DOJ Files Antitrust Lawsuit to Break Up Live Nation-Ticketmaster; “Baseless” PR stunt, the company responds – update

UPDATE, 07:58 CEST: As expected, the Department of Justice today sued Live Nation-Ticketmaster, alleging that the ticketing and concert events giant stifles competition and raises prices for consumers.

In response, the self-proclaimed “world’s largest live entertainment company” accused the feds of seeking a PR hit over facts about the live music industry.

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The lawsuit, filed in U.S. District Court in Manhattan, also alleges that Live Nation-Ticketmaster, among other things, penalized venues that used more than one ticket taker, made it difficult for performers to access venues and bought out competitors. Joined by dozens of state attorneys general, the lawsuit seeks to break up the long-merged company.

READ DOJ’S ANTI-MONOLOR LAWSUIT AGAINST LIVE NATION HERE

In a statement, Attorney General Merrick Garland said: “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. As a result, fans pay more in fees, artists have fewer opportunities to play shows, smaller promoters are squeezed out, and venues have fewer real choices in ticketing services. It is time to part ways with Live Nation-Ticketmaster.”

“When companies like Live Nation control every aspect of an event, it creates bad blood – concertgoers and sports fans suffer and are forced to pay cruel prices,” New York Attorney General Letitia James said in her own statement.

No one mentioned the name ‘Taylor Swift’ – The ticket crash that kicked off the superstar’s Eras tour last year and left millions of Swifts screaming at their screens has sparked a new round of scrutiny among lawmakers on Capitol Hill. The Department of Justice was already said to be investigating the company because Live Nation-Ticketmaster operates under a consent decree resulting from its 2010 merger.

Photo: Mat Hayward/TAS23/Getty Images for TAS Rights Management)

In the lawsuit, Justice Department lawyers wrote: “Live Nation is wholly owned by the company
the Ticketmaster subsidiary used this power and influence to take center stage
and the edges of virtually every aspect of the live music ecosystem. This gave Live Nation
and Ticketmaster’s ability to freeze innovation and sway the industry to its own advantage.
While this may be a boon to Live Nation’s bottom line, it comes at a real cost to Americans.”

The Department of Justice alleged that Live Nation-Ticketmaster created a “self-reinforcing ‘flywheel’ that
it is used “to connect multiple interrelated businesses and interests.”

Justice Department lawyers cited, among other things, threats of retaliation against the company unless it stopped the subsidiary from trying to gain a “foothold in the U.S. concert promotion market.”

“Live Nation-Ticketmaster’s power to promote concerts means that every concert venue knows that choosing another promoter or ticket seller carries the risk of a negative reaction from Live Nation-Ticketmaster that could result in the loss of concerts, revenue and fans.” – we read in the lawsuit. he stated.

The government also alleged that the company restricted artists’ access to venues unless they also agreed to use its promotional services. The complaint also cited Oak View Group, a potential competitor, which Justice Department lawyers wrote “avoided bidding against Live Nation to acquire artist talent and influenced sports venues to sign exclusive contracts with Ticketmaster.”

Claiming that the Justice Department’s actions will not help reduce high ticket prices and that it does not have a monopoly, Live Nation, which merged with Ticketmaster in 2010, called the long-awaited lawsuit “without merit.”

“The Department of Justice’s lawsuit will not solve fans’ ongoing concerns about ticket prices, service fees and access to in-demand programming,” a company spokesperson told Deadline this morning.

“Calling Ticketmaster a monopoly may be a PR victory for the Justice Department in the short term, but it will lose in court because it ignores basic principles of the live entertainment economy, such as the fact that most service fees go to venues and that competition continually erodes market share and Ticketmaster’s profit margin,” Live Nation added. “Our growth comes from helping artists tour the world, create lasting memories for millions of fans and support local economies across the country by maintaining high-quality jobs. We will defend ourselves against these baseless allegations, use this opportunity to shine a light on the industry, and continue to push for reforms that truly protect consumers and artists.”

The lawsuit addressed long-standing frustration with Ticketmaster fees, calling them the “Ticketmaster tax” and noting that “every fan who has logged on to the Ticketmaster website to purchase a concert ticket knows the feeling of shock and frustration as the base cost of a ticket increases dramatically with the addition of fees,” including such as service fees and processing fees.

EARLIER AT 05:30 PT: The Justice Department is expected to file a lawsuit today against Live Nation-Ticketmaster, alleging that the live events and ticketing company illegally suppressed competition.

On Wednesday evening, multiple media outlets reported that the Justice Department and several states would consider solutions, including splitting the company.

The lawsuit – which has been rumored for weeks – will be the latest action taken by the Biden administration to curb corporate power. The Department of Justice sued Apple in March, maintaining that the company had a monopoly in the smartphone market.

Live Nation and Ticketmaster have long been in the crosshairs of the Justice Department.

Live Nation is subject to a consent decree issued in its 2010 merger with Ticketmaster, implemented as part of a settlement with the Department of Justice.

The consent decree was extended in 2019 for an additional 5 1/2 years after the Justice Department found that Live Nation violated restrictions imposed on the merger, which included its ticketing, promotion, concert and management businesses. Among other things, the terms prohibit Live Nation from threatening to suspend concerts at a given venue if it chooses another ticketing company.

Last year, the company faced hours of criticism and brutal attacks from lawmakers during a Senate hearing on its ticketing industry practices. This comes after an incident where the Ticketmaster website crashed due to excessive demand for Taylor Swift concert tickets. During the hearing, Joe Berchtold, president and chief financial officer, faced criticism from lawmakers of both parties. Berchtold, however, said the ticket price is set by the artist and in most cases the fee is controlled by the concert hall.

Sen. Amy Klobuchar (D-MN), who chairs the Senate Judiciary subcommittee on antitrust, said in a statement: “If the reports are accurate, the Department of Justice is doing the right thing by filing a lawsuit against Live Nation. “It’s about ensuring fair treatment for fans around the world and reinvigorating competition in ticketing markets.”

Dan Wall, executive vice president of corporate and regulatory affairs at the company, wrote in March that “the real explanations for high ticket prices are well understood and have little to do with Live Nation or Ticketmaster. They start with the economic conditions that explain most prices: supply and demand. His essay addressed the ongoing attacks on the company on Capitol Hill, suggesting that lawmakers have advanced the idea that “supposed ‘monopolies’ are responsible for high ticket prices.”

“Rhetorically it’s understandable because if you want to anger fans against Live Nation and Ticketmaster, there’s no better way than to blame them for something you know the fans don’t like,” he wrote.

Bloomberg News first reported the plans to sue.

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