Battle Lines: DOJ, Live Nation Stake Their Positions

The Justice Department made it clear that its case against Live Nation and Ticketmaster isn’t just because people are annoyed by ticketing. Being annoying isn’t a crime, nor is charging high prices for scarce products. Still, it’s clear from both the complaint filed May 23 in a New York federal court and from the Justice Department’s own statements that ticket prices — and irritation with the ticket buying process — is certainly what’s whet the appetite for destruction. 

“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,” wrote 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.”

It’s not exactly clear how or why an independent Ticketmaster would result in lower prices for fans. For example, Ticketmaster’s revenues certainly allow Live Nation to be aggressive in purchasing content with higher artist guarantees. Not being able to use ticketing revenue to buttress that business may result in the company trying to claw back to a lower guarantee, but that just means agents ask for higher ticket prices to guarantee the same bottom line on a smaller cut. Venues relying on Ticketmaster’s advances may instead charge higher rent to get back that lost revenue. A spun-off Ticketmaster may result in no change to ticket prices, just a different distribution of the same dollar.

In any event, the DOJ doesn’t have to make the lower-price case at trial, though it can and will in the court of public opinion. Live Nation has made it clear it intends to fight in both venues. 

Live Nation’s man in the arena is Dan Wall, Executive Vice President, Corporate and Regulatory Affairs. Wall joined the company in February 2023 after 24 years at law firm Latham & Watkins (Latham will represent Live Nation in the antitrust suit along with New York-based white-shoe firm Cravath, Swaine & Moore). Wall is the perfect man for his role: he was considered the country’s leading antitrust lawyer in his nearly quarter-century at Latham and prior to that had been an attorney in the DOJ’s antitrust division.

His thorough and often blistering response made it clear Live Nation intended to proactively blunt the feds’ arguments and the significant first-mover advantage of a plaintiff.

A complaint is just that: a place to lay out allegations. There’s often limited proof offered (and in this case there didn’t appear to be much of a smoking gun); but that’s what a trial is for. Still, the filing establishes the ground on which the battle will be joined and Wall was born for a storm.

Wall’s treatise begins with broad skewering of the DOJ’s theories. He refutes accusations of monopoly power (which requires the ability to price to achieve monopoly profits), as Live Nation’s net profit margin last year of 1.4% ranked near the bottom of its S&P 500 peers. He unfavorably contrasts the Biden Administration’s position on antitrust matters with the Obama Administration’s, which approved the merger in the first place.

“We are another casualty of this Administration’s decision to turn over antitrust enforcement to a populist urge that simply rejects how antitrust law works. Some call this ‘Anti-Monopoly,’ but in reality it is just anti-business,” he wrote. “A central tenet of this worldview is that antitrust should target companies that have grown large enough that in some nebulous way they ‘dominate’ markets—even if they attained their size through success in the marketplace, not practices that harm consumers.”

At root, Wall writes, is opposition to vertical integration, the keystone principle of Live Nation’s business strategy, and one he casts as pro-competitive, citing both the dense treatise “Antitrust Law: An Analysis of Antitrust Principles and Their Application” by Phillip E. Areeda and Herbert Hovenkamp and the words of Obama Administration antitrust division attorneys. Most people aren’t terribly familiar with 14-volume legal studies or an obscure 14-year-old legal filing — nor do they really want to be — but Wall’s sharp references to both show he’s willing to fight the DOJ on elevated ground, bringing the dispute out of the pained-Taylor-Swift-lyric-pun morass LN’s fight for public opinion has had to endure since November 2022.

From the opening salvo, Wall pivots to the particulars, jabbing at the parade of horribles in the complaint. First, Wall says, Oak View Group (Pollstar‘s parent company) was never going to compete with Live Nation as a concert promoter, as it’s a venue developer and manager, which was the point being made in numerous e-mail exchanges the DOJ cited, which, Wall says, without context are easy to construe as conspiratorial or collusive. 

There’s no truth, Wall argues, in the DOJ’s claim that Live Nation tried to force Silver Lake to sell its stake in Australian promoter TEG. Instead, Wall argues Rapino was just pointing out the dangers of Silver Lake owning a stake in both TEG and OVG, which had developed the aforementioned relationship with LN. There is a broad concern — including from DOJ officials — about private equity firms like Silver Lake “rolling up” interests in companies competing in similar market sectors. 

Ticketing contract exclusivity, he says, is the industry standard. Because ticketing systems are complex, venues prefer to use a single product rather than maintaining multiple redundant systems. It also provides venues with upfront cash, no matter the ticketing company.

Wall denies that Live Nation has engaged in “serial promoter acquisition” over the last decade, as the DOJ alleges. Instead, he says, the focus has been on sectors of the market where they’d previously had no meaningful presence, such as festivals.

Nor is Live Nation’s practice of routing tours to its own amphitheaters unlawful, as the Supreme Court has repeatedly ruled that no business has a duty to deal with competitors.

Perhaps the most damning allegation in the DOJ’s complaint regards New York’s Barclays Center. When that building opened and signed a ticketing deal with SeatGeek, it threatened Live Nation with a lawsuit, alleging retaliatory routing. But, Wall says, under the terms of the consent decree, LN was “scrupulously careful about documenting the business reasons why literally every show in the NY area over the relevant period went to the venue it wound up at,” records it turned over to the Justice Department-appointed monitor. In any event, Barclays did eventually become a Ticketmaster venue, because “SeatGeek’s technology and service were not up to the task of servicing major onsales, resulting in Barclays firing SeatGeek.”

The thorough countercharge Wall unleashed is a savvy PR move. Live Nation is, frankly, not widely beloved by the public at-large and political grenades tossed its way come with the territory. With the debunking effort, it makes the case easy to cast as just another instance of political point-scoring.

Eventually — and if past antitrust suits are any indication, “eventually” may be a mighty long time — the case will head to court and there the feds will have to lay all their evidentiary cards on the table and Wall is already making the case they’re drawing to an inside straight.