Live Nation-Ticketmaster responds to DOJ antitrust lawsuit

Background Image: Yvette de Wit on Unsplash

Live Nation Entertainment has issued a vigorous response to the antitrust suit filed today (Thursday) which seeks to split it from Ticketmaster, arguing that it will not “reduce ticket prices or service fees” for fans. 

In a post, executive vice-president of corporate and regulatory affairs for Live Nation Entertainment Dan Wall has lambasted the Department of Justic (DOJ) and its depiction of Live Nation and Ticketmaster. The response also said that the world “was a better place” because of the 2010 merger between the entertainment and ticketing giants.

The DOJ case is centred around Ticketmaster’s use of exclusive ticketing contracts when signing up venues for its ticketing services. According to critics of Live Nation’s business model, this squeezes out competitors, weakens customer choice and helps to push up prices.

The lawsuit was filed in federal court in Manhattan, and was brought with 30 state and district attorneys general.

Attorney General Merrick Garland said in a statement: “We allege that Live Nation relies on unlawful, anticompetitive conduct to exercise its monopolistic control over the live events industry in the United States at the cost of fans, artists, smaller promoters, and venue operators.

“The result is that fans pay more in fees, artists have fewer opportunities to play concerts, smaller promoters get squeezed out, and venues have fewer real choices for ticketing services. It is time to break up Live Nation-Ticketmaster.”

The complaint accused Live Nation and Ticketmaster of unlawfully maintaining monopolies in concert promotion and primary ticketing markets, while engaging in other exclusionary tactics. The suit added that the “flywheel” is Live Nation-Ticketmaster’s 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.

The complaint further noted that in recent years, Oak View Group had avoided bidding against Live Nation for artist talent and venues after beginning life as a competitor. It also said that Live Nation-Ticketmaster blocked venues from using multiple ticketing companies, and that it regularly acquired competitors and competitive threats.

In Live Nation’s response, Wall wrote: “The complaint – and even more so the press conference announcing it – attempt to portray Live Nation and Ticketmaster as the cause of fan frustration with the live entertainment industry.  It blames concert promoters and ticketing companies – neither of which control ticket prices—for high ticket prices.

“It ignores everything that is actually responsible for higher ticket prices, from increasing production costs to artist popularity, to 24/7 online ticket scalping that reveals the public’s willingness to pay far more than primary tickets cost.  It blames Live Nation and Ticketmaster for high service charges, but ignores that Ticketmaster retains only a modest portion of those fees. In fact, primary ticketing is one of the least expensive digital distributions in the economy.”

Wall further defended Live Nation and Ticketmaster, arguing that it was “absurd” to claim that Live Nation and Ticketmaster wielded monopoly power.

“The defining feature of a monopolist is monopoly profits derived from monopoly pricing,” Wall said.

“Live Nation in no way fits the profile. Service charges on Ticketmaster are no higher than elsewhere, and frequently lower.”

Wall continued: “It is also clear that we are another casualty of this [President Joe Biden’s Administration] Administration’s decision to turn over antitrust enforcement to a populist urge that simply rejects how antitrust law works.  Some call this ‘Anti-Monopoly’, but in reality it is just anti-business.  A central tenet of these populists is that antitrust should target companies that have grown large enough that in some nebulous way they “dominate” markets—even if they attained their size through success in the marketplace, not practices that harm consumers, which is the focus of antitrust laws.”

In announcing the suit, Deputy Attorney General Lisa Monaco added: “Today’s announcement reflects the latest efforts by the Justice Department to combat corporate misconduct. Our fight against corporate wrongdoing includes an intense focus on anticompetitive conduct — which disadvantages consumers, workers, and businesses of all kinds.

“Today’s complaint alleges that Live Nation-Ticketmaster have engaged in anticompetitive conduct to cement their dominance of the live concert market and act as the gatekeeper for an entire industry. Today’s action is a step forward in making this era of live music more accessible for the fans, the artists, and the industry that supports them.”