In its lawsuit accusing Live Nation Entertainment, the concert giant that owns Ticketmaster, of being an illegal monopoly, the Justice Department relied on a series of internal communications offering a rare behind-the-scenes look at the industry.
The Justice Department argued in a lengthy complaint filed Thursday that the 2010 merger of Live Nation and Ticketmaster harmed competition, hindered innovation and led to higher ticket prices and fees for consumers. He requested that the company be dissolved.
In response, Live Nation, which is also the world’s largest concert promoter, said it was not a monopoly, and denied having the unilateral power to raise prices. Contrary to the government’s argument about its great power, Live Nation says it now faces greater competition than ever and that the Justice Department’s suit “will not reduce ticket prices or service fees “.
To detail its allegations, the government relied on revealing emails it said were written by Live Nation CEO Michael Rapino and other influential figures in the concert world.
Here are some of those accusations.
A Potential Rival’s Kanye West Concert
A 2021 episode gets to the heart of the Justice Department’s allegations that Live Nation went to extreme lengths to protect its competitive advantage.
Late that year, according to the government, Live Nation “threatened commercial retaliation” against private equity firm Silver Lake, which had invested in TEG, an Australian ticketing and promotions company involved in a show -highly anticipated benefit from Kanye West and Drake. at the LA Coliseum. Silver Lake had also invested in Oak View Group, a venue management company with close ties to Live Nation.
According to the government, Rapino complained to an Oak View Group executive that he viewed TEG as a competitor, and Oak View Group told the investor that Live Nation was “not happy.” Rapino later told Silver Lake that he was “all in” with Oak View Group, “where the big game is in the venues – why insult me with this investment in ticketing/promotions etc.”
TEG had reached an agreement to sell tickets through StubHub. According to the complaint, Live Nation sought to “frustrate” TEG by blocking these tickets, and as a result “hundreds of StubHub customers were denied entry to the event.”
Live Nation then “threatened to withdraw its support of Oak View Group”, and Irving Azoff, the powerful artist manager who was co-founder of Oak View Group, refused to allow TEG to promote shows with the one of the artists he directed. Azoff told Rapino he would demand that Silver Lake sell TEG, and Rapino responded, “I love you.” According to the complaint, Silver Lake sought to sell TEG – and offered it to Live Nation.
In a detailed answer Regarding the Justice Department’s lawsuit, Dan Wall, Live Nation’s executive vice president of corporate and regulatory affairs, said the claim that Live Nation threatened Silver Lake “reveals not only a disregard for the facts, but also a profound hypocrisy.
Rapino’s complaint, Wall said, was “fundamentally the same” as a concern by the Justice Department and the Federal Trade Commission about “private equity firms making multiple investments in the same industry due to competitive entanglements”.
In a separate statement regarding the concert at the LA Coliseum, Live Nation said: “The only thing we did was thwart TEG’s efforts to put tickets directly on the secondary market, in violation of our exclusive rights to the primary tickets. » Silver Lake did not respond to a request for comment.
A competitor who has become a “hammer”
Live Nation, according to the government, initially considered Oak View Group to be one of its “greatest competitive threats.” But soon, the companies “agreed,” the government says, to “avoid competing with each other and develop a mutually beneficial business plan to consolidate Live Nation’s dominance.”
According to the government, Oak View Group acted as an “agent” for Live Nation, even calling itself a “pimp” and “hammer” for the larger company, sometimes making threats in Live Nation’s name against venues that were considering ‘abandon Ticketmaster. for another ticket provider.
The government’s complaint cites emails from 2016 in which Rapino complained to Oak View Group executives about their plans to promote shows with an artist Live Nation works with. Oak View Group backtracks, with the company’s chief executive – who is not identified in the complaint, but goes by the name Timothy Leiweke – saying: “Our guys got a little ahead of themselves. “Everyone knows we don’t promote and only tour with Live Nation.”
Wall, the Live Nation executive, responded that Oak View Group “has never been a concert promoter, nor does it aspire to be,” and that it was simply looking to fill the occasional dark night in the city. one of its rooms. “To portray this as an agreement not to participate in concert promotion is ridiculous,” Wall wrote. A representative for Oak View Group declined to comment.
A rival ticket office at the Barclays Center
In early 2023, the New York Times reported that the Barclays Center, Brooklyn’s arena, was dropping SeatGeek, the young and aggressive ticketing company with which it had just struck a seven-year deal, and signing a new deal with Ticketmaster.
The abrupt change raised eyebrows in the industry and led to questions about whether Live Nation had denied the site access to Live Nation’s biggest tours in retaliation for Ticketmaster’s move to SeatGeek. Live Nation denied this at the time, and a Times review of concert data was inconclusive. The number of shows promoted by Live Nation at Barclays has indeed failed since SeatGeek took over, as have those of independent promoters.
The Justice Department filing omits Barclays’ name, but Wall confirmed it during a conference call with investors Thursday evening. The government cites an email allegedly sent to the venue’s general manager by “a senior executive at Live Nation” who had heard that the venue was moving to SeatGeek: ‘Whatever,’ says e -mail, “should think about a broader relationship with LN. not just who writes a bigger sponsorship check,” adding a “wink” emoji.
According to the government, Live Nation “followed through on its threats, redirecting concerts to other venues.”
In response, Live Nation said: “We categorically deny that any concerts were rerouted in retaliation for their decision to go to SeatGeek. »
Acquisition of competing companies
The government says Live Nation acquired a number of companies in an effort to eliminate competitors in the concert promotion and ticketing business.
Examples cited by the government include United Concerts in Utah, which used a regional ticketing company called SmithsTix. According to what the government says were internal Live Nation communications, the company wanted to expand into ticketing in Utah, but chose not to acquire SmithsTix because it “would require us to go to the DOJ.” Instead, Live Nation purchased United Concerts in 2017 and converted its venues to Ticketmaster; SmithsTix, he said, eventually went bankrupt.
Another example is AC Entertainment in Tennessee, which participated in the Bonnaroo festival. Live Nation took a majority stake in the company in 2016. A Live Nation executive considered the economics of the deal “not very exciting” but called it a “defensive measure” against AEG, according to the complaint. In 2018, Live Nation purchased Frank Productions, a Wisconsin promoter that used ticket offices other than Ticketmaster; Live Nation acquired the company and “moved venues to exclusive contracts with Ticketmaster.”
In response, Wall said the deal for AC Entertainment was made with a promoter who was in his 60s and wanted to retire. “Live Nation didn’t have an office in Knoxville, so for $15 million, it did the deal,” Wall wrote. “Seriously? The DOJ is disputing this?
