Pressure Mounts on Live Nation Break Up

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Since President Donald Trump assumed office, discussions have been ongoing about whether the Department of Justice under his administration would persist in their efforts to split Live Nation and Ticketmaster. This matter remains unclear, as there are indications pointing in different directions.

Supporters within Trump’s inner circle endorse the past administration’s antitrust actions, with JD Vance, the vice president, commending the Federal Trade Commission’s work under Lina Khan. Meanwhile, efforts to divide large tech companies continue among merger regulators. Contrastingly, it seems that the Justice Department will not challenge Capital One’s proposed takeover of Discover Financial Services, despite initial apprehensions about competition issues arising from this deal.

Now, advocates and lawmakers are stepping in.

On Thursday, the American Economic Liberties Project, a nonprofit advocating stronger antitrust actions, along with the Break Up Ticketmaster Coalition, urged the Department of Justice to move forward with its lawsuit against Ticketmaster, the giant in live events. The coalition’s letter, obtained by The Hollywood Reporter, emphasizes the importance and urgency of the case. It highlights Live Nation’s alleged practices of putting pressure on fans, artists, and independent venues while still reporting substantial revenue and concert profits.

In simpler terms, “The letter states that Live Nation-Ticketmaster has maintained a strong control in the ticketing industry through aggressive business tactics and limiting who can compete. This includes suppressing other concert promoters and ticketing services that are more favorable to fans. As a result, they have expanded their influence across the entire market, making an already difficult situation even worse.

This situation arises due to lawmakers urging regulators to scrutinize Live Nation’s partnership with Fanatics, enabling Ticketmaster to sell secondary tickets for sporting events via the Fanatics sports app. Some reports suggest that Live Nation was contemplating entering the ticket resale market. In their viewpoint, Live Nation struck this deal to preserve its dominance in the ticketing industry.

In a letter published on Tuesday, Senators Amy Klobuchar (D-MN) and Mike Lee (R-UT) called for an investigation into the proposed Live Nation-Ticketmaster deal. They expressed concern that Ticketmaster’s past anticompetitive behavior might have violated antitrust laws, potentially denying consumers the advantages of fresh competition in this market.

Essentially, the Justice Department’s lawsuit against Live Nation centers around claims that the company, being the nation’s leading concert promoter, ticket seller, and venue operator, unfairly uses its dominant positions to hinder competition. The accusations include illegally binding venues to exclusive ticketing agreements, making anticompetitive acquisitions, and retaliating against competitors who opt for ticketing services other than Ticketmaster. The government’s aim is to lower ticket prices and fees by separating Ticketmaster from Live Nation. This separation could significantly diminish Live Nation’s extensive influence across various sectors of the live events industry.

In their correspondence, AELP expresses concerns about escalating costs, lack of transparency, and limiting arbitration agreements, among other issues that negatively impact artists. They accuse Live Nation of constructing a “self-sustaining cycle” – a term used by the Justice Department – which utilizes its various interconnected businesses within the live events industry to suppress competition by undercutting rivals.

Live Nation continues to refute the claims made by the DOJ, stating that their business has become increasingly competitive since the merger. They contend that the lawsuit is a distraction from finding genuine solutions that could lower prices for fans and provide protection. Instead, they advocate for stricter regulations on ticket reselling and the secondary marketplace.

The core concern of the Justice Department’s lawsuit revolves around the alleged peaceful coexistence, or truce, between Live Nation and Oak View Group – a company specializing in venue development and management, which was founded by Tim Leiweke, former CEO of AEG, and Irving Azoff, a talent manager who once served as chairman of Live Nation. Neither Oak View Group nor either of these individuals were listed as defendants in the lawsuit.

Over 200 venues managed by OVG span the country, from the Climate Pledge Arena in Seattle to the Moody Center in Austin. The government alleges that Live Nation and OVG conspired, agreeing not to compete against each other for artists and tours. For instance, in 2016, Michael Rapino, CEO of Live Nation, emailed Oak View Group (a competitor with whom they previously worked), stating that such competition might prompt artists to demand higher pay during bidding wars. After this conversation, the company decided against making a bid.

One area of worry for AELP is Live Nation’s string of acquisitions last year, such as buying venues like Bell House and Paramount in New York. This, coupled with concerns shared by lawmakers, pertains to Live Nation’s deal with Fanatics. Initially, there were plans for Fanatics to establish its own ticketing platform, but they eventually chose a partnership instead. Senators Klobuchar and Lee have expressed that this agreement raises questions about whether Live Nation might have used its alleged dominance in the market to deter Fanatics from entering the online ticketing industry.

Approximately 70% of primary NBA and NHL tickets are managed by Ticketmaster, as stated by the Justice Department. This company serves as the main ticket provider for around 82% of the biggest performance spaces. Notably, over 64% of these venues are either owned or operated by Ticketmaster itself. Furthermore, Ticketmaster has grown to become one of the major service providers for live event booking and promotion, catering not only to venues but also to artists.

The ongoing lawsuit filed by the Justice Department is based on the 2009 amalgamation of Live Nation and Ticketmaster. In the past, Live Nation used to be Ticketmaster’s biggest client. The proposed merger raised eyebrows among other concert promoters and venue operators because they believed that joining forces between Ticketmaster and Live Nation would compel them to collaborate with their main competitor.

The Department of Justice allowed the merger under specific terms, one being that the company should not punish venues for opting for different ticketing platforms. However, it was discovered in 2019 that this condition had been breached by the company through aggressive tactics, compelling venues to use Ticketmaster as a prerequisite for hosting Live Nation artists, and retaliating against those who resisted.

Live Nation asserts that they have continually adhered to the terms of the consent decree, resolving issues with the DOJ when necessary. However, AELP alleges that Live Nation is still breaching this consent decree, which will expire later this year.

While there’s no specific timeframe within which mergers must be challenged, the government needs to demonstrate that Live Nation has misused its market dominance in a way that contravenes antitrust regulations. Merely possessing a monopoly isn’t automatically unlawful; for instance, the Federal Communications Commission allowed the merger between XM and Sirius in 2008, even though the merged entity was the sole licensed satellite radio broadcaster.

During a February earnings discussion, Live Nation disclosed an operating income of $825 million for the previous year. This was achieved with approximately 151 million fans attending more than 50,000 events. Their total revenue amounted to around $23 billion, with about $19 billion being generated primarily from their concert division.

Regarding questions on expensive tickets, CFO Joe Berchtold explained that the artists involved in stadium tours have their prices “nearly spot-on,” and this pricing strategy is intended to discourage ticket scalpers.

As a passionate advocate, I’ve joined countless fellow Americans since 2022, urging the Department of Justice (DOJ) to dissolve the Live Nation/Ticketmaster monopoly. It’s crucial that the DOJ persists with this case and considers structural resolutions as the public expects. Previous attempts to negotiate with this colossus have failed in halting the exploitation of independent venues, artists, and fans alike. Only a full dissolution will satisfy our demands for fairness and protection of our shared love for music.

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2025-04-17 20:27