The U.S. Department of Justice is suing to interrupt up Live Nation, the parent company of Ticketmaster, over alleged antitrust violations.
The lawsuit, joined by 30 states and filed Thursday, follows a DOJ investigation into whether Live Nation maintains a monopoly within the ticketing industry, a probe launched in 2022 and bolstered by fan complaints after a botched rollout for tickets to Taylor Swift’s Eras Tour.
“We allege that Live Nation relies on illegal, anticompetitive conduct to exercise its monopolistic control over the live events industry in america at the associated fee of fans, artists, smaller promoters, and venue operators,” said Attorney General Merrick Garland in an announcement. “The result’s that fans pay more in fees, artists have fewer opportunities to play live shows, smaller promoters get squeezed out, and venues have fewer real decisions for ticketing services. It’s time to break up Live Nation-Ticketmaster.”
Shares of Live Nation fell greater than 7% on Thursday.
In an announcement, Live Nation said the DOJ’s allegations of a monopoly are “absurd.”
“The DOJ’s grievance attempts to portray Live Nation and Ticketmaster because the reason for fan frustration with the live entertainment industry. It blames concert promoters and ticketing corporations—neither of which control ticket prices—for prime ticket prices. It ignores all the pieces that is definitely liable for higher ticket prices, from increasing production costs to artist popularity, to 24/7 online ticket scalping that reveals the general public’s willingness to pay way over primary tickets cost,” said Dan Wall, Live Nation executive vp for corporate and regulatory affairs.
Venue dominance
Live Nation and Ticketmaster merged in 2010, making a dominant entity within the live event industry. The corporate directly manages greater than 400 artists, controls around 60% of concert promotions at major concert venues, operates and manages ticket sales for live entertainment globally, and likewise owns and operates greater than 265 entertainment venues in North America, including over 60 of the highest 100 amphitheaters, in keeping with the DOJ lawsuit.
Through Ticketmaster, Live Nation controls roughly 80% or more of major concert venues’ primary ticketing for live shows, the grievance said.
“Taken individually and regarded together, Live Nation’s and Ticketmaster’s conduct allows them to take advantage of their conflicts of interest — as a promoter, ticketer, venue owner and artist manager — across the live music industry and further entrench their dominant position,” the grievance reads.
U.S. Attorney General Merrick Garland takes questions from reporters during a news conference on the Department of Justice Constructing on May 23, 2024 in Washington, DC.Â
Kent Nishimura | Getty Images
The Justice Department lawsuit, filed within the U.S. District Court for the Southern District of Recent York, accuses Live Nation of violating the Sherman Act and maintaining a self-reinforcing business model by capturing fees and revenue from concert fans and sponsorships, which it then uses to lock artists into exclusive promotion deals that give the artists access to key entertainment venues across the country. Live Nation then uses that dominance to lock latest concert venues into long-term exclusionary contracts, thereby restarting the cycle, the lawsuit claims.
Live Nation can be accused of threatening financial retaliation against potential competitors and venues that work with rivals; strategically acquiring smaller and regional competitive threats for the aim of growing their competitive moat; and exploiting a relationship with venue partner Oak View Group, flipping the latter’s contracts over to Ticketmaster and discouraging competition in concert promotions.
The lawsuit claims that Live Nation has discouraged bidding wars for artists and has unlawfully pressured artists into signing on for promotional services in the event that they need to use the corporate’s venues, at times sacrificing profits it may well earn as a venue owner by preferring to let its venues sit empty reasonably than have artists with other promotional contracts.
“In its own words, Live Nation uses its exclusionary conduct as a ‘hedge against significant improvements by the competition or perhaps a latest competitor.’ But the associated fee of that hedge is one which all of us pay, for instance a broken ticketing website with substandard customer support that also captures your invaluable data,” Assistant Attorney General Jonathan Kanter said during a press conference.
“It is thru these exclusive ticketing arrangements that Americans face the dreaded Ticketmaster tax, the seemingly countless set of fees satirically named service fee or convenience fee once they are anything but,” Kanter said.
Ticket prices
Live Nation made headlines last 12 months when a surge of demand from 14 million users, including bots, for Taylor Swift concert tickets led to site disruptions and slow queues. A Senate subcommittee issued a subpoena to Live Nation and Ticketmaster in November 2023, following a monthslong probe prompted by the exorbitant inflated ticket prices in Swift’s Eras Tour.
Steep prices for the U.S. shows led scores of fans to hunt down tickets to Swift’s tour in other countries, which could often be cheaper even after international air travel.
“In other countries where venues should not sure by Ticketmaster’s exclusive ticketing contracts, venues often use multiple ticketing corporations for a similar event and fans see lower fees and more revolutionary ticketing products because of this,” Garland said in a news conference.
Live Nation said Thursday it doesn’t profit from monopoly pricing, saying that Ticketmaster service charges “are not any higher than elsewhere, and regularly lower.” The corporate noted its overall net profit margin is on the low end of S&P 500 corporations.
Live Nation further argued the lawsuit won’t reduce ticket prices or service fees. It said artist teams set prices for his or her tickets and the venues set and keep the vast majority of ticket fees.
“Some call this ‘anti-monopoly’, but in point of fact it’s just anti-business,” Live Nation’s Wall said. “There isn’t any legal basis for objecting to vertical integration on these grounds.”
Live Nation earlier this month reported its “biggest Q1 ever,” citing first-quarter revenue that was up 21% from the prior-year period.
The corporate has also been in the general public eye up to now 12 months over transparency issues regarding hidden fees in ticket pricing.
