The Justice Department dropped a broad complaint against Live Nation on Thursday (May 23), citing more than a dozen examples of “anti-competitive and exclusive” behavior by the company accusing it of operating the world's largest live music monopoly.
The numbers look particularly bad for Live Nation's CEO Michael Rapinoewhose own emails are being used against him to document alleged threats against competitors while the company was operating under a federal consent decree tied to its 2010 merger with Live Nation.
Under the agreement, regulators with the government had the right to obtain corporate documents, including communications, without a subpoena. The most damaging evidence is an email exchange involving the Oak View Group Tim Leiweke and mega music manager Irving Azoffwho founded the arena development and management company together.
Leiweke was CEO of AEG, Live Nation's main rival in the concert industry, until 2012, when he was fired by the company's owner Phil Anschutz. After a brief stint with the Toronto Maple Leafs and his sports and entertainment interests in Canada, he returned to the United States and eventually founded Oak View Group (OVG) in 2015.
The government alleges that Rapino tried to use his company's partnership with OVG to pressure private equity firm Silver Lake to kill off a rival ticketing company that Rapino allegedly believed posed a major threat to Ticketmaster.
If true, the story could be a major problem for Rapino, underscoring the government narrative that despite Live Nation's huge market share, the CEO runs the company like a paranoid magician, willing to cross ethical and legal lines to eliminate tiny threats.
Silver Lake has been OVG's strategic investment partner since the company's inception, investing $100 million to launch it. Today, it has more than $2.5 billion committed to OVG development projects. Silver Lake also owns TEG, an Australian concert promotion company that operates Ticketek, a major Australian ticket provider with more than 130 customers.
According to the 120-page complaint filed Thursday in federal court, “In 2021, the CEO of Live Nation complained to the co-founder of Oak View Group that TEG was “[f]tough on competitors.” Oak View Group, in turn, relayed to Silver Lake that Live Nation was “not happy.” The complaint adds that Rapino then escalated his complaints directly to Silver Lake, stating, “I'm all in [Oak View Group] where the big game is in the venues – why insult me with this investment in tickets/promotions etc.'
According to the lawsuit, “Rapino threatened to withdraw her endorsement from Oak View Group and instead endorse a competitor of Oak View Group unless TEG stopped competing with Live Nation in the United States,” the complaint alleges .
“I can assure you that the OVG investment is a much bigger win than T[E]G,” Rapino wrote in an email to an unnamed Silver Lake executive named in the lawsuit. “It was a huge win for both sides – we have over 20 global arenas in development that neither could do without the other… you really want LN support [AEG’s venue development and management company]…? Seems like a dumb exchange???
To aid in the lobbying campaign, Azoff “reportedly refused to allow TEG to promote any of his major artist clients,” the complaint alleges. It further states that Azoff told Rapino “that he was going to demand that Silver Lake sell TEG. [To which] The CEO of Live Nation replied “I love you.”
“Silver Lake now appears to be 'intending to dump,' and has asked, through the founder of Oak View Group, whether Live Nation would be interested in buying TEG,” the complaint states in describing the move.
Live Nation did not buy TEG, but in early 2023, a deal was struck for Silver Lake to sell the company to investment firms Blackstone and KKR. That deal collapsed in October due to disagreements over the valuation of the company, which is now preparing for an IPO in Australia.
Live Nation issued a statement regarding this allegation, stating that “the allegation reveals not only a disregard for the facts, but also profound hypocrisy.”
“Today's Department of Justice and FTC criticize aggressive private equity firms that make multiple investments in the same industry because of competitive 'entanglements,'” the statement continued. “So did Live Nation CEO Michael Rapino when, having already made an investment in OVG, Silver Lake Partners decided to invest in Australian live entertainment company TEG. Rapino's complaint was essentially the same as the DOJ/FTC's interest in private equity: it created a conflict between OVG, which had become a close associate of Live Nation, and TEG. So in December 2021, when a TEG employee wrote to say he did not intend to compete with Live Nation in the US, Rapino responded to Silver Lake management that he was not interested in TEG but still had a problem with the decision of Silver Lake to make multiple conflicting investments in the industry.”
The statement also claims that “there is no truth that this brief exchange was related to Silver Lake's decision to sell its stake in TEG.”
In addition to the allegations about TEG, the government's complaint further alleges that OVG, when first formed in 2015, was “particularly suited to be an effective competitor to Live Nation in the United States concert promotion business” but changed its model to avoid competing with Live Nation.
Evidence from the time, however, suggests that OVG and Live Nation had long been billed as partners. A November 2015 press release announcing the launch of OVG includes a quote from Rapino supporting Leiweke's business model, stating, “Both Tim and Irving are friends of Live Nation as well as personal friends. The idea of creating a business model for both arena and touring artists that creates new revenue streams and develops an 'anchor' type of platform for music is something we share.”
The Justice Department alleges that Live Nation initially identified OVG as one of its “Greatest Competitor Threats” but that over time, the two companies turned “from competitors to partners who found it easier and more mutually beneficial to work together than to compete.” .
According to the government, OVG actually acts as “a self-styled 'pro-gay' and 'hammer' for Live Nation, with Leiweke once telling Rapino[j]as I tell ours, we always 100% protect you and LN in your lanes.”
In 2016, “upon learning that Oak View Group offered to promote an artist he had previously promoted, Live Nation's CEO immediately emailed Oak View Group, warning that such competition would only lead to artists demanding more compensation” , the complaint states. It also includes an email in which Rapino wrote about the artist: “What's going on? We have done it [touring] and Vegas[.] Let's make sure we don't let it go [the artist agency] now start playing us.”
As described in the complaint, Leiweke immediately responded: “Our kids got a little ahead of us. Everyone knows we don't promote and only tour with Live Nation.”
Azoff later chimed in, writing “Growing pains,” then noting that OVG executives “should never discuss [for artists],” and that OVG's talent buyers would work for Live Nation.
The government argues that this conversation is an example of Leiweke and Azoff colluding with Rapino to limit the competing offers sent to an artist in order to keep artist fees low. In another example cited in the complaint from 2022, Rapino admonished Leweike for directly pitching an artist to play an OVG venue instead of asking Live Nation to promote the show for OVG.
“Who would be so stupid to do that and play [the artist agent’s] guns”? Rapinoe asked Leiweke in the email. Leiweke replied, “We have never moved forward without you. I will not, until I write later, “[m]I am very happy to make these offers through LN as I have always been aligned' and that I 'never want to be competitors'.
The complaint also alleges that Live Nation is “taking advantage of its longstanding relationship with Oak View Group to transfer the venues to Ticketmaster, further strengthening Ticketmaster's power.”
According to the DOJ, in 2022 Live Nation and OVG entered into an unspecified agreement that led to OVG's recognition “it has a significant economic interest in maintaining existing Ticketmaster contracts at its venues and converting other venues to Ticketmaster.”
At one point, according to the lawsuit, Leiweke told Rapino that the deal “allows us to tie all owned and operated facilities into 10-year agreements, develop a standard A and B purchase agreement for all future projects, and convert all OVG 360 agreements to TM now or as they expire for 10 years… Appreciate the consideration and cooperation and all of us will work diligently on this to always be aligned with TM.”
Live Nation responded to this claim in a statement: “The theory is that the contract gave Ticketmaster an unfair advantage in securing the business of independent venues operated by OVG because it creates a financial incentive for OVG to 'endorse' Ticketmaster. But there is absolutely nothing anti-competitive about it. Commercial arrangements involving incentive payments or marketing are common in this industry (and many others)'. The statement added, “Ticketmaster competed for and won the contract on the merits because OVG judged it to be the best ticketing system available.”
