Live Nation Sued By Justice Department In Antitrust Lawsuit Seeking Break Up

Winston Cho
·8 min read
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The Justice Department has sued Live Nation for antitrust violations tied to its dominance over the live events industry.

The department joined 29 states and the District of Columbia to file in New York district court on Thursday a lawsuit accusing the Ticketmaster parent of leveraging its unrivaled positions as the nation’s largest concert promoter, ticket seller and venue owner to undermine competition. It accuses the company of illegally locking venues into exclusive ticketing contracts, pursuing anticompetitive acquisitions intended to stifle competition and retaliating against rivals.

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The lawsuit looks to break up Live Nation and Ticketmaster after competition enforcers passed on trying to block their 2010 merger. It seeks a court order directing the “divestiture of, at minimum, Ticketmaster.” The government hopes to reduce reduce ticket prices and fees by separating the two companies. It could drastically slash the company’s sprawling footprint across all avenues of the live events industry.

In a statement, Live Nation said the lawsuit “won’t solve the issues fans care about relating to ticket prices, service fees, and access to in-demand shows.” It added, “Calling Ticketmaster a monopoly may be a PR win for the DOJ in the short term, but it will lose in court because it ignores the basic economics of live entertainment, such as the fact that the bulk of service fees go to venues, and that competition has steadily eroded Ticketmaster’s market share and profit margin.”

Live Nation president Joe Berchtold, in a May earnings call, said that a breakup of Live Nation and Ticketmaster isn’t a “legally permissible remedy.” It reported first quarter revenue of $3.8 billion, up 21 percent year over year, propelled by strong demand for its ticketing and promotion services.

The long-awaited lawsuit caps years of regulatory scrutiny of Live Nation’s reach in ticket sales, concert promotion and venue operations. It’s not the company’s first run-in with competition enforcers. The Justice Department found in 2019 that the company had been violating the terms of a settlement to greenlight its 2010 merger with Ticketmaster by strongarming venues to accept Ticketmaster’s services as a condition for hosting Live Nation performers and retaliating against those that refused.

Since 2022, the Justice Department under Joe Biden’s administration has been pursuing a probe into the company investigating allegations that it continues to violate its prior deal. Scrutiny intensified following Ticketmaster’s failure to service massive demand for Taylor Swift concert tickets. In a Senate hearing over the ticket debacle, some lawmakers called Live Nation a “monopoly” that should be broken up. Berchtold blamed its bungling of Swift’s ticket sales on bots and cyber attacks.

The lawsuit alleges Live Nation violated antitrust laws through a “self-reinforcing flywheel” that the company created to “connect their multiple interconnected businesses and interests.” This includes retaliating against potential competitors, acquiring rivals, threatening venues that work with adversaries and blocking venues from using multiple ticketing services, among other things.

A major focus of the lawsuit is Live Nation’s “competitive détente” with rival venue development and management company Oak View Group, which has a portfolio of over 200 venues across the nation. The government claims the duo colluding by establishing a partnership to “allocate business lines” and avoid competing with each other, charting a “mutually beneficial plan to cement” the Ticketmaster parent’s dominance.

The lawsuit alleges the companies agreed not to compete against each other for artists and tours. In 2016, Live Nation chief executive Michael Rapino emailed Oak View Group, which offered to promote an artist Live Nation formerly worked with, warning that such competition would lead to artists demanding more compensation, according to the complaint. He wrote, “Whats up? We have done his [touring] and vegas[.] Let’s make sure we don’t let [the artist agency] now start playing us off,” the lawsuit says. After the exchange, Oak View Group withdrew its bid. The complaint details several other instances of the company backing down after bring confronted by Live Nation.

“Oak View Group now operates as an agent and a self-described ‘pimp’ and ‘hammer’ for Live Nation, often influencing venues and artists for the benefit” of the Ticketmaster parent,” the complaint stated.

In 2018, private equity firm Silver Lake acquired a controlling stake in Oak View Group through a $100 million investment.

In exchange for ceding concert promotions to Live Nation, Oak View Group gained ground in its arena consulting business, the lawsuit claims. The Justice Department says the partnership extended to Oak View Group recognizing that it has a “significant financial interest in maintaining existing Ticketmaster contracts at its venues and converting other venues to Ticketmaster” under a 2022 long-term agreement between the two companies. The deal allows the pair to tie up all of its facilities to exclusive 10 year deals, among other things.

Other deals the government takes issue with include Live Nation’s acquisitions of Utah promoter and venue owner United Concerts in 2017, regional independent promoter AC Entertainment in 2016 and promoter Frank Productions in 2018.

Another thrust of the complaint is Live Nation’s alleged threats to competitors to blunt their expansion into concert promotion. In 2021, for example, the company said it would retaliate against Silver Lake unless one of its portfolio companies, TEG, stopped competing for artist promotion contracts. Live Nation’s relationship with the private equity firm soured after the incident, according to the complaint.

The government also targets Live Nation locking venues into long-term ticketing agreements with Ticketmaster. The company “puts a ‘choice’ to venues: use Ticketmaster and potentially receive a significant payment for long-term exclusivity or use another ticketer and risk losing access to the vast array of Live Nation assets, including lucrative concerts,” the complaint states. Because of Live Nation’s sprawling footprint in the live events industry, it can move shows to less desirable and less lucrative dates, curtail promotion efforts and force venues to disable secondary ticketing.

Ticketmaster’s exclusive agreements, which can last as long as a decade, cover more than 75 percent of concert ticket sales at major venues, the government alleges.

According to the Justice Department, Live Nation controls roughly 80 percent of major concert venues’ primary ticketing and 60 percent of concert promotions.

“It is time to break it up,” said attorney general Merrick Garland in a statement announcing the lawsuit.

In a statement, Live Nation executive vice president or corporate and regulatory affairs said it’s “absurd to claim that Live Nation and Ticketmaster are wielding monopoly power.” He added, “It 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 Justice Department challenges the 2010 Live Nation, Ticketmaster merger under section two of the Sherman Act, which prohibits acquiring or maintaining a monopoly through anticompetitive means.

Alden Abbott, former FTC general counsel, says the government will have to “prove that Live Nation engaged in exclusionary behavior” or business conduct that “inefficiently excludes competition from the market it dominates.”

“Merely charging high prices or having occasional non-intentional service glitches is not enough to violate the law,” he explains, pointing to the Swift ticketing debacle.

Jessica Melugin, director of the Center for Technology and Innovation, was skeptical the lawsuit will result in any substantive change. “Unless the government can clone Taylor Swift or Beyoncé, it’s hard to imagine major changes for concert goers,” she says. “Adjusting how tickets are allocated by breaking up the vertical integration in this chain may not result in lower prices because you ultimately can’t make more of any one artist.”

Under an amendment to the 2010 deal that allows a monitor to investigate further breaches of the consent decree until 2025, the company was barred from tying services and is subject to a $1 million fine for violations.

In the years leading up to the Justice Department’s lawsuit, Live Nation was sued by consumers across several states in purported class actions accusing the company of coercing venues into boycotting competing ticketing platforms. One of the complaints argued that the 2010 merger with Ticketmaster allowed it to overcharge users. It’s also been named in investor lawsuits for allegedly failing to disclose the scope of its legal vulnerability for abusing its power in the live music industry. In a statement, DC Attorney General Brian Schwalb said Live Nation has “grown to dominate nearly every corner of the live entertainment ecosystem, developing a stranglehold on the industry that has eliminated any meaningful competition.” He added, “Almost every sizable concert venue in the District is locked into a Ticketmaster deal, resulting in District concertgoers paying Ticketmaster’s exorbitant fees to enjoy shows.”

Jack Groetzinger, chief executive of SeatGeek, said in a statement that it’s “hopeful that the Department of Justice’s antitrust lawsuit to break up the Live Nation-Ticketmaster monopoly will restore fair market competition to live entertainment.”

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