Live Nation Entertainment, the parent company of Ticketmaster, has been slapped with an antitrust lawsuit by the US Department of Justice. The lawsuit, supported by a bipartisan group of state and district attorneys-general, claims that Live Nation Entertainment runs a monopoly that stifles its rivals in the live entertainment sector. The suit was lodged on Thursday, marking a landmark case in antitrust law.
The claim argues that the company wields substantial influence over most concert venues in America using exclusionary tactics, as it reigns supreme in the ticketing and concert promoting market. It details how the company is alleged to have clinched an iron grip on the live entertainment scene, starting from what artists earn to the staging of performances throughout America.
The attorney-general, Merrick Garland, pointed out on Thursday that the result is increased fan fees, fewer gig opportunities for artists, smaller promoters being pushed out and fewer genuine choices of ticketing services for venues. Garland bluntly expressed it’s time to dismantle Live Nation-Ticketmaster.
Live Nation Entertainment was established in 2010 following the merger of Live Nation, a concert promoting firm, and Ticketmaster, an entity selling tickets for live events. However, over time, this has lead to disgruntlement from fans, artists, rivals and US legislators. They allege the company has been exploiting its commanding market position to impose hefty fees and to backlash against event spaces which opt to collaborate with competitors.
The irritation grew after the company poorly managed the ticket sales for Taylor Swift’s 2022 Eras Tour, which saw Ticketmaster’s website overwhelmed by a surge in demand. The lawsuit was filed in the common interest of fans, artists, independent promoters, venues and the general public, according to a press conference littered with music references by Garland.
Garland referenced Swift’s Reputation album, stating the lawsuit has received widespread support, as “the American people have had enough”. The claim also outlines what Live Nation Entertainment calls its ‘flywheel’ business model – it funnels revenues generated from sponsors and concert fees towards cinching exclusive deals with artists. Evidence given by the DoJ also pointed out the company’s attempts to eliminate competition through acquiring competitors.
Jonathan Kanter, the chief of the Department of Justice’s antitrust division, expressed his concerns regarding the ‘assumed Ticketmaster tax’ on Thursday. This consists of constant fees euphemistically referred to as ‘service’ or ‘convenience’ charges, which according to Kanter are quite the opposite. He claimed that the live music scene in the US is in a state of disrepair due to the ‘unlawful monopoly’ of the company.
Reacting to these assertions, the executive vice president of corporate and regulatory affairs at Live Nation Entertainment, Dan Wall, defended his organisation. He dismissed the Department of Justice’s claims as ludicrous, insisting that Live Nation and Ticketmaster do not hold monopoly power. Wall argued that the lawsuit overlooks the real reasons for the hike in ticket prices, which include ballooning production costs, artist popularity, and relentless online ticket reselling that highlights the consumers’ readiness to pay significantly more than the initial ticket price. He expressed that competition in the industry motivates Live Nation to lower their rates annually in terms of both concert promotion and ticket sales.
However, as per the DoJ, Live Nation directly supervises over 400 music artists, and owns or has control over more than 60 of the top 100 amphitheatres in the US. The organisation, via Ticketmaster, administers approximately 80% of the primary ticketing of top concert venues, said the prosecutors.
The DoJ had previously validated the merger of Ticketmaster and Live Nation, on the condition of a 10-year settlement agreement. This included provisions that prevented any retribution against venues that opted for alternative ticketing or promotional services. However, this arrangement was altered and prolonged in 2019 as the DoJ claimed that it had been recurrently breached.
Wall further suggested that their group was another victim of the current administration’s resolve to succumb to a populist drive that contradicts the workings of antitrust law.
This recent dispute is one of many high-profile monopoly cases tackled by the DoJ’s antitrust unit. Under Kanter’s direction, the department now has a more stringent enforcement approach. He forms part of a new wave of progressive officials appointed by President Joe Biden who believe that anti-competitive behaviour has significantly increased in the US economy due to years of lenient enforcement. The Department has initiated lawsuits against US corporate giants that include Google and Apple.
Fred Rosen, former CEO of Ticketmaster before its sale to Live Nation, stated his belief that the ongoing battle against the company does little to solve the actual problem at hand: expensive tickets.
“Even if Live Nation is dismantled, it wouldn’t alter the methods of Ticketmaster. The firm would carry on at all aspects,” he commented. – Copyright of The Financial Times.