspects of the live music industry.

In 2020, Ticketmaster faced a $3 million fine from the Department of Justice due to breaches of a consent decree stemming from its merger with Live Nation. The decree, originally set to expire, has been prolonged until 2025. Under the extension, Ticketmaster must ensure its adherence to the decree, facing a $1 million penalty for any subsequent violations.