Ticketmaster Live Nation, the world’s largest ticket marketplace and concert promoter, is facing a major lawsuit over allegations of monopolistic and anticompetitive practices. The U.S. Department of Justice filed the lawsuit in December 2020, seeking to unwind Ticketmaster’s 2010 merger with concert promoter Live Nation and prohibit future anticompetitive conduct.
What are the key allegations against Ticketmaster Live Nation?
The DOJ lawsuit makes three core allegations against Ticketmaster Live Nation:
- Ticketmaster has abused its dominant position in primary ticketing services to exclude competition.
- Live Nation has leveraged its control of concert venues to pressure performers to use Ticketmaster.
- The 2010 merger of Ticketmaster and Live Nation has substantially lessened competition in the live event industry.
Specifically, the DOJ claims Ticketmaster controls over 80% of the primary ticketing market and has entered into long-term exclusive deals with major venues that foreclose competitors. It also argues the merger allowed Ticketmaster Live Nation to bundle ticketing, promotion, and venue services in anticompetitive ways.
What does the DOJ want as remedy?
The DOJ lawsuit aims to undo the “illegal merger” of Ticketmaster and Live Nation. It requests the following structural remedies:
- Prohibiting Ticketmaster from threatening or retaliating against venues that consider using another ticketing company.
- Mandating that Ticketmaster renew venue contracts under court supervision to prevent exclusionary tactics.
- Requiring Live Nation to sell off enough concert promotion assets to create competition with its promoter division.
- Establishing a 10-year prohibition on re-merging Ticketmaster and Live Nation assets.
In addition, the DOJ wants Ticketmaster Live Nation banned from coercive bundling of ticketing with their promotion services and misleading ticket advertisements. It also requests civil penalties and ongoing monitoring to prevent future anticompetitive acts.
What is Ticketmaster Live Nation’s response?
Ticketmaster Live Nation strongly denies the DOJ’s allegations and plans to defend against the lawsuit. Some key parts of their response include:
- They claim the ticketing market is highly competitive, with Ticketmaster holding less than 30% market share when you include primary sales by venues, sports teams etc.
- They argue the merger with Live Nation has expanded choices for fans, not harmed competition.
- They say long-term exclusive venue deals are pro-competitive and common industry practice.
- They dispute coercing artists into using Ticketmaster and making rivals worse off.
In summary, Ticketmaster Live Nation portrays the DOJ lawsuit as “completely inappropriate and unwarranted”. They claim it will hurt consumers by disrupting the live event industry.
What are the key events in the lawsuit so far?
The DOJ lawsuit against Ticketmaster Live Nation has progressed through several key stages since being filed in December 2020:
- December 2020 – DOJ files antitrust lawsuit seeking to unwind the Ticketmaster Live Nation merger.
- January 2021 – Ticketmaster Live Nation files motion to dismiss the lawsuit.
- August 2021 – Judge declines to dismiss the case and sets trial date for September 2022.
- March 2022 – DOJ adds allegations that Ticketmaster has monopolized the market for major artist concert promotion.
- June 2022 – Both sides file expert pre-trial reports summarizing their key evidence and arguments.
- September 2022 – Trial is delayed to allow time for additional pre-trial activities.
- October 2022 – New trial date of January 2023 set. Final pre-trial conferences underway.
In summary, after over 1.5 years the landmark antitrust case remains locked in pre-trial proceedings but inching closer to a jury trial.
What are the chances the DOJ lawsuit succeeds?
Antitrust experts are divided on whether the DOJ is likely to win its case and force major changes:
Arguments lawsuit will succeed | Arguments lawsuit will fail |
---|---|
|
|
However, the DOJ only needs to convince a jury on a “preponderance of evidence” standard. With the trial fast approaching, many experts say the DOJ has strong enough factual evidence of monopolistic conduct to prevail.
What are the potential impacts if DOJ wins the case?
If the DOJ lawsuit succeeds and the court orders major structural changes, the impacts on the live event industry could be far-reaching:
- Ticketmaster would likely be forced to divest all or part of its ticket resale business.
- It may have to terminate or modify long-term exclusive venue contracts.
- Live Nation could be required to divest its major promotion business.
- Competing ticketing and promotions firms may gain significantly more market access.
- Ticketmaster and Live Nation could be banned from re-merging for a substantial period.
- Ongoing court monitoring could force changes to contracting practices.
Fans would likely benefit from increased ticketing competition. However, the changes could also be very disruptive, with uncertain impacts on ticket pricing and availability.
Potential impact on ticket fees
If the DOJ lawsuit succeeds in opening up the ticketing market, the most direct potential benefit for fans is reduced fees. Some analysts suggest Ticketmaster’s dominant position has allowed it to impose fees 5-10% higher than justified.
However, others argue that Ticketmaster’s scale efficiencies keep its fees low. Unwinding the merger could raise aggregate ticketing costs across the industry. Divesting Ticketmaster’s resale business could also eliminate downward fee pressure from the resale market.
Potential impact on live music industry
The live music industry has consolidated significantly with the Ticketmaster Live Nation merger. Forcing the two giants apart could allow more independent players to compete in ticketing, promotion and venue management.
However, the paired services and cross-promotion benefits of an integrated TM and Live Nation could be lost. Some analysts argue this could make organizing live events less efficient and more risky, reducing output.
Potential impact on venues
The DOJ lawsuit alleges Ticketmaster has locked major venues into long-term exclusive deals that stop them using rival ticketing platforms. If these exclusivity clauses are removed, venues would gain more power to choose their ticketing provider.
However, some venues argue exclusive deals provide them financial security and marketing support from Ticketmaster they would lack otherwise. Greater ticketing competition could be a doubled-edged sword for venues.
Conclusion
The lawsuit against Ticketmaster Live Nation alleging anticompetitive practices threatens major changes to the live event ticketing and promotions industry. After over 1.5 years of pre-trial wrangling, the DOJ appears to have a strong case. If it prevails, Ticketmaster and Live Nation could be forced to divest key assets and end exclusionary contracting practices.
This increased competition could potentially benefit consumers through reduced fees and more choice. However, it also risks significant disruption to a consolidated industry. With the trial set for January 2023, the verdict could have historic significance for both music fans and the companies that serve them.