The Department of Justice wants to cut Live Nation and Ticketmaster’s set short. After months of anticipation, the DOJ filed an antitrust lawsuit against the companies, seeking for them to be broken up. “We allege that Live Nation has illegally monopolized markets across the concert industry in the United States for far too long,†Attorney General Merrick Garland said during a press conference on May 23. The lawsuit comes amid renewed attention on Live Nation and Ticketmaster after issues with ticket sales for artists including Beyoncé, Bruce Springsteen, and, most prominently, Taylor Swift. Congress has also turned a bipartisan eye toward Live Nation.
Twenty-nine states and the District of Columbia joined the federal government in the lawsuit, which makes a meticulous case that Live Nation and Ticketmaster hold monopoly power in multiple markets. Live Nation, meanwhile, has responded by calling the claims “absurd†and “baseless.â€
Let’s make like antitrust lawyers and break things up down:
What is Live Nation’s relationship with Ticketmaster?
Live Nation and Ticketmaster merged in 2010, a move that was also controversial at the time. Live Nation had become the second-largest ticketing platform behind Ticketmaster, and some lawyers and scholars cautioned that the deal could create a self-dealing monopoly. The Obama administration aimed to solve that with a consent decree that set some boundaries for Live Nation and Ticketmaster’s conduct. That decree was set to run for ten years, but after Live Nation was found to have violated it in 2019, the Justice Department and Live Nation agreed to extend it to the end of 2025. Live Nation’s violations at the time included claims of pressuring venues to use Ticketmaster.
What is the Department of Justice claiming?
At a press conference announcing the lawsuit, Garland stressed that Live Nation’s conduct wasn’t just anti-competitive but illegal. “We allege that Live Nation controls the entertainment industry in the United States because it is breaking the law,†Garland said. More specifically, the lawsuit claims five violations of the Sherman Antitrust Act:
1. Live Nation has a monopoly on primary-ticketing markets.
2. Ticketmaster’s long-term deals with venues represent exclusive dealing.
3. Live Nation has established a tying arrangement by requiring artists performing in Live Nation venues to use Live Nation as a promoter.
4. Live Nation has a monopoly on large amphitheaters.
5. Live Nation has monopolies on concert promotion for both venues and artists.
Twenty-two states additionally claim that Live Nation has violated their antitrust and monopoly laws.
That’s a lot!
Really, it comes down to Live Nation’s market power over ticketing, venues, and promotions. The lawsuit zones in on Live Nation’s own “flywheel†characterization of its business. A flywheel is the large wheel that turns other gears or wheels. Live Nation has claimed that its flywheel is concert promotion, which has a lower margin. Once that wheel turns, it starts turning the wheels for Live Nation’s other high-margin businesses: ticketing, venues, and advertising. And those wheels then keep the flywheel of concert promotion turning, ensuring Live Nation’s power in the live-events industry. The lawsuit alleges this is how Live Nation is able to force certain venues to use Ticketmaster or certain artists to use Live Nation for concert promotion.
What other allegations does the lawsuit make?
The lawsuit includes some juicy alleged examples of Live Nation’s anti-competitive conduct, including:
➽ Live Nation has a “competitive détente†with Oak View Group, a venue-management company that’s well positioned to be its competitor. Founded by music mogul Irving Azoff (former CEO of Ticketmaster and chairman of Live Nation) and executive Tim Leiweke (former CEO of concert promoter AEG), Oak View Group has allegedly reneged on promoting concerts multiple times at Live Nation’s request. A senior vice-president allegedly said in 2019 that it was Oak View Group’s “policy to stay on the sidelines†in concert promotion to help Live Nation. Live Nation has also allegedly used its close relationship to promote Ticketmaster in Oak View Group venues.
âž½ Live Nation threatened a promotion company owned by Silver Lake, a private-equity firm with a controlling stake in Oak View Group.
When Silver Lake’s TEG promoted a concert for “a big-name artist†at the Los Angeles Memorial Coliseum in 2021, Live Nation used Ticketmaster “to frustrate†ticketing at the concert by refusing to recognize tickets from StubHub, which had partnered with TEG. (This sure sounds like Ye and Drake’s “Free Larry Hoover†benefit concert.)
➽ Live Nation threatened a venue that switched its ticketing from Ticketmaster to SeatGeek in 2021. A senior Live Nation executive allegedly texted the venue’s CEO that it “should think about bigger relationship with LN not just who is writing a bigger sponsorship check†with a winking emoji. Live Nation’s CEO also allegedly told the venue’s owner that the company would “be very concerned†about SeatGeek ticketing for Live Nation artists. After the exchange, Live Nation began routing its concerts away from that venue. Live Nation also allegedly caused issues with SeatGeek’s secondary-ticketing sales for Live Nation artists. The venue switched back to Ticketmaster in about a year. (This sure sounds like the Barclays Center.)
➽ Another venue-management company worried about losing Live Nation shows if it didn’t use Ticketmaster. Anschutz Spectator Management, or ASM Global, manages over 30 arenas in the U.S. and is part-owned by AEG, which is Live Nation’s biggest competitor. AEG tried to get ASM Global to use AXS, its preferred ticketing service, at its venues, but majority shareholder Onex was allegedly concerned that if ASM Global venues did not use Ticketmaster, Live Nation would withhold events.
➽ Ticketmaster used the pandemic to extend its exclusive ticketing agreements by one year and told a venue that choosing a different ticketing partner during this time would be “a breach of contract.†One venue told Ticketmaster it planned to sign with a different ticketing company because it disagreed with extending their agreement. Live Nation’s CFO allegedly told the venue it would “drop†the contract issue if the venue signed a new agreement with Ticketmaster.
➽ Live Nation would rather keep its top amphitheaters “dark†during peak times than work with other promoters. The lawsuit cites 2018 Live Nation data that said the company’s top-ten amphitheaters don’t have shows “on nearly 50% of their Saturdays in the summer.†A 2022 analysis allegedly showed that Live Nation’s top-15 amphitheaters sit empty for an average of eight Saturdays between June and September.
➽ Live Nation regularly acquired companies that it internally designated as its “Biggest Competitor Threats.†Among these, per the lawsuit, are AC Presents (in which Live Nation bought a stake in 2016), Frank Productions (which Live Nation acquired in 2018), National Shows 2 (a subsidiary of Frank), and ScoreMore Shows (in which Live Nation secured a majority stake in 2018). These are just a fraction of Live Nation’s recent acquisitions and deals laid out in the lawsuit.
So what about those ticket fees?
Live Nation and Ticketmaster’s highly criticized fees aren’t cited as directly anti-competitive themselves but, rather, a symptom of Live Nation’s alleged monopoly. The lawsuit calls Live Nation’s extensive fees a “Ticketmaster Tax†and claims that other countries, where multiple ticketing and promotion companies flourish, do not have as high of concert fees. Per the lawsuit, “Live Nation’s various contracts operate together to drive up the overall number and size of fees paid by fans.†The implication is that breaking up Live Nation and Ticketmaster, and opening the market, would in turn lessen concert fees. The TICKET Act, which just passed in the House of Representatives, also focuses on ticketing fees.
How has Live Nation responded?
In a heated statement to the media, Live Nation fought back against the lawsuit, saying the company “will defend against these baseless allegations.†“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 basic economics of live entertainment,†Live Nation said. (The company went on to claim that “the bulk of service fees go to venues,†but the lawsuit says that venues only “superficially†set their fees according to what they must pay back to the promoter, or Live Nation.)
Live Nation published an essay responding to the lawsuit, written by executive vice-president of corporate and regulatory affairs Dan Wall. He claims the lawsuit “won’t reduce ticket prices or service fees†and that Live Nation and Ticketmaster do not have monopoly power. The web page uses a number of odd graphics that compare Live Nation to companies like Twitch, Apple, and Meta. Wall also goes on to clarify and refute a number of the lawsuit’s claims around the Oak View Group, Silver Lake, and other alleged anti-competitive conduct.
Wall frames the lawsuit as an act by an overzealous Department of Justice caving to political pressure. He says Live Nation met repeatedly with the department, but it “just did not want to believe the numbers†that Live Nation provided to refute the monopoly claims. “DOJ is not helping consumers with their actual problems,†he adds, again claiming the lawsuit will not lower ticket prices. “This is why the government has never been less popular — because they pretend they are fixing your problems when instead they are pandering to a narrow set of political interests.â€
What happens next?
The lawsuit calls for Live Nation to divest from Ticketmaster and end its ticketing agreement with the Oak View Group along with other “anticompetitive practices.†It also calls for monetary relief over Live Nation’s conduct. “It’s necessary to separate Ticketmaster from Live Nation to limit the overall dominance of the industry,†Garland said during the press conference.
Practically, the case has been filed under the United States District Court for the Southern District of New York. It could take years for the case to be tried — and even longer for a result if a ruling is appealed. The Justice Department filed a similar antitrust suit against Microsoft in 1998, but a judgment did not come until 2000, and, following an appeal, the case was not resolved until 2004. In other words, don’t count on concert ticketing changing much for a while.