Given the glacial pace at which federal antitrust litigation moves, the U.S. Department of Justice's landmark lawsuit against Live Nation and its wholly-owned subsidiary Ticketmaster is expected to take years to wind its way through the legal system, either fully litigated or live event Goliath agrees to make changes to its operations, which the government often calls “behavioral remedies.”
And while it's clearly too early to predict how the case will play out, legal expert and antitrust attorney Lawrence J. White from New York University's Stern School of Business says the potential winners and losers have already been largely predetermined based on hints found in the 128-page complaint the DOJ filed May 23 in the U.S. District Court for the Southern District of New York.
“The companies named in the complaint as the most harmed by anticompetitive behavior are usually the same companies that stand to gain the most from the settlement,” says White.
In Live Nation's case, the winners will likely be the company's main concert promotion competitor, AEG Presents. aftermarket ticketing competitor SeatGeek; and a handful of major independent promoters such as Chicago's Jam Productions. The losers will likely be Live Nation. Irving Azoff and Tim LeiwekeThe venue's owner, management and hosting company Oak View Group — which the Justice Department claims has “described itself as a 'hammer' and “protects[or]”for Live Nation” — as well as, potentially, major artist management companies and talent agencies, depending on the government's solution to more competitive ticket pricing.
The government tends to rely on private companies to implement its policy goals during the remedial phase of an antitrust case, as was the case with the 2010 merger of Live Nation and Ticketmaster. That deal unsuccessfully supported two private companies—AEG and Comcast Spectacor — to act as competitors to Ticketmaster.
Whether the DOJ wins in court or ends up settling with Live Nation, White says he will lean on big companies to help enforce the ruling. As Live Nation's only major ticketing and concert promotion competitor, AEG, which owns AXS Ticketing, is an obvious choice as a DOJ partner because of the company's large scale, which will be critical to the long-term DOJ's goal to lower ticket prices. (The Justice Department is believed to have interviewed more than 100 people in the live music industry as part of its recent antitrust investigation into Live Nation.)
In a May 23 press release announcing the filing of the lawsuit, Attorney General Merrick Garland said, “We argue that Live Nation relies on illegal, anticompetitive conduct to exert its monopolistic control over the live event industry in the United States to the detriment of fans, artists, smaller promoters and venue operators.” He argues that increasing competition among Live Nation's ticketing rivals and in the artist promotion space will drive down face value ticket prices.
Before Live Nation and Ticketmaster merged in 2010, four or five ticketing companies were able to compete with the latter on an arena level. In 2024, the company's two main competitors are AXS and SeatGeek, the secondary site that also happens to own one of the only major ticketing products capable of serving large arenas and stadiums. Other competitors include Tickets.com, the ticketing company owned by Major League Baseball Advanced Media, and Paciolan, which focuses primarily on the college market and is owned by Learfield. Ticketmaster agreed to sell Paciolan as a condition of the 2010 merger. Ticketmasters say Advertising sign that the company's market share decreased after the merger.
In a statement given to Advertising sign, SeatGeek said, “We are optimistic that the Justice Department's antitrust action to break up the Live Nation-Ticketmaster monopoly will restore fair market competition in live entertainment.” On the concert promotion front, there are far fewer major independent promoters now than there were before 2010, and only a few are capable of touring large arenas across the country. In addition to Jam Productions, they include Nashville's Outback Concerts and Another Planet Entertainment in the San Francisco Bay Area. All three promoters declined to comment for this story.
In a May 31 letter to his staff, AEG chairman/CEO Jay Marciano outlined how the Justice Department could make concert promotion fairer and lower ticket costs by dismantling Live Nation's “flywheel” business model, which is cited in the DOJ complaint and described in a May 23 press release as “a self-reinforcing business model that collects fees and revenue from concert fans and sponsorships, uses that revenue to lock artists into exclusive promotional deals, and then uses its strong cache of live content to sign venues to long-term exclusive ticketing deals, kicking off the circle from the beginning”.
“That's why antitrust laws protect competition, not competitors trying to use the courts to further their own interests,” he said. Dan Wallexecutive vice president of corporate and regulatory affairs at Live Nation, in a statement sent to Advertising sign after Marciano's letter was made public on May 31. “AEG supports this case — indeed, it begged the DOJ to file it because it doesn't want to pay artists market rates or convince venues to exclusively adopt the second-tier ticketing system. Her complaints about service charges are hypocritical considering she could lower AXS's service charges today if she really cared. Self-interested arguments like these are common in antitrust cases, but rightfully ignored.”
Marciano's letter went on to say that Live Nation's flywheel model “leverages the excessive profits of its ticketing monopoly to exceed the costs that the concert market can profitably sustain.”
According to this theory, ticket prices would fall if Live Nation couldn't use its other sources of revenue to overpay artists and compete with other promoters who offer artists an 85/15 or 90/10 split on sales of tickets.
Although the theory is not widely accepted by most major talent agents or managers — IAG executive, vice president/head of global music Jared Arfa calls it “unrealistic” and “absurd” — gaining popularity among big indie backers and DOJ lawyers, sources say Advertising sign. Whether the government settles or takes Ticketmaster to trial will depend on the time and resources the Justice Department is willing to spend on the case and the evidence it has gathered against Live Nation.
THis story appeared in the June 22, 2024 issue of Advertising sign.
MODERNIZE: This story was updated on June 27 at 12:54 am. ET to add a statement from Live Nation executive Dan Wall as well asnames additional ticketing competitors for Live Nation and a claim by Live Nation that its market share has declined since its 2010 merger with Ticketmaster.
