DOJ Seeks Live Nation, Ticketmaster Break-Up In Antitrust Suit

Fourteen years after the merger that changed the live industry, the United States government is seeking to break-up Live Nation and Ticketmaster.

In a lawsuit filed in New York by the Department of Justice and the attorneys-general of dozens of states and the District of Columbia, Live Nation is accused of using its market dominance to restrain competition and harm consumers.

“We allege that Live Nation relies on unlawful, anticompetitive conduct to exercise its monopolistic control over the live events industry in the United States at the cost of fans, artists, smaller promoters and venue operators,” said Attorney General Merrick B. Garland in a statement. “The result is that fans pay more in fees, artists have fewer opportunities to play concerts, smaller promoters get squeezed out, and venues have fewer real choices for ticketing services. It is time to break up Live Nation-Ticketmaster.”

In a press conference, Garland emphasized that the reason for the suit wasn’t the mere fact that people are annoyed by Ticketmaster — the latest round of attention on the Ticketmaster/Live Nation merger came after the frustrating Nov. 2022 on-sale for Taylor Swift’s “Eras Tour,” which prompted much media sturm und drang and Congressional hearings.

“We’re here not because Ticketmaster’s conduct is inconvenient or frustrating … we’re here because it’s illegal,” Garland said.

If the DOJ is successful and Ticketmaster is spun back out from Live Nation, it would represent the most significant change in the live entertainment industry since the merger at question itself. For its part, Live Nation says nothing in the suit will “solve the issues fans care about relating to ticket prices, service fees, and access to in-demand shows.”

“Calling Ticketmaster a monopoly may be a PR win for the DOJ in the short term, but it will lose in court because it ignores the basic economics of live entertainment, such as the fact that the bulk of service fees go to venues, and that competition has steadily eroded Ticketmaster’s market share and profit margin,” Live Nation said in a statement. “Our growth comes from helping artists tour globally, creating lasting memories for millions of fans, and supporting local economies across the country by sustaining quality jobs. We will defend against these baseless allegations, use this opportunity to shed light on the industry, and continue to push for reforms that truly protect consumers and artists.”

Bill Werde, director of Syracuse University’s Bandier Recording and Entertainment Industries Program, says he’s uncertain how the lawsuit and its proposed remedies would benefit consumers.

“It is undeniable that Live Nation is a behemoth in the live entertainment space. If you look at the total revenue numbers, Live Nation is literally 10 times bigger than its next closest competitors in AEG Live and CTS Eventim. It remains unclear to me, though, how the Justice Department suit will actually help fans, who care about one thing and one thing only: access to affordable concert tickets,” he says. “On one hand, artists today have a very strong, clear ability to set and control concert tickets — an ability that most artists choose not to exercise. And at the same time, the concert business and fans have a fundamental supply and demand problem. Simply, for hot tours, there are exponentially more fans who want tickets than there are seats.”

The suit attacks Live Nation’s “flywheel” strategy as reinforcing its market position and driving out competitors.

“Live Nation-Ticketmaster’s self-reinforcing business model … captures fees and revenue from concert fans and sponsorship, uses that revenue to lock up artists to exclusive promotion deals, and then uses its powerful cache of live content to sign venues into long term exclusive ticketing deals, thereby starting the cycle all over again,” the DOJ said in a press release.

Specifically, the suit alleges a variety of tactics the DOJ says are used to “eliminate competition and monopolize markets.” Among them, Live Nation’s relationship with Oak View Group (Pollstar‘s parent company), which the Justice Department says “avoided bidding against Live Nation for artist talent and influenced venues to sign exclusive agreements with Ticketmaster.”

The suit also claims Live Nation used its influence to stymie TEG’s attempts to expand its promotion business into the United States. According to the suit, Live Nation attempted to prevent TEG from using StubHub as a ticketer for a concert at the Los Angeles Memorial Coliseum by refusing to honor any seats sold through StubHub.

The DOJ, without citing specific examples, also alleges Live Nation threatens — usually implicitly, though, the suit claims, sometimes more directly — venues that if they don’t use Ticketmaster, they will not get the promoter’s top tours. And, the suit claims, it works the other way: if an artist refuses to use Live Nation as a promoter, they can expect to be denied a spot at a Live Nation- owned venue.

In its statement, Live Nation pointed out that Live Nation and Ticketmaster’s 1.4% annual net profits are “the opposite of monopoly power;” that there is more live industry marketplace competition than ever; that “Ticketmaster’s market share has declined since 2010;” and that the DOJ lawsuit ignores real solutions to “decrease prices and protect fans – like letting artists cap resale prices.”

Dan Wall, Live Nation’s Executive Vice President, Corporate and Regulatory Affairs, posted a point-by-point rebuttal of the Department of Justice’s allegations on the company’s website.

The lawsuit followed an appearance at this week’s J.P. Morgan Global Technology, Media and Communications conference by LN’s President and CEO Joe Berchtold who said meetings between the company’s top executives and leading Justice Department officials are ongoing.

The DOJ opened an antitrust investigation of Live Nation in November 2022 and the Wall Street Journal reported in April that a lawsuit was imminent.

Still, Berchtold believes the DOJ has “an open mind.”

“We wouldn’t get to this point if they didn’t have concerns, but the good news is we’re still talking and they’ve said they have an open mind,” he said at the conference. “So without getting into the real details of the conversation, I think it’s fair to say I continue to believe that we fundamentally have business practices that are fully defensible. But we’re also open to figuring out common ground in order to get this settled and moved on. But we don’t know exactly what they want at this point still.”

Berchtold’s statement echoes what he told investors during the company’s quarterly earnings call May 2, when said discussions between senior officials at the company and DOJ indicated the feds were in the “final phase” of the investigation. On that call, Berchtold acknowledged “competitors and interest groups” were pushing the DOJ to break-up Live Nation and Ticketmaster, but that he didn’t believe that was a legally available remedy as the Justice Department “repeatedly stated in court filings that the merger and settlement were in the public interest.”

“The DOJ’s investigation appears to be focused on specific business practices, not the legality of Live Nation-Ticketmaster merger or our overall business structure. Very little of the conduct that DOJ has raised with us relates to the combination of ticketing and promotion resulting from the merger,” he said.

Live Nation entered into a consent decree with the federal government in 2010, following the 2009 merger between LN and Ticketmaster. That consent decree was amended in 2020 and is set to expire at the end of 2025. 

In January 2020, the Justice Department filed a memorandum stating that Live Nation was “retaliating against concert venues for using another ticketing company, or conditioning or threatening to condition Live Nation’s provision of concerts and other live events on a venue’s purchase of Ticketmaster’s ticketing service … Specifically, Defendants have repeatedly conditioned and threatened to condition Live Nation’s provision of live concerts on a venue’s purchase of Ticketmaster ticketing services, and they have retaliated against venues that opted to use competing ticketing services – all in violation of the plain language of the decree. Indeed, Defendants’ well-earned reputation for threatening behavior and retaliation in violation of the Final Judgment has so permeated the industry that venues are afraid to leave Ticketmaster lest they risk losing Live Nation concerts, hindering effective competition for primary ticketing services.”

Despite the strong words, citing findings dating back to the early days of the consent decree, no antitrust actions were filed at that time.