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‘Break it up’: DOJ sues Live Nation and Ticketmaster to reduce ticket prices

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6 months ago

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‘Break it up’: DOJ sues Live Nation and Ticketmaster to reduce ticket prices

The lawsuit is much broader than the one that allowed Live Nation to merge with Ticketmaster in 2010, Justice Department officials said.

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  • The Justice Department and 30 states sued Live Nation and Ticketmaster alleging they monopolized ticketing for concerts and venues for performers.
  • Live Nation bills itself as ‘the largest live entertainment company in the world,’ but that dominance is what federal officials allege allow it to dominate the industry.

WASHINGTON – The Justice Department, 29 states and the District of Columbia sued Live Nation Entertainment, the parent company of Ticketmaster, on Thursday alleging it monopolized live events. The lawsuit seeks to lower prices for fans and open venue doors to more musicians.

Live Nation, which generates $22 billion a year in revenue, owns or controls more than 265 concert venues in North America, including 60 of the top 100 amphitheaters, such as the Hollywood Bowl in Los Angeles, according to the department. The company bills itself as “the largest live entertainment company in the world.”

U.S. Attorney General Merrick Garland said that dominance allowed the company to exert control over the live-events industry in a way that hurt fans, performers, smaller promoters and venue operators. The company uses outdated technology that deprives fans of ticketing information, according to the federal lawsuit filed in New York.

The department refers to the company’s fees as “essentially a ‘Ticketmaster Tax’ that ultimately raise the price fans pay.”

“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,” Garland said. “It is time to break up Live Nation.”

The lawsuit doesn’t specify how the company should be broken up or how much more fans paid for tickets collectively because of the alleged monopolistic behavior.

Attorneys general from both parties joined the lawsuit, including Democrats in California and New York and Republicans in Texas and Oklahoma.

What does the lawsuit allege?

The lawsuit alleged the company’s “flywheel” strategy captures fees and revenue from concert fans and sponsorships, pours the revenue into signing artists to exclusive promotion deals and wields the cache of artists to sign venues into exclusive, long-term ticketing deals.

“Because when families want to attend a concert, the add-on fees they need to pay shouldn’t break the bank,” U.S. Deputy Attorney General Lisa Monaco said. “When an independent venue wants to host the next big show, they should have the opportunity to compete. And when a regional promoter wants to publicize an artist, they shouldn’t have to fear retaliation.” 

The fees Ticketmaster charges for concerts can be staggering. For example, a 2022 Red Hot Chili Peppers show at Bank of America Stadium in Charlotte, North Carolina, had per-ticket fees of $25.75, plus $3.49 for processing, meaning one concertgoer would pay $29.24, an additional 36% of the original $81.50 ticket cost.

Dan Wall, Live Nation’s executive vice president for corporate and regulatory affairs, said in a statement that the lawsuit blames promoters and ticketing companies for high prices when neither controls the price of tickets.

“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,” Wall said.

The lawsuit is much broader than the one that led to the Justice Department reaching a consent decree in 2010 that allowed Live Nation to merge with Ticketmaster, according to department officials. The lawsuit alleges monopolization in all aspects of the business, including promotion of events, access to venues and ticket sales.

The lawsuit accuses Live Nation of:

  • Retaliating against potential competitors.
  • Locking out competitors by signing venues into long-term contracts that block rival ticket sellers or ticketing technology. Ticketmaster’s exclusive agreements cover more than 70% of concert ticket sales at major concert venues.
  • Restricting artist access to venues by owning or controlling access to the locations.

Live Nation’s reaction

Live Nation and Ticketmaster issued a statement saying the bulk of ticket fees go to venues and competition has eroded Ticketmaster’s market share. The companies said a 1.4% annual profit reflects the “opposite of monopoly power.”

“The DOJ’s lawsuit won’t solve the issues fans care about relating to ticket prices, service fees, and access to in-demand shows,” the statement said. “We will defend against these baseless allegations, use this opportunity to shed light on the industry, and continue to push for reforms that truly protect consumers and artists.”

DOJ lawsuit latest criticism of Ticketmaster

Criticism of Ticketmaster’s ticket-selling practices and lack of competition is not new but reached a crescendo after ticket sales for Taylor Swift’s Eras tour resulted in major delays and errors in online queues to buy tickets.

“Since Ticketmaster’s Taylor Swift ticketing debacle in 2022, my AG colleagues and I have relentlessly sought justice for Americans wanting to attend concerts without having their pocketbooks pillaged by Live Nation’s monopoly,” Tennessee Attorney General Jonathan Skrmetti said in a statement.

Other music star fans and musicians, including Bruce Springsteen, Foo Fighters and Garth Brooks, have long criticized Ticketmaster’s practices. Garland, who said he could remember being transformed as a college senior seeing a young Springsteen warming up for Bonnie Raitt, said the department filed the lawsuit on behalf of fans.

“We all knew that we had just seen the future of rock and roll,” Garland said. “The Justice Department filed this lawsuit on behalf of fans, who should be able to go to concerts without a monopoly standing in their way. We have filed this lawsuit on behalf of artists, who should be able to plan their tours around their fans, and not be dictated by an unlawful monopolist.”

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