U.S. Calls for Breakup of Ticketmaster Owner
U.S. Calls for Breakup of Ticketmaster Owner
Accused of violating antitrust laws, Live Nation Entertainment faces a fight that could reshape the multibillion-dollar live music industry.
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By David McCabe and Ben Sisario
David McCabe reports on tech policy from Washington. Ben Sisario reports on the music industry from New York. May 23, 2024Updated 11:11 a.m. ET
The Justice Department on Thursday sued Live Nation Entertainment, the concert giant that owns Ticketmaster, asking a court to break up the company over claims it illegally maintained a monopoly in the live entertainment industry.
In the lawsuit, which is joined by 29 states and the District of Columbia, the government accuses Live Nation of dominating the industry by locking venues into exclusive ticketing contracts, pressuring artists to use its services and threatening its rivals with financial retribution.
Those tactics, the government argues, have resulted in higher ticket prices for consumers and have stifled innovation and competition throughout the industry.
“It is time to break up Live Nation-Ticketmaster,” Merrick Garland, the attorney general, said in a statement announcing the suit, which was filed in the U.S. District Court for the Southern District of New York. The suit asks the court to order “the divestiture of, at minimum, Ticketmaster,” and to prevent Live Nation from engaging in anticompetitive practices.
The lawsuit is a direct challenge to the business of Live Nation, a colossus of the entertainment industry and a force in the lives of musicians and fans alike. The case, filed 14 years after the government approved Live Nation’s merger with Ticketmaster, has the potential to transform the multibillion-dollar concert industry.
Live Nation’s scale and reach far exceed those of any competitor, encompassing concert promotion, ticketing, artist management and the operation of hundreds of venues and festivals around the world.
According to the Justice Department, Live Nation controls around 60 percent of concert promotions at major venues around the United States and roughly 80 percent of primary ticketing at major concert venues.
Lawmakers, fans and competitors have accused the company of engaging in practices that harm rivals and drive up ticket prices and fees. At a congressional hearing early last year, prompted by a Taylor Swift tour presale on Ticketmaster that left millions of people unable to buy tickets, senators from both parties called Live Nation a monopoly.
In its complaint, the Justice Department refers to the many add-on fees as “essentially a ‘Ticketmaster Tax’ that ultimately raise the price fans pay.”
In response to the suit, Live Nation denied that it was a monopoly and said that breaking it up would not result in lower ticket prices or fees. According to the company, artists and sports teams are primarily responsible for setting ticket prices, and other business partners, like venues, take the lion’s share of surcharges.
In a statement, Dan Wall, Live Nation’s executive vice president of corporate and regulatory affairs, said that the Justice Department’s suit followed “intense political pressure.”
The government’s case, Mr. Wall added, “ignores everything that is actually responsible for higher ticket prices, 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.”
The company also says its market share for ticketing has decreased in the recent years as it competes with rivals to win business.
In recent years, American regulators have sued other major companies, testing century-old antitrust laws against new power wielded by major companies over consumers. The Justice Department sued Apple in March, arguing the company has made it difficult for customers to ditch its devices, and has already brought two cases arguing Google violated antitrust laws. The Federal Trade Commission last year filed an antitrust lawsuit against Amazon for harming sellers on its platform and is pursuing another against Meta, in part for its acquisitions of Instagram, Facebook and WhatsApp.
The Justice Department allowed Live Nation, the world’s largest concert promoter, to buy Ticketmaster in 2010 under certain conditions laid out in a legal agreement. If venues did not use Ticketmaster, for example, Live Nation could not threaten to pull concert tours.
In 2019, however, the Justice Department found that Live Nation had violated those terms, and it modified and extended its agreement with the company.
The Justice Department argued in its lawsuit it provided to The New York Times that Live Nation exploited relationships with partners to keep competitors out of the market. It requests a jury trial.
The government’s complaint argued that Live Nation threatened venues with losing access to popular tours if they did not use Ticketmaster. That threat could be explicit or simply an implication communicated through intermediaries, the government said, adding it could also block artists who did not work with the company from using its venues.
Additionally, Live Nation has acquired a number of smaller companies — something Live Nation described in internal documents as eliminating its biggest threats, according to the government.
The Justice Department accused Live Nation of anticompetitive behavior with the Oak View Group, a venue company co-founded by Live Nation’s former executive chairman. Oak View Group has avoided bidding against Live Nation when it comes to working with artists and it has influenced concert venues to sign deals with Ticketmaster, the government argues.
In 2016, Live Nation’s chief executive complained in an email that the Oak View Group had offered to promote an artist that had previously worked with Live Nation. Oak View Group backed down, according to the government.
“Our guys got a bit ahead,” the company’s chief executive replied in an email, according to the government. “All know we don’t promote and we only do tours with Live Nation.”
The Justice Department’s latest investigation of Live Nation began in 2022. Live Nation simultaneously ramped up its lobbying efforts, spending $2.4 million on federal lobbying in 2023, up from $1.1 million in 2022, according to filings available through the nonpartisan website OpenSecrets.
In April, the company co-hosted a lavish party in Washington ahead of the annual White House Correspondents’ Association dinner that featured a performance by the country singer Jelly Roll and cocktail napkins that displayed positive facts about Live Nation’s impact on the economy, like the billions it says it pays to artists.
Under pressure from the White House, Live Nation said in June that it would begin to show prices for shows at venues it owned that included all charges, including extra fees. The Federal Trade Commission has proposed a rule that would ban hidden fees.
A former chairman of the commission, Bill Kovacic, said Wednesday that a lawsuit against the company would be a rebuke of earlier antitrust officials who had allowed the company to grow to its current size.
“It’s another way of saying earlier policy failed and failed badly,” he said.
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Nothing substantial will come of this.
I have no hope, but it will be interesting to track the excuses as to why this fails.
Someone I know used to work for the DOJ's antitrust division. She left that job to go work for Google. It's a big club, and we ain't in it.
I don’t think it fails, but I do think that our antitrust enforcement is a joke. It would just be a “next man up” type of situation where all ticket sales would eventually fall under the control of a different conglomerate.
Damn sure would be crazy to have a one way door, revolving but only one direction like a subway till, for regulatory positions or really just any related gov position to a private industry.
Like you could leave private industry to go to the gov to become a lawmaker or enforcer- but you can never go back in any capacity. Even that still has potential for massive abuse unless those people are constantly monitored by objective outsiders. It's possible to make this stuff work, but it requires a bunch of "actually wanting to fix stuff" from people who can make laws. Like raising pay for the regulators so it's not seen as a waste of time to work for the government when you can make wherever times more in private sector. Heavily penalize CEOs who engage in corruption tactics when caught and equally heavily penalize (talking prison for all these people) the individuals who engaged in the corruption in the government AND their bosses if it's reasonable that they knew or should have known. Basically go from the person who got caught up the chain of command and punishments get harsher the more power/money they hold.
But who the hell would willingly cede this power to outside regulators and who regulate the regulators? It all requires a fundamental mandate, backed by external pressures and implicit threats, from the public that the government is supposed to serve. Americans are way too undereducated on these things and all they'll think about a corrupt gov official is "get rid of it!" Which is exactly what the CEOs want. And they don't give a shit about the CEOs gaming things because "it's smart" and "what they would do too!" As if having an elaborate set of revolving doors is the same as claiming something stupid on your taxes so you get an extra $100 back in your refund... goddamn I hate not just how ignorant people are but how they're so confidently stupid in their ignorance. "Exquisite morons" as a famous author said recently.
But who the hell would willingly cede this power to outside regulators and who regulate the regulators?
Nobody ever cedes power, they just start paying for the regulation they want or don’t want.
And they don't give a shit about the CEOs gaming things because "it's smart" and "what they would do too!"
Exactly, most people see the system for what it is, accept it, and yearn to climb the ladder too.