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Department of Justice sues Live Nation, parent company of Ticketmaster
“We allege that Live Nation relies on illegal and anticompetitive conduct to exert its monopolistic control over the live events industry in the United States, at the expense of fans, artists, small promoters and venue operators,” said Attorney General Merrick Garland in a statement. . “The result is that fans pay more fees, artists have fewer opportunities to play shows, smaller promoters are priced out, and venues have fewer real ticketing service options. It’s time to end Live Nation-Ticketmaster.”
Live Nation shares fell more than 7% on Thursday.
In a statement, Live Nation said the DOJ’s claims of monopoly are “absurd.”
“The DOJ’s complaint attempts to portray Live Nation and Ticketmaster as the cause of fan frustration with the live entertainment industry. It blames concert promoters and ticketing companies – neither of which control ticket prices – for high ticket prices. Ignores everything that is actually responsible for higher ticket prices, from rising production costs to the popularity of artists, to 24/7 online ticket scalping, that reveals the public’s willingness to pay much more than the primary cost of tickets,” said Dan Wall, Live Nation’s executive vice president for corporate and regulatory affairs.
Live Nation and Ticketmaster merged in 2010, creating a dominant entity in the live events industry. The company directly manages more than 400 artists, controls approximately 60% of concert promotions at major concert venues, operates and manages ticket sales for live entertainment worldwide, and also owns and operates more than 265 entertainment venues in the North America, including more than 60 of the top 100 amphitheaters, according to the DOJ lawsuit.
Through Ticketmaster, Live Nation controls about 80% or more of the top box offices at major concert venues, the complaint said.
“Taken individually and considered together, the conduct of Live Nation and Ticketmaster allows them to exploit their conflicts of interest – as promoters, ticket agents, venue owners and arts managers – across the live music industry and further consolidate its dominant position,” the complaint says.
U.S. Attorney General Merrick Garland answers questions from reporters during a news conference at the Department of Justice building on May 23, 2024 in Washington, DC.
Kent Nishimura | Getty Images
The Justice Department’s lawsuit, filed in the U.S. District Court for the Southern District of New York, accuses Live Nation of violating the Sherman Act and maintaining a self-reinforcing business model that captures fees and revenue from music fans. shows and sponsorships, which it then uses to lock artists into exclusive promotional deals that give artists access to top entertainment venues across the country. Live Nation then uses that dominance to lock new concert venues into long-term exclusionary agreements, thereby starting the cycle all over again, the suit claims.
Live Nation is also accused of threatening financial retaliation against potential competitors and venues that work with rivals; strategically acquire regional and smaller competitive threats with the aim of increasing its competitive gap; and exploring a relationship with partner Oak View Group, transferring the latter’s contracts to Ticketmaster and discouraging competition in concert promotions.
The suit alleges that Live Nation has discouraged bidding wars for artists and illegally pressured artists to sign up for promotional services if they want to use the company’s venues, sometimes sacrificing the profits it can make as a venue owner by preferring to let its venues sit idle. empty instead of having artists with other promotional contracts.
“In its own words, Live Nation uses its exclusionary conduct as a ‘protection against significant improvements from the competition or even a new competitor.’ But the cost of that protection is one we all pay, for example, a broken ticketing website with shoddy customer service that still captures your valuable data,” said Assistant Attorney General Jonathan Kanter during a press conference .
“It is through these exclusive ticketing agreements that Americans face the dreaded Ticketmaster tax, the seemingly endless set of fees ironically called a service fee or convenience fee, when they are anything but,” Kanter said.
Live Nation made headlines last year when it saw a surge in demand from 14 million users, including bots, for Taylor Swift concert tickets. led to website outages and slow queues. A Senate subcommittee issued a subpoena to Live Nation and Ticketmaster in November 2023, following a month-long investigation prompted by exorbitant ticket prices for Swift’s Eras Tour.
High concert prices in the US have led many fans to look for tickets to Swift’s tour in other countries, which could often be cheaper even after international air travel.
“In other countries where venues are not tied to exclusive Ticketmaster ticket sales contracts, venues often use multiple ticket companies for the same event and fans see lower fees and more innovative ticket products as a result,” he said. Garland at a press conference.
Live Nation said Thursday that it does not benefit from monopoly pricing, saying Ticketmaster’s service fees are “no higher than elsewhere, and often lower.” The company noted that its overall net profit margin is at the low end of S&P 500 companies.
Live Nation further argued that the lawsuit will not reduce ticket prices or service fees. He said artist teams set their ticket prices and venues set and keep most of the ticket fees.
“Some call it ‘anti-monopoly,’ but in reality it’s just anti-business,” said Live Nation’s Wall. “There is no legal basis to oppose vertical integration on these grounds.”
Live Nation earlier this month reported its “biggest first quarter ever”, citing first quarter revenue that increased 21% compared to the same period last year.
The company was also in the public eye last year transparency issues about hidden fees in ticket prices.