New Jersey Joins Live Nation, Ticketmaster Antitrust Suit

The Department of Justice announced a civil antitrust lawsuit against Live Nation and its Ticketmaster subsidiary on Thursday. The filing alleges that the company has illegally monopolized the live entertainment industry.

The lawsuit was filed in the United States District Court for the Southern District of New York. A coalition of 30 state and district attorneys general, including New Jersey Attorney General Matthew Platkin, signed onto the complaint.

It alleges multiple violations of the federal Sherman Act and the New Jersey Antitrust Act.

Live Nation describes itself as “the world’s largest live entertainment company.” It owns or controls more than 265 concert halls in North America. The company generates more than $22 billion in annual revenue worldwide in three areas: concerts, ticket sales, and sponsorships and advertising.

Here in the Garden State, Live Nation operates venue and/or ticketing operations at MetLife Stadium, Prudential Center, PNC Bank Arts Center and Freedom Mortgage Pavilion.

“The lawsuit describes how Live Nation’s $22 billion business has built an ecosystem in which Live Nation can not only generate revenue at every stage as an intermediary, but in many cases can also double down on business lines – such as ticketing and promoters.” – the New Jersey Attorney General’s Office said in a press release. “These practices create a feedback loop that inflates fees and revenues, all at the expense of fans. As a result, relationships between artists and fans are strained, and artists can no longer freely decide where and when they will perform – all in order to increase Live Nation’s profits.”

Key allegations in the lawsuit include that Live Nation:

• It maintained its competitive monopoly in ticket markets by closing venues under restrictive, long-term exclusive contracts
• Venues were threatened with losing access to Live Nation-controlled tours and artists if they signed with a competing ticket seller
• It uses its extensive network of amphitheaters to force artists to choose it as a promoter over competitors, maintaining a monopoly on promotion
• It has harmed fans by introducing higher fees, a lack of transparency, fewer consumer choices and stifling innovation.

The complaint calls on the court to:

• Prohibit Live Nation from engaging in anti-competitive practices
• Order Live Nation to divest from Ticketmaster
• Get fair financial help to address Live Nation’s unlawful conduct

It’s time to part ways

Attorney General Merrick Garland announced the lawsuit at a news conference Thursday.

“We allege that Live Nation relies on unlawful, anticompetitive conduct to exercise its monopoly control over the live events industry in the United States at the expense of fans, artists, smaller promoters and venue operators,” Garland said. “As a result, fans pay more in fees, artists have fewer opportunities to play shows, smaller promoters are squeezed out and venues have less real choice in ticketing services. It is time to part ways with Live Nation-Ticketmaster.”

“For decades, New Jersey has long enjoyed a vibrant music scene – from jazz in Newark to rock on the Jersey Shore – and fans and artists alike have suffered under the complex business network that Live Nation has built since purchasing Ticketmaster in 2010. ” Platkin said. “Taking your family to music concerts and introducing your kids to your favorite artists shouldn’t cost thousands of dollars. Today, New Jersey proudly stands with a large group of states on behalf of consumers around the world who are tired of pricing systems that drive up prices and rob them of that experience.”

In a post on its website by Dan Wall, executive vice president of corporate and regulatory affairs, Live Nation strongly rejected the lawsuit.

The company emphasizes:

• The lawsuit will not lower ticket prices or service fees
• The live events market is more competitive than ever. He says that’s why Ticketmaster’s market share has declined since 2010
• The net profits show that Live Nation and Ticketmaster do not have monopoly power
• This lawsuit distracts from real solutions that would lower prices and protect fans – like allowing artists to cap resale prices

“The Department of Justice and a group of state attorneys general have now filed a long-awaited antitrust lawsuit against Live Nation and Ticketmaster,” Wall wrote. “This followed intense political pressure on the Department of Justice to file the lawsuit and a long-term lobbying campaign by rivals and ticket brokers seeking government protection. The complaint – and even more so the press conference announcing it – attempts to paint Live Nation and Ticketmaster as the cause of fan frustration with the live entertainment industry. He blames the high ticket prices on concert organizers and ticketing companies – neither of which controls ticket prices.”

“The world has become a better place because of this merger, not a worse place.”

Live Nation claims to ignore everything that is actually responsible for higher ticket prices, such as rising production costs, artist popularity and 24/7 online ticket scalping, which reveals the public’s willingness to pay much more than the cost of the original tickets.

“Most importantly, Live Nation can and has offered fans, artists, venues and the rest of the performance ecosystem better prices and better services than they would receive if these complementary companies were separated,” Wall continued. “Ticketmaster in particular is a much better, more artist- and fan-focused company under Live Nation than it ever was as a standalone company. But that’s not how the Justice Department sees it. They are reflexively opposed to vertical integration. The Obama administration saw it differently. The merger of Live Nation and Ticketmaster made this possible.”

Live Nation concluded its statement by emphasizing that the merger had a positive impact on the concert promotion ecosystem.

“The world is a better place because of this merger, not a worse place,” Wall said.

Live Nation was scheduled to update the regulations later Thursday.

For more on this developing story, stay with NJBIZ.

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