Sports fans are involved in the Justice Department’s antitrust case against Live Nation

The U.S. Department of Justice, 29 states and the District of Columbia sued Live Nation and its subsidiary Ticketmaster on Thursday in the Southern District of New York, accusing the companies of having monopoly power to thwart competition in ticket sales. The government is seeking to separate Live Nation from Ticketmaster, which was a competitor until it merged with Live Nation in 2010.

While most of the allegations involve the concert business, the sports ticket market plays a role in the antitrust case.

Most of the alleged violations concern tickets and facilities in the entertainment industry, particularly the way concertgoers purchase tickets and pay incidental fees. The Justice Department accuses Live Nation and Ticketmaster of using what it portrays as monopoly market power. According to the Department of Justice, the company holds this power to deny the rise of potential competitors; win over rivals before they become a real threat; cause venues to lose “concerts, revenue and fans” if they do not choose Live Nation and Ticketmaster as their promotional and ticketing services; and force venues to sign long-term exclusive contracts that cut ties with rivals.

The sports industry and the rights of sports fans come to light mainly when the Department of Justice portrays Live Nation and Ticketmaster as exercising excessive control and having conflicts of interest as “promoter, ticket seller, venue owner and artist manager.”

At this point, the Justice Department views sports teams’ season ticket policies as key to understanding Live Nation’s “tentacles” in the mainstream ticketing market. In this market, Live Nation allegedly harms “artists, venues and fans” by stifling competition.

The Department of Justice emphasizes that primary ticket sellers for major concert venues often “must provide support for the distribution of band season tickets” when the venue also hosts sporting events. In other words, live concert ticket sales are tied to game ticket sales.

How Sportico As explained Monday, the Justice Department has previously raised concerns about Ticketmaster’s role and game ticket sales, given that venues are expected to combine tickets for sporting events and concerts. This is not an isolated phenomenon; in 2010, the Department of Justice found that 66 major concert halls hosted professional bands, including those that sell season tickets.

In Thursday’s complaint, Live Nation was described through Ticketmaster as a monopoly on basic ticketing services for major concert venues. In 2022, Ticketmaster allegedly accounted for “at least 70% of the total face value of all tickets sold in major arenas and amphitheaters,” with no competitor’s ticket sales exceeding 14%. The Department of Justice says Live Nation uses this authority to “threaten and retaliate” against venues that do not agree to its terms.

The Department of Justice claims that this alleged conduct violates Art. 2 of the Sherman Act. This provision prohibits illegal monopolies, and the Justice Department argues that Live Nation threatens to divert live music performances to other venues, delay secondary ticket sales and refuse to advertise performances when the venue uses a competing ticketing system.

The complaint also includes other allegations of illegal activity, including exclusive trading. There are 27 claims in total, most of which are brought by states under their antitrust laws. A jury trial was sought, monetary damages and an injunction sought.

The sports industry and fans who enjoy going to games could have a significant stake in the outcome of this case. The Department of Justice suggests that if this happens, ticket sales will become more competitive, leading to lower prices, lower fees and better customer service.

However, the Justice Department’s arguments will be vigorously disputed by Live Nation’s lawyers. As part of its legal defense announcement, Live Nation released a statement on Thursday criticizing the complaint as betraying basic logic and ignoring economic realities. The company argues that the Justice Department could gain “PR” by calling Ticketmaster a monopoly, but empirical evidence shows that “most service fees go to venues” and that “competition continues to erode Ticketmaster’s market share and profits.”

The facts presented by Live Nation suggest that if the Justice Department prevails, consumers, artists and sports venues would win worse off. Entertainment services – including sports – would be transformed by the court in a way that could prove haphazard and inconsistent with the market.

The case is expected to drag on for years unless a settlement is reached.