Analysis of the Live Nation and Ticketmaster antitrust lawsuit

The rumors – well, until yesterday, various multi-source reports in well-informed news outlets – turned out to be true. The U.S. Department of Justice and 30 state and district attorneys general have filed an antitrust lawsuit against Live Nation and Ticketmaster. I Seeks to break up both companies.

The lawsuit alleged that Live Nation “unlawfully exercises its monopoly power,” leaving American music fans “deprived of ticketing innovation and forced to use outdated technology, paying more for tickets than fans in other countries.”

The Justice Department also found that Live Nation-Ticketmaster “exercises its power over performers, venues and independent promoters in a manner that harms competition” and “imposes barriers to competition that restrict the market entry and expansion of its rivals.”

Live Nation-Ticketmaster relationship with facility owner Oak View Group; alleged threats to facilities cooperating with rivals; exclusionary contracts that block these rivals; restricting artists from using facilities if they do not also use promotional services; and takeovers of potential competitors are among the tactics condemned in the lawsuit.

Killer quote from US Attorney General Merrick Garland: “Fans pay more in fees, artists have fewer opportunities to play concerts, smaller promoters are squeezed out, and venues have fewer real choices in ticketing services. It is time to part ways with Live Nation-Ticketmaster.”

Live Nation has been preparing for this day for some time, and the response to the lawsuit came quickly, including a blog post by Vice President of Corporate and Regulatory Affairs Dan Wall.

“It ignores everything that is actually responsible for higher ticket prices, from rising production costs to artist popularity to 24/7 online ticket scalping that reveals audiences’ willingness to pay significantly more than original ticket prices,” Wall wrote.

“It is also absurd to claim that Live Nation and Ticketmaster have monopoly power. The characteristic feature of a monopolist is monopoly profits derived from monopolistic prices. Live Nation does not fit this profile in any way. Ticketmaster’s service fees are no higher than SeatGeek, AXS, or other major ticketing sites, and are often lower.

Wall’s blog post details the debunking of the various allegations in the lawsuit while taking a dig at the current U.S. administration.

“We are yet another victim of this administration’s decision to hand over antitrust enforcement to a populist pressure that simply rejects how antitrust law works. Some call it ‘anti-monopoly,’ but in reality it is simply anti-business,” he wrote, later returning to the topic.

“This is why the government has never been less popular – because it pretends to solve your problems when instead it panders to a narrow set of political interests.”

Needless to say, all of the lobbying organizations funded by the secondary ticketing companies rushed to issue their own statements welcoming the lawsuit as the music industry began to dig into the details of the lawsuit and Live Nation’s counterattack.

And Wall Street? Live Nation’s stock price closed last night at $93.48, down 7.9%, reducing the company’s market capitalization by $1.83 billion to $21.64 billion. Though given context, this is still well above its sub-$16 billion market cap a year ago.

However, we are at the beginning of a very long game. The antitrust lawsuit will run concurrently with ongoing efforts to advance ticketing reform bills to the U.S. Congress.

The House of Representatives recently passed the “Bots Act,” which includes measures focusing on clearer all-in pricing, prohibiting speculative ticket sales, and strengthening enforcement of the existing “BOTS Act” to combat scalping. The related “First Fans Act” is going through its own trial in the Senate.

There is a link between legislative efforts and the antitrust situation. For example, Sen. Amy Klobuchar, a key figure in several ticketing bills in recent years, welcomed the news, writing on Twitter that “The Department of Justice is doing the right thing. It is time to part ways with Live Nation/Ticketmaster.”

Looming over all this, however, is the prospect of a U.S. election later this year that could shake up Congress, but also the Justice Department if it returns to the White House a fickle former president who reportedly has plans for a major, partisan overhaul of the department.

There’s no telling what this would mean for the Live Nation lawsuit (not to mention the recently announced lawsuit against Apple). But the current mix of legal action and legislation is nonetheless a huge moment for the future of the U.S. live music industry – with serious potential consequences around the world as well.