Maryland joins lawsuit against Ticketmaster and Live Nation

On Thursday, Maryland joined the Justice Department, 28 other states and the District of Columbia in an antitrust lawsuit against Ticketmaster and its parent company Live Nation Entertainment, alleging a monopoly in the live entertainment industry that harms concert-going fans.

The move could realign the music industry by splitting the concert promotion and ticketing giant, and follows state legislation regulating online ticket sales signed into law this month by Gov. Wes Moore.

“When the world’s largest live entertainment company illegally dominates ticket sales, artist management and promotion, and seat selection, fans are the most harmed,” Attorney General Anthony Brown said in a statement announcing the lawsuit Thursday morning. “This unlawful behavior drives up prices, leaves fans with poor customer service and limits people’s access to live entertainment.”

The antitrust lawsuit filed in the U.S. District Court for the Southern District of New York accuses Live Nation of violating federal and state laws, including Maryland law.

The lawsuit alleged that Live Nation “uses threats… and pressure campaigns designed to suppress competitors” and uses long-term exclusive contracts to prevent concert venues from working with competing ticket sellers. The lawsuit highlights Live Nation’s so-called “flywheel.”

“The flywheel is the self-perpetuating Live Nation-Ticketmaster business model, which captures fees and revenue from concert fans and sponsorships, uses that revenue to provide artists with exclusive promotional offers, and then leverages its massive cache of live content to sign deals with venues on long concerts. long-term exclusive ticketing agreements, thus starting the cycle all over again,” the Department of Justice said in a statement.

The lawsuit also examines Live Nation’s business conduct toward Oak View Group, which it calls a “potential competitor-turned-partner.”

Oak View Group owns and operates Baltimore’s CFG Bank Arena, which opened last year after a $250 million renovation and has attracted big names to the city. The Justice Department alleged that Live Nation-Ticketmaster “exploited its long-standing relationship” with Oak View Group, which it said “avoided bidding against Live Nation to acquire artist talent and influenced venues by signing exclusive contracts with Ticketmaster.”

In a Thursday morning email, Live Nation rejected the lawsuit’s claim that it constitutes a monopoly, saying artist teams set ticket prices and venues collect most of the ticket fees. The company said its net profit margin last fiscal year was just over 1%, and Ticketmaster’s market share has declined since its merger with Live Nation, which it attributed to competition.

“The Department of Justice’s complaint attempts to paint Live Nation and Ticketmaster as the cause of fan frustration in the live entertainment industry,” Dan Wall, Live Nation’s executive vice president of corporate and regulatory affairs, said in a statement. “He blames the high ticket prices on concert organizers and ticket selling companies – neither of them controls ticket prices. It ignores everything that is actually responsible for higher ticket prices, from rising production costs to the popularity of artists to the 24/7 online ticket scalping that reveals audiences’ willingness to pay much more than the cost of the original tickets.”

“It is also absurd to claim that Live Nation and Ticketmaster exercise monopoly power,” Wall continued. “The characteristic feature of a monopolist is monopoly profits derived from monopoly prices. Live Nation does not fit this profile in any way. … The company is profitable and growing because it helps grow the industry, not because it has market power.”

Brown said Thursday that Live Nation is “exclusive admission to almost every major concert hall” in Maryland, D.C. and Virginia, citing Pier Six Pavilion in Baltimore, Fillmore Silver Spring and Maryland Hall in Annapolis as local examples.

The Justice Department said Live Nation owns or controls more than 60 of the nation’s top 100 amphitheaters, totaling more than 265 concert halls in North America. In 2010, it merged with Ticketmaster.

Thursday’s lawsuit calls for enforcement to end Live Nation’s alleged “anticompetitive practices” and jury trial, as well as the divestment of Ticketmaster.

“The federal government really has an obligation to take action against Ticketmaster and Live Nation. Everyone knows the behemoth that is Ticketmaster,” said Sen. Dawn Gile, a Democrat who represents part of Anne Arundel County.

This year, Maryland lawmakers passed a bill sponsored by Gile that would protect consumers who buy event tickets online.

Under the regulations, electronic platforms enabling the sale, purchase or resale of event tickets must disclose the total price of tickets, including all fees and taxes, as well as a breakdown of the fees that make up the total cost, excluding shipping fees for physical tickets.

The law, which will come into force on July 1, also prohibits the sale of speculative tickets – tickets that are not in physical possession, property or contract and are to be transferred to the seller.

It also requires the attorney general’s office to conduct a review of the Maryland event ticket market, including how brokers and sellers obtain tickets and how they price them compared to their face value.

“I was asked several questions … why my bill seemed to be more geared toward the aftermarket,” including platforms like StubHub and SeatGeek, Gile said. “The reason I gave at the time was that the main attack on Ticketmaster actually rests on federal law.”

She said high ticket prices have frustrated fans and that she expects a positive outcome for fans in Maryland if the lawsuit is successful.

“I am pleased to see Maryland becoming a leader on this issue and recognizing the importance of consumer protection,” she said. “I think we will see a fair market for purchasing tickets, but I think there is still a lot of work ahead of us.”