Err...they're not evil, just a money grubbing monopoly.
Are your a gentile or do you like paying retail?
Justice Department Sues to Break Up Live Nation-Ticketmaster
Antitrust enforcers allege the nation’s largest concert promotion and ticketing company abused monopoly and drove up prices for tickets
By Dave Michaels and Anne Steele, WSJ
Updated May 23, 2024 5:03 pm ET
The Justice Department’s suit against Live Nation LYV -7.81%decrease; red down pointing triangle tees up a legal battle more than a decade in the making, one that could redistribute power in the live-events business and change how consumers buy tickets to concerts and sporting events.
The lawsuit, joined by more than two dozen states and filed in a New York federal court, alleges Live Nation used its power to squelch competition and retaliate against promoters and venues that threatened its dominance. The company chokes off competition in key pillars of the concert system, driving prices and fees higher for fans, the department said. “It is time to break up Live Nation,” Attorney General Merrick Garland said.
Live Nation said Thursday that it doesn’t have a monopoly in ticketing or promotion and will fight the government’s case. The company said its subsidiary Ticketmaster doesn’t set prices, artists and teams do, and they are subject to high demand and low supply, while the majority of fees go to venues. Live Nation’s shares declined 7.8% to $93.48 on Thursday.
With Thursday’s suit, a Justice Department that is committed to bolder antitrust enforcement gave up on its earlier approach to the live-events marketplace. The Justice Department had concerns about Live Nation’s merger with Ticketmaster in 2010 but declined to challenge it, saying it didn’t think it would win in court.
Fourteen years later, the department says it is armed with more information about how Live Nation operates—and that supports calling it an illegal monopoly. Department officials didn’t spell out Thursday how they want the company to be broken up, but analysts expect it would seek to separate Live Nation’s concert-promotion business from Ticketmaster.
The government faces a high legal bar in breaking up companies. It will have to convince a court not only that Live Nation has violated bedrock antitrust rules, but also that the violations are so pervasive that less drastic legal remedies wouldn’t fix the alleged harms to competition.
“They told a pretty good story that appeals to the public at large, but that doesn’t mean there is an antitrust violation here,” said Craig Waldman, an antitrust partner at Jones Day. “It’s going to come down to the evidence of what they did to kneecap the competition, the quality of evidence of that kind of coercive behavior.”
If the government prevails, officials said, U.S. consumers could in the future pay lower prices because a broader range of companies could offer tickets to shows. That added competition could drive down the fees that Ticketmaster adds to the price of seeing a show, the Justice Department said.
Live Nation said the department “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 has faced accusations of sky-high ticket fees, flawed customer service and anticompetitive practices from lawmakers, regulators and state attorneys general. The company wields commercial advantages that most of its competitors lack. Live Nation has a roughly 50% market share in concert promotion, while Ticketmaster controls more than 80% of the market for primary ticket sales in the biggest venues in the U.S.
Fans of Taylor Swift in Stockholm. After Ticketmaster crashed in 2022 during a fan presale of Swift’s Eras tour, the Justice Department probe of Live Nation gained momentum. PHOTO: JOEL LINDHE/ZUMA PRESS
Coloradan Jim Ronk took his family to see the Denver Broncos play the Las Vegas Raiders last year. He says $240 in fees for his four tickets put his total around $1,300. “There’s a difference between what I’m willing to pay for professional football tickets and these processing fees,” said Ronk, 76 years old.
When Rolling Stones tickets went on sale for their tour that lands in Denver next month, Ronk, a fan, didn’t even look. “I just don’t want to pay those exorbitant ticket fees.”
Gary Witt, the CEO and co-owner of the Pabst Theater Group in Milwaukee, said some tours don’t come through his city because Live Nation promotes them and doesn’t have a venue there. Pabst’s venues don’t use Ticketmaster, he said.
“This is about more than, ‘I hate Ticketmaster’ or ‘I hate ticket fees,’” Witt said. “This is a ticketing company that merged with a promotion company who also happens to own the largest artist-management firm in America.”
The plaintiffs include several states, such as Oklahoma and Tennessee, where Republicans oversee antitrust and consumer protection efforts. The case adds to the growing movement to revive the use of antimonopoly laws, which date to 1890, to challenge dominant companies. Google-owner Alphabet, Apple, Amazon and Meta all face similar cases that were filed since 2019.
“There has been growing concern about consolidation,” said Sen. Amy Klobuchar (D., Minn.), who chairs the Senate subcommittee overseeing antitrust. Live Nation “is the center of the ecosystem when it comes to fees and prices.”
The Justice Department’s court complaint paints a picture of Live Nation as running an interconnected web of businesses that are dominant individually but also “work together across the ecosystem” to eliminate rivals and raise barriers to entry.
The government is seeking a jury trial, an uncommon gambit in antitrust cases that are usually decided by judges. That may allow the Justice Department to tell a stirring story that resonates with jurors who aren’t experts in the complex world of antitrust law.
Among the practices the department challenges are long-term ticketing contracts that Ticketmaster has with venues where high-profile acts perform. Those agreements typically run between three and five years, and Ticketmaster often gives lucrative financial advances that entice the venues to sign up for long-term deals.
Live Nation also prevents rival promoters from booking the venues that it owns or operates, which constrains supply, putting more pressure on prices, the government said. Live Nation owns or operates some 370 venues or festival sites globally, allowing it to route the tours it promotes through its own buildings.
Such pacts block venues from using multiple ticketing services, which the government says would compete by offering better prices, fees, quality and innovation to fans.
While the suit could protect consumers by going after ticketing fees, it’s unclear how it will actually help fans who want access to affordable tickets, said Bill Werde, director of Syracuse University’s music business program.
For the hottest tours, there are exponentially more fans who want tickets than there are seats, he said. “If the Justice Department or anyone else actually cares about ticket prices, I fail to see where this suit is going to meaningfully affect those dynamics,” Werde said.
A Justice Department settlement in 2010 that originally allowed the Live Nation-Ticketmaster merger tried to inject competition into ticketing by allowing a competitor to license Ticketmaster’s technology. Anschutz Entertainment Group entered the ticketing business but never wrestled much market share away from Ticketmaster. A revision of the settlement in 2020 prohibited Live Nation from retaliation against venues that didn’t use Ticketmaster.
Gene Kimmelman, an attorney who was a senior Justice Department official on the 2010 case, said the new complaint shows that earlier, lighter-touch efforts to constrain Live Nation and Ticketmaster didn’t work. That should fortify the government’s new case, he said.
“It’s very compelling what the government found here—the mutually reinforcing, anticompetitive behavior that blocks entry and expansion of competition across the entire ticketing ecosystem,” he said.
Write to Dave Michaels at dave.michaels@wsj.com and Anne Steele at anne.steele@wsj.com.
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