{"id":828,"date":"2024-05-17T21:50:04","date_gmt":"2024-05-17T21:50:04","guid":{"rendered":"https:\/\/usatrustedlawyers.com\/blog\/u-s-department-of-justice-plans-live-nation-lawsuit-heres-why\/"},"modified":"2024-05-19T16:28:11","modified_gmt":"2024-05-19T16:28:11","slug":"u-s-department-of-justice-plans-live-nation-lawsuit-heres-why","status":"publish","type":"post","link":"https:\/\/usatrustedlawyers.com\/blog\/u-s-department-of-justice-plans-live-nation-lawsuit-heres-why\/","title":{"rendered":"U.S. Department of Justice Plans Live Nation Lawsuit: Here’s Why"},"content":{"rendered":"
\n

Officials with the Department of Justice<\/a>\u2019s Antitrust Division plan to sue Live Nation after they wrap up a two-and-a-half-year investigation into the company, according to two high-level sources with knowledge of the matter.<\/p>\n

The lawsuit will take aim at Ticketmaster\u2019s use of exclusive venue contracts for its ticketing services, the sources say. Last week, Live Nation officials met with attorneys from the Department of Justice to discuss the case, including DOJ Assistant Attorney Jonathan Kanter<\/strong>, but neither the DOJ nor Live Nation commented on the meeting\u2019s details. There\u2019s no clear timeline on when the DOJ plans to officially close its investigation or file suit, and the two sides could meet again to discuss the case. Both The Wall Street Journal<\/em> and Politico<\/em> have previously reported that the DOJ planned to sue Live Nation in published reports earlier this year.<\/p>\n

Live Nation officials are continuing to cooperate with the investigation, company president Joe Berchtold <\/strong>indicated on a May 2 earnings call. Based on the issues the DOJ has raised with Live Nation, Berchtold said he believes the lawsuit is related to \u201cspecific business practices at Live Nation\u201d and \u201cnot the legality of the Live Nation\/Ticketmaster merger.\u201d<\/p>\n

That\u2019s both good and bad for Live Nation officials. On the one hand, if the merger isn\u2019t central to the government\u2019s case, then ending the merger and splitting the company up probably isn\u2019t on the table \u2014 at least according to Berchtold. Alternatively, if the government believes that the company\u2019s use of exclusive ticketing contracts with venues is monopolistic, it could propose an even harsher penalty.<\/p>\n

That\u2019s because politicians like Senator Amy Klobuchar<\/strong> (D-Minn.), who chairs the anti-trust subcommittee in the Senate, have zeroed in on Ticketmaster\u2019s 70-80% market share of the top 100 highest-grossing theaters, arenas and stadiums in North America. Klobuchar has repeatedly said she believes Ticketmaster uses exclusive contracts to lock up market share. In contrast, Ticketmaster attorneys and industry advocates have argued before that the exclusive nature of these contracts benefits venues because it simplifies the ticket-buying process for consumers and generates important revenue for venues that they would not earn without an exclusive agreement.<\/p>\n

DOJ officials are also expected to argue that Live Nation has illegally abused its power in the concert business to drive up ticket prices over the last decade, in part through additional fees that can add as much as 30% to ticket prices.<\/p>\n

But officials from Ticketmaster, which Live Nation controls, have long argued<\/a> that artists set their ticket prices, not Ticketmaster, and that only a small percentage of the fees collected above face value go to the ticketing company, with the vast majority of those funds going to venues to help cover the costs of a concert.<\/p>\n

The government also bears the burden of proving why its proposed remedies \u2014 like forcing Live Nation to sell its stake in Ticketmaster \u2014 would benefit consumers.<\/p>\n

Simply being named in an antitrust lawsuit filed by Kanter has the potential to significantly damage Live Nation reputationally and financially. A detailed lawsuit against it could galvanize the company\u2019s critics behind a narrative that alleges the concert conglomerate acts monopolistically and abuses its power, undoing the company\u2019s efforts in recent years to improve its image and destigmatize its business model.<\/p>\n

A lawsuit will also likely have a negative impact on the company\u2019s share price and serve as a major distraction for Live Nation when it would otherwise be focused on strategic expansion following its most successful fiscal year ever, with revenue up 36% from the previous year and an impressive $1.8 billion in adjusted net income.<\/p>\n

Instead, Live Nation may face the full weight of America\u2019s top law enforcement agency, which this year has taken on companies like Apple and Google with market capitalizations that are each 100 times larger than Live Nation\u2019s. While Kanter\u2019s efforts against these companies have been applauded by powerful allies including Senator Amy Klobuchar<\/strong> (D-Minn.), who has vowed to \u201cmake antitrust sexy again,\u201d Kanter\u2019s efforts so far have been unsuccessful, with the DOJ losing the bulk of the major antitrust cases it has filed. In December 2022, a judge dismissed the DOJ\u2019s efforts to block a merger between security firms Booze Allen Hamilton and Everwatch as well as mergers between UnitedHealth Group and Change Healthcare, U.S. Sugar Corp and Imperial Sugar, Meta and Within, and Microsoft and Activision.<\/p>\n

Kanter also lost a major ruling in the DOJ\u2019s antitrust case against Google earlier this year when a judge struck down a request to bar the tech giant from offering up evidence that activities the government had deemed anti-competitive also had positive qualities that improved the product and generated positive consumer feedback.<\/p>\n

\u201cIf the government can tip the scales and prevent courts from considering pro-competitive effects, the government could win every case by default,\u201d wrote Sean Heather<\/strong>, a senior vp at the U.S. Chamber of Commerce, in a recent paper on the Google case.<\/p>\n

The Google litigation, which deals with ongoing business practices at the company as opposed to a merger, could be a litmus test for a yet-to-be-filed Live Nation suit. In the Google case, the government alleges that the company controls 90% of the online search advertising market by paying out billions of dollars each year to companies like Apple and Samsung to be the default search engine on their computers and smartphones.<\/p>\n

While Live Nation officials are confident they can prevail in the looming antitrust case, they will do so with far fewer resources than other companies hauled before the Justice Department in recent years. Live Nation\u2019s market cap currently sits at $22 billion, whereas Google and Apple\u2019s combined market cap is $6.7 trillion, making Live Nation one of the smallest companies in recent decades to be the subject of such a lawsuit.<\/p>\n

Live Nation declined to comment for this story. The Department of Justice did not respond to requests for comment.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Officials with the Department of Justice\u2019s Antitrust Division plan to sue Live Nation after they wrap up a two-and-a-half-year investigation into the company, according to two high-level sources […]<\/p>\n","protected":false},"author":1,"featured_media":829,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[462,1207,171,303,344,1206,735,272],"class_list":["post-828","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lawyers","tag-department","tag-heres","tag-justice","tag-lawsuit","tag-live","tag-nation","tag-plans","tag-u-s"],"_links":{"self":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/828","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/comments?post=828"}],"version-history":[{"count":1,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/828\/revisions"}],"predecessor-version":[{"id":842,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/828\/revisions\/842"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media\/829"}],"wp:attachment":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media?parent=828"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/categories?post=828"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/tags?post=828"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}