Fourteen years after industry giants Live Nation and Ticketmaster came together in a blockbuster, industry-shifting merger, the Department of Justice is hoping for a curtain call.
On Thursday, the DOJ and attorneys general from 29 states and the District of Columbia brought a major antitrust lawsuit against the live entertainment giant, accusing it of maintaining a monopoly over the industry and engaging in anticompetitive practices. Such conduct, the suit states, “strikes a chord precisely because the industry at stake is one that has for generations inspired, entertained, and challenged Americans.”
The DOJ’s lawsuit delves into the inner workings of the live music industry and Live Nation’s dominance, anchored by a business model the company itself has described as a “flywheel.” The DOJ runs with that term in the lawsuit, describing it in a statement as a “self-reinforcing business model that captures fees and revenue from concert fans and sponsorship, uses that revenue to lock up artists to exclusive promotion deals, and then uses its powerful cache of live content to sign venues into long term exclusive ticketing deals, thereby starting the cycle all over again.”
Along with stifling competition, the DOJ claims Live Nation has tamped down on innovation when it comes to selling tickets, leaving fans in the U.S. with “outdated technology” and higher prices than other countries.
Live Nation has denied the accusations. In a statement, Dan Wall, the company’s Executive Vice President of Corporate and Regulatory Affairs, rejected the notion that Live Nation is a monopoly and said breaking up the company would not result in lower ticket prices. He also argued that the company faces far more robust competition in the marketplace than the DOJ alleges. (Live Nation’s statement was later updated to include more detailed responses to some of the allegations contained in the lawsuit, including several mentioned in the takeaways below.)
The DOJ’s 128-page lawsuit is a dense and detailed document filled with claims about how Live Nation has allegedly amassed and wielded its power over the years. Here are the five biggest takeaways from the monumental suit, which could end up completely reshaping the live entertainment world.
1. Live Nation “Colluded” With Oak View Group to Avoid Competition With Each Other
One of the DOJ’s most significant claims is that Live Nation and Oak View Group (OVG) — a venue development company co-founded by music manager and former Live Nation chairman Irving Azoff — “colluded and established a partnership to allocate business lines, avoid competing with each other, and chart a mutually beneficial plan to cement Live Nation’s dominance.”
The DOJ alleged that OVG “operates as an agent and a self-described ‘pimp’ and ‘hammer’ for Live Nation, often influencing venues and artists for the benefit of Live Nation.”
Per the DOJ, Live Nation CEO Michael Rapino voiced a complaint to Oak View Group CEO Tim Leiweke in a 2016 email after learning that Oak View had allegedly offered to promote an artist Live Nation had worked with. The suit characterizes Rapino’s message as a “warning that such competition would only lead to artists demanding more compensation.”
“Whats up?” Rapino allegedly wrote. “We have done his [touring] and vegas[.] Let’s make sure we don’t let [the artist agency] now start playing us off.”
“Our guys got a bit ahead,” Leiweke allegedly replied. “All know we don’t promote and we only do tours with Live Nation.”
According to the suit, Oak View Group’s other co-founder (ostensibly Azoff), also replied, “Growing pains.” According to the suit, he allegedly added that “Oak View Group’s executives ‘should never discuss comp [for artists],’ and Oak View Group’s talent buyers would work for Live Nation.”
The DOJ detailed a similar exchange from 2022 after Live Nation allegedly learned about another Oak View promotion offer. Rapino allegedly wrote in an email, “who would be so stupid to do this and play into [the artist agent’s] arms.”
“We have never promoted without you. Won’t,” Oak View’s CEO replied. He later added that he was “[m]ore than happy to do these deals thru LN as I have always been aligned” and that “I never want to be competitors.”
Per the DOJ, as Oak View stayed away from promotion, “Live Nation effectively ceded its arena consulting business to Oak View Group.” OVG, the DOJ said, would “flip venues to Ticketmaster” for ticketing.
A rep for Oak View Group didn’t immediately respond to request for comment. Live Nation, in response, said in part: “DOJ’s claim is based on two incidents in which Live Nation and OVG were discussing what to do when an OVG venue wanted to book on occasional show itself on a dark night. To portray that as an agreement not to compete in concert promotion is farcical—particularly when the complaint defines the relevant promotions market as a market for regional or national tours, and explicitly disavows the suggestion that ‘self-supply’ of shows from venue owners is part of that market.”
2. Live Nation and Oak View Group Compelled One of OVG’s Own Investors to Deter a Competitor
According to the DOJ, Live Nation, with assistance from Oak View, compelled OVG’s own investor Silver Lake Capital to stop one of its other companies, TEG, from competing for concert promotion deals in the U.S.
“Live Nation’s campaign to squash competition with TEG took place at the highest levels,” according to the complaint. “In 2021, Live Nation’s CEO complained to Oak View Group’s co-founder that TEG was ‘[f]ull on competitors.’ Oak View Group, in turn, conveyed to Silver Lake that Live Nation was ‘not happy.’ Live Nation’s CEO then escalated his complaints to Silver Lake directly, conveying: ‘I am all in on [Oak View Group] where the big play lies with venues — why insult me with this investment in ticketing/promotions etc.’”
Upon learning that TEG had secured a concert with a major artist at the Coliseum in Los Angeles, “Live Nation used its exclusive ticketing deal with the venue to frustrate TEG’s concert,” the DOJ alleged.
TEG had reportedly reached an agreement with resale site StubHub to sell some tickets to the platform. But given Ticketmaster’s status as the exclusive ticketer for the Coliseum, Live Nation “threatened to deny entry to any fan using a StubHub-issued ticket.” According to the suit, “StubHub stopped selling tickets and attempted to work with Ticketmaster to fulfill the tickets that it had already sold.”
Following this incident, Rapino allegedly wrote that he “fail[ed] to understand” why Silver Lake “continue[d] to invest in a business that competes with LN/OVG….” He even allegedly threatened to stop doing business with Oak View Group.
One of the Oak View co-founders allegedly “informed Live Nation that he was going to demand that Silver Lake sell TEG. Live Nation’s CEO replied, “Love ya.” After that, the DOJ said, TEG stopped promoting shows in the U.S.
Live Nation retorted, “There is no truth that this brief exchange had anything to do with Silver Lake’s decision to sell its stake in TEG.”
3. Live Nation Frequently Benefits From Ticketmaster’s Fees
Ticketmaster’s infamous service fees, which have long frustrated fans, have unsurprisingly become a major flashpoint in the antitrust dispute. Live Nation has frequently asserted that Ticketmaster “retains only a modest portion of those fees,” and that its commission rates are actually much lower than many other digital retailers (including the resale platform, StubHub). Furthermore, Live Nation has argued that it’s actually venues that set and keep the bulk of those fees.
While the DOJ acknowledged this, it also pointed out that the other “intermediaries” that benefit from these fees, like venue and promoter, “are often Live Nation-owned entities.” The DOJ stated that “a significant proportion of the venue’s share” in the ticket fee is “often passed onto promoters, like Live Nation, to incentivize them to steer content to their venue.”
Furthermore, the DOJ argued that while venues may set fees, those decisions are not made in a vacuum. They’re based on what portion of those fees Live Nation will keep — an amount the company “negotiates with each venue” before the fee is set. “In other words, Live Nation’s various contracts operate together to drive up the overall number and size of fees paid by fans,” the DOJ said.
One example the DOJ gave is a “ticketing” fee stipulated in many Ticketmaster contracts, which allegedly allows Ticketmaster to take an additional cut when venues “increase their own fees to offset Live Nation’s concert promotion charges.” This “double-dip,” as the DOJ called it, “means venues have to raise fan-paid fees just to offset Live Nation’s promotion charges. For example, a venue forced to pay Live Nation a $5 promotions rebate and Ticketmaster a portion of any increased fees would need to raise fees on fans by significantly more than $5 to break even.”
4. Live Nation Has Retaliated Against Venues for Not Using Ticketmaster
The DOJ alleged that Live Nation’s “reputation and history of retaliation are so well known” that it doesn’t even have to “explicitly threaten individual venues” anymore — though it allegedly still does. These threats loom largest when it comes to steering venues away from other ticketing competitors, the DOJ said.
“Venues considering primary ticketing options understand all too well the risks of switching to another ticketer, and some even model the loss they would suffer if they switched and lost access to some of Live Nation’s concerts,” the complaint claimed. “The threat of steering shows away from venues allows Live Nation to exercise its monopoly power to get better promotions deals and impose Ticketmaster on venues.”
Should it need to use them, the DOJ said Live Nation has “a number of punitive tools” at its disposal. These allegedly include: reducing the number of concerts at a venue; moving shows to less desirable or lucrative dates; reducing promotional efforts; or forcing venues to prevent ticket re-sales on platforms besides Ticketmaster. One example given in the lawsuit involved a 2021 concert, when a venue decided to use SeatGeek instead of Ticketmaster because of a better deal on secondary market fees.
After learning about the potential switch, a senior Live Nation exec allegedly texted the venue’s CEO: “Apparently seatgeek are telling [nearby venue] and others that they have a contract deal with you guys already?? Anyways should think about bigger relationship with LN not just who is writing a bigger sponsorship check.” (This was followed by a winky-face emoji.)
Then, a few days later Rapino allegedly emailed the venue’s owner, too, saying Live Nation “will be very concerned that seatgeek a secondary provider will be selling our LN artist tickets when not authorized by the artist.”
The venue went through with the switch anyway, and Live Nation allegedly re-routed concerts to other venues and demanded the venue disable secondary ticketing on SeatGeek for all Live Nation-promoted concerts that were held there. While Live Nation eventually did backtrack and allow those secondary sales, it was only after the venue “agreed to split its share of secondary fee revenue” with Live Nation.
5. Ticketmaster Locks Venues Into ‘Long-Term, Exclusive’ Deals That Stifle Competition
Along with the alleged threat of retaliation, the DOJ claimed that Ticketmaster has locked venues into “long-term, exclusive agreements” that bolster Live Nation’s “stranglehold on the live concert industry, and on primary ticketing in particular.” The suit even quoted Ticketmaster as describing these deals as a “[h]edge against significant improvements by the competition or even a new competitor.”
The DOJ went on to characterize these “strategies” as “deliberate and defensive” actions used to “lock up venues, lock out competitors, and hold the industry hostage from innovation and evolution.” In contrast, the lawsuit highlighted the way venues are “open” to multiple ticket sellers in other countries. In France, for instance, tickets are held in a “central inventory management system” that multiple ticketing companies can access. And in the U.K., promoters often put aside “bundles of tickets to multiple ticketing providers.”
“No matter the form it takes,” the suit said, “an ‘open’ system means that artists, whose incentives for a lower-cost, higher-quality concert experience are more closely aligned with fans, are more likely to play a role in choosing the ticketing company of their choice.”
Live Nation defended these deals, saying, “Competitive bidding for exclusive rights is the proven way for venues to create bidding pressure and maximize the value of their ticketing rights. In other words, exclusivity is a product of competition for venues, not an anticompetitive practice.”
According to the DOJ, Live Nation has aimed to “protect and expand its positions” through a “strategy of acquiring nascent threats and neutralizing rivals.” Over the years, they’ve bought up promoters, festivals, amphitheaters, venues, and ticketers. Many of these companies were much smaller, regional businesses, but internal Live Nation documents described them as some of the company’s “biggest” threats.
Per the DOJ, “Live Nation viewed many of these acquisitions of competitors on the ‘edge’ as necessary to protect its ‘moat’ around the live concert ecosystem.” This even allegedly led them to pursue acquisitions that didn’t make sense on an individual financial level, but potentially made sense for other reasons.
For instance, when discussing the 2016 acquisition of AC Entertainment, a regional promoter in the Southeast, Live Nation’s Chief Strategy Officer allegedly told executives, “The numbers are not super exciting and this feels like more of a defensive move to (I) Keep [rival] AEG out of the region especially creating situation where [a well-known artist manager] can play both sides in Nashville.”
Live Nation characterized this acquisition differently, saying: “This was an acquisition of one promoter, who was in his 60s and looking to retire. He approached Live Nation looking to find a good, long-term home for his employees. Live Nation did not have a Knoxville office, so for $15 million it made the deal. Seriously? The DOJ is challenging that?”
Along with “eliminating” many mid-tier promoters and leaving smaller companies with “little market share,” the DOJ said, the acquisition of these regional promoters arguably had a detrimental effect on artists, too. The DOJ said Live Nation personnel “justified the counterintuitive economics” of some of these deals by noting other “long-term benefits,” like, “reducing competition for artists, including by ‘keeping the [artist] guarantees down’ and stopping competitors from ‘driving the price up’ for artists.”
In 2018, Live Nation acquired Red Mountain Entertainment, a regional promoter that organized shows and operated several venues around Alabama and Mississippi. The company had been on Live Nation’s radar for a couple of years, with one company executive saying in 2016 that they had an “active plan to mitigate” Red Mountain’s expansion because Live Nation “[c]an’t get complacent and let small guys encroach from the edges.” According to the DOJ, Live Nation “recognized” that Red Mountain’s ownership of the Tuscaloosa Amphitheater was “driving up compensation to artists”; if Live Nation could gain control over the venue, it would be able to ““keep the guarantees down.”
From Rolling Stone US
