“Time to Disband Live Nation-Ticketmaster”: Justice Department Sues Concert Ticket Giant

The Justice Department and 30 state and district attorneys general across the country filed a federal lawsuit Thursday against Live Nation Entertainment and its wholly-owned subsidiary Ticketmaster. The suit alleges that Live Nation created a monopoly on ticket prices for live events in the United States. The civil antitrust suit was filed in the Southern District of New York.

This fight has been going on for a long time: music fans and other consumers, artists, independent venues and even members of Congress have argued that Ticketmaster, which merged with Live Nation in 2010, artificially inflated prices. ticket prices. Live Nation has long been a dominant player in the live events market, with substantial stakes in venues, concert promotion, music festivals, ticketing, sponsorship, advertising and artist management – ​​owning so much power in many aspects of the company, the Justice Department claims that it is effectively able to limit its competition.

If successful, this lawsuit could reshape the live event landscape — and the prices fans pay to see their favorite artists — across the country.

The state and district attorneys general joining the suit include several states that are home to major live event venues, including New York, California, Colorado, Florida and Texas.

In a lengthy statement provided to NPR on Thursday, Live Nation wrote in part: “The DOJ lawsuit will not resolve the issues fans care about regarding ticket prices, service fees and access to high-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 fundamental economics of live entertainment, such as the fact that the bulk of service fees are paid to theaters and that competition has gradually eroded Ticketmaster’s market share and profit margin.

In the suit, the Justice Department and the states allege that Live Nation and Ticketmaster engaged in several forms of anticompetitive behavior, including retaliating against other promotion companies and venues that worked with their rivals; exclude competitors with long-term exclusive ticketing contracts; restricting musicians’ access to live event venues; and the strategic acquisition of small, independent companies that Live Nation allegedly perceived as threats to its dominance.

Earlier this month, in an effort to increase transparency for consumers, the House of Representatives passed the TICKET Act, which would require Live Nation and other ticket sellers to list all costs and fees in the ticket price. ‘a ticket to a live event. The bill, introduced in the Senate by Ted Cruz of Texas, was supported by hundreds of prominent musicians, including Billie Eilish, Dave Matthews and Nile Rodgers, who wrote in a joint statement: “We stand together to say that the The current system is broken: predatory resellers and secondary platforms engage in deceptive ticketing practices to inflate ticket prices and deprive fans of the chance to see their favorite artists at a fair price.

According to the filing Thursday, Live Nation Entertainment currently owns or controls more than 250 music venues in North America and controls approximately 60% of concert promotions at major music venues in the United States. The company also directly manages more than 400 musical acts.

In the lawsuit, the Justice Department and the states claimed, “With this vast power comes influence. Live Nation and its wholly-owned subsidiary, Ticketmaster, have used this power and influence to insert themselves into the center and margins of virtually every aspect of the live music ecosystem.

“It’s time to dismantle Live Nation-Ticketmaster,” Attorney General Merrick Garland said in a statement.

In the past, and again in its statement to NPR on Thursday, Live Nation has argued that it’s musicians — not its own company — who ultimately set their own ticket prices. Dan Wall, Live Nation’s executive vice president of corporate and regulatory affairs, said the lawsuit “ignores everything that’s actually responsible for rising ticket prices, from increased production costs to the popularity of artists , through 24/7 online ticket scalping, which reveals the public’s willingness to pay. much more than (what) primary tickets cost.

“It is not surprising that Live Nation pointed the finger at the artists,” a senior Justice official said Thursday morning. “In an industry in which artists have historically been pressured to obtain compensation for their creative work, it is important that artists are properly compensated.”

“For us, it’s a bit of a red herring,” the official continued, referring to Live Nation’s previous argument. “How is the system set up? How does Live Nation’s control at every level of the system enable a process that is in part distorted by Live Nation’s power?

The DOJ is pushing for “structural relief,” that is, asking the federal court to break up the combined Live Nation-Ticketmaster company, which the DOJ itself approved in the 2010 merger. Justice Department officials now say that since the merger, Live Nation has created a stranglehold on the live events industry.

Thursday’s case is the latest lawsuit filed by the Biden administration against big companies it accuses of abusing monopoly power. The Department of Justice and the Federal Trade Commission have sued Apple, Google and Amazon. They succeeded in stopping the mergers of publishers Penguin Random House and Simon & Schuster and of JetBlue Airways with Spirit Airlines. They also revealed the partnership between JetBlue and American Airlines.

Last year, however, federal authorities lost their attempt to block the merger of Microsoft and video game giant Activision Blizzard; of Meta, the parent of Facebook, with the virtual reality company Within Unlimited; and insurer UnitedHealth Group with technology company Change Healthcare.

The announcement of the federal antitrust lawsuit against Live Nation is just the first step in what will almost certainly be a lengthy legal process, so music fans likely won’t experience a drop in ticket prices anytime soon.

With additional reporting by Alina Selyukh.