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Update: DOJ Proposes To ‘Significantly Modify’ Consent Decree With Live Nation, Ticketmaster
– Live Nation Logo 2017
Update: The Department of Justice has stated it will file a petition to extend the consent decree that allowed the merger of Ticketmaster and Live Nation for five and a half years with significant changes, and that Live Nation will pay costs and fees for taxpayer enforcement and a penalty of $1 million for each violation, of which the DOJ found several.
In what it is calling the most significant enforcement action of an antitrust decree in 20 years, the DOJ says it is moving forward in a procedure to modify the terms of the existing consent decree to include provisions preventing Live Nation from threatening venues considering alternative ticketing services to Ticketmaster, to clearly identify threats and retaliations against venues as violations of the decree, to appoint an independent monitor (and a Live Nation compliance officer) to investigate Live Nation’s compliance, and to provide notice to customers of the changes to the decree. The DOJ is also seeking the $1 million penalty for each violation of the consent decree and coverage of the DOJ’s costs and fees for investigation and enforcement.
“When Live Nation and Ticketmaster merged in 2010, the Department of Justice and the federal court imposed conditions on the company in order to preserve and promote ticketing competition,” Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division said in a statement. “Today’s enforcement action including the addition of language on retaliation and conditioning will ensure that American consumers get the benefit of the bargain that the United States and Live Nation agreed to in 2010. Merging parties will be held to their promises and the Department will not tolerate transgressions that hurt the American consumer.”
The full statement is available here.
Original story: Nearly 10 years after its merger with Ticketmaster, Live Nation confirmed that it has reached an agreement in principle with the U.S. Department Of Justice to “extend and clarify” the consent decree allowing the merger between Ticketmaster and Live Nation.
The 10-year consent decree set terms for the merger between TM and LN to take place in 2010 and was set to expire in 2020. Billboard is reporting that the consent decree has been extended into 2025 and the agreement settles an investigation by assistant attorney general Makan Delrahim.
Within 30 minutes of the news breaking, Live Nation’s stock price jumped from $60.00 to $70.25.
The consent decree was a recurring item in headlines in 2019 as Senators Richard Blumenthal (D-NJ) and Amy Klobuchar (D-MN) asked the DOJ to launch an antitrust investigation into ticketing in August.
Delrahim previously told Sen. Blumenthal in a September meeting of the Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights, “We have been examining allegations of violations, beyond that I can’t comment about what we are finding or intend to do, but we heard you loud and clear in your letter.
“One of the challenges that I fixed when I arrived, all of our consent decrees since I’ve been confirmed include provisions that allow parties to include a lower standard for review. The organic standard for the violation of a consent decree – which is probably why we haven’t seen enforcement of consent decrees, or too many of them – is a term has to be clearly unambiguous and you have to prove it in a court by clear and unconvincing standard. I don’t need to tell you how difficult of a standard that is. And that is the standard we are living with.” Delrahim then agreed that the merger conditions had been largely ineffective and there was a need for further review.
Earlier this week, in response to reports that the DOJ was preparing legal action against Live Nation because of numerous reported violations of the consent decree, Sen. Klobuchar wrote: “Americans purchase millions of tickets each year and shouldn’t be forced to pay sky-high prices because of unchecked consolidation in a broken ticketing industry. I’ve called for accountability and I’m glad it’s happening.”
Live Nation CEO and president Michael Rapino told the Goldman Sachs Communacopia conference in September there was a lot of misconception around the consent decree. “I negotiated it and it’s very simple: It says we can’t threaten venues,” Variety reported Rapino saying at the September event. “We can’t say to a Ticketmaster venue that says they want to use a different ticketing platform, ‘If you do that, we won’t put shows in your building.’ It also says we can do what’s right for our business, so we have to put the show where we make the most economics, and maybe that venue [that wants to use a different ticketing platform] won’t be the best economic place anymore because we don’t hold the revenue.
“Now, we’re eight-plus years into the decree, and with 30,000 shows a year and 30,000 employees, you can imagine all the emails flying around. Every now and then one of our competitors runs to the DOJ and says ‘We lost the Kansas City venue, [Ticketmaster] threatened!’ We get an inquiry from the DOJ, ‘Hey, can we get some emails from over the years,’ they’ve done it and we’ve never found anything wrong. We’re very compliant, we understand it clearly — trust me, after eight years and all those emails, if you weren’t compliant, with your competitors playing that game, you’d have been exposed as being in violation long ago.”
The merger of Ticketmaster and Live Nation created a titan in the live entertainment business the likes of which has never been seen, and the companies have faced all kinds of public criticism, complaints and occasional legislative efforts since the event. The BOSS Act, essentially a reworking of a bill that has failed to gain passage since its initial submission in 2009, was introduced by Blumenthal and Reps. Bill Pascrell and Frank Pallone in June attempting to bring “transparency” to ticketing.