May 24, 2024 - News

DOJ and Tennessee sue to break up Live Nation

The Live Nation logo

Photo: Michael M. Santiago/Getty Images

The Department of Justice and a group of 30 state attorneys general announced a lawsuit Thursday against ticketing giant Live Nation on antitrust grounds.

  • Live Nation's business dealings in the Nashville area factored prominently into the lawsuit.

Why it matters: The outcome of the legal battle could upend the ticketing and live events industry for years to come, Axios' Sara Fischer reports.

  • The Biden administration has gone after big businesses, particularly in tech, for antitrust-related violations over the past three years, suing Apple in March and suing Google multiple times since 2020.

Driving the news: Live Nation illegally abused its monopoly power in live ticketing following its 2010 acquisition of Ticketmaster, the attorneys general and Justice Department said in the lawsuit, filed in the Southern District of New York.

  • They argue Live Nation leveraged Ticketmaster's exclusive contracts with concert venues to maintain a monopoly in the live entertainment industry, allowing them to "freeze innovation and bend the industry to their own benefit."
  • They say a breakup of the company is necessary to protect consumers and competitors and are seeking a jury trial.

Zoom in: Live Nation expanded its presence over the past decade in the Nashville area, where the company controls small clubs all the way up to the Bonnaroo Music and Arts Festival.

  • The DOJ's lawsuit details Live Nation's efforts to dominate the Nashville market by purchasing a controlling stake in AC Entertainment, the concert company that ran Bonnaroo. According to the suit, Live Nation pursued the acquisition of AC Entertainment even though it had doubts about the deal's economics.

The intrigue: The suit quoted a Live Nation executive saying the acquisition would keep rival "AEG out of the region."

  • The Live Nation exec said acquiring AC Entertainment would "lower competition in the Region and specifically Nashville." To be booked at Bonnaroo, artists agree to noncompete clauses that block them from performing concerts at nearby cities such as Nashville and Chattanooga.

Behind the scenes: Tennessee is one of the 30 states that joined the DOJ in the lawsuit. Tennessee Attorney General Jonathan Skrmetti explained the state's decision in a press release.

  • Tennesseans spent over $765 million on Ticketmaster tickets between 2019 and 2022, according to the Attorney General's Office.
  • "Live Nation's conduct has harmed fans through higher fees, lack of transparency, fewer consumer choices, and stifling innovation," the Attorney General's Office said in the release.

By the numbers: Live Nation "owns or controls more than 265 concert venues in North America," according to the lawsuit.

  • "Live Nation controls roughly 80% or more of major concert venues' primary ticketing for concerts and a growing share of ticket resales in the secondary market," the lawsuit claims.

The other side: "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," Live Nation said in a statement.

  • "The DOJ's lawsuit won't solve the issues fans care about relating to ticket prices, service fees, and access to in-demand shows."
  • "Calling Ticketmaster a monopoly may be a PR win for the DOJ in the short term, but it will lose in court because it ignores the basic economics of live entertainment, such as the fact that the bulk of service fees go to venues, and that competition has steadily eroded Ticketmaster's market share and profit margin," the company added.

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